Logistics in Russia: new trends

Kirill Vlasov

Chairman of the Board STS Logistics

8th European 3PL Summit

25 November 2010

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Russia is not only …

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But also …

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Future growth scenarios

Russian logistics market most likely to return to growth in sync with GDP

If RUR shows weakness, the market may not reach 2008 levels in USD terms in the next 3 years

Optimistic case

(Council of National Strategy)

Note: conversions at appropriate annual avg. rates for hist. points. FC with USD/RUR = 32,20112 (YTD 08/11/2009)

Source: As indicated, STS/RLS estimates

Pessimistic case

(MERT)

Base case

(IMF)

Commodity prices stabilize and continue

growing

Government stimulus packages help

the economy return to stable growth

Banks making credit available, favorable

fiscal and monetary policy make

investments affordable

Commodity prices remain volatile

but at acceptable current levels

Economy loses only little momentum after

expiry of governmental stimuli

Lacking efficiency of Russian

manufacturers makes them slow to

benefit from recovery of world economy

Slow recovery of world economy due to

unemployment, diminished consumer

spend, continuously limited credit

availability, protectionism

Stagnating commodity prices

Lacking efficiency/competitiveness

of Russian manufacturers

2008 2009FC 2010FC 2011FC 2012FC

RUR bn USD bn

3 520

2 990 3 020 3 080

3 180

93 94 96 99

Market, USD bn Market, RUR bn GDP, RUR bn

2008 2009FC 2010FC 2011FC 2012FC

RUR bn USD bn

3 840

3 520

3 260 3 420

3 620

142

101 106 113 119

3 520

2008 2009FC 2010FC 2011FC 2012FC

3 100 3 130

3 220 3 340

142

96 97 100 104

RUR bn USD bn

CAGR 08-12

USD = - 8%

CAGR 08-12

USD = - 4%

CAGR 08-12

USD = - 9%

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Customs services

What is new in customs

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Customs unit: Russia, Belorussia,

Kazakhstan (July 01);

Remote electronic declaration

system (2010);

Move customs clearance offices

(posts) to the border:

Clearance of ser and air goods in

the port / airport of arrival

(November 1, 2010);

Decision to close 70% of all

customs posts in Moscow region

(December 2, 2010: from 57 to

17);

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Customs: STS LOGISTICS response

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Today:

24 hours

Tomorrow:

4 - 6 hours

Kashirsky customs post: electronic declaration preparation

Send electronic declaration to Smolensk

Preparation of set of documents, customs clearance.

Kashirsky customs post: electronic declaration preparation. Electronic declaration (ED-2)

Customs clearance

Electronic declaration in Smolensk

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Work on the border – electronic declaration (ED-2)

Customs: STS LOGISTICS challenge for 2011

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Moscow:

Remote electronic

declaration

St. Petersbourg

Smolensk

Arkhangelsk

Volgograd

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Empty warehouses

FMCG: less volumes... Our respond: Service level.

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EMPTY MHS

FREE TRANSOPORT

QUALITY IN WHS

LTL & FTL

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Quality standard

Service level

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TRACE membership and certificate

confirms meeting high requirements of

business standards concerning “clean

deals”, level of corporate culture and

correspondence of business ethics to

international standards

ISO 9001 – quaranteed service level

certified by international audit

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Move volumes from FTL and RC to LTL (LCL) direct

FMCG: less volumes

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FTL

WHS

LTL direct

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Supply chain geographical trend

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Increase presence in China and Japan, Europe, USA

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STS LOGISTICS geography

Country City Russia Arkhangelsk

Moscow

St. Petersburg

Vladivostok

Volgograd

Ekaterinburg

Kazan„

Nakhodka

Samara

Novorossijsk

Novosibirsk

Port Vostochny

Khabarovsk

Krasnodar

Sochi

Krasnojarerks

Rostov-on-Don

Chelyabinsk

Naberezhnye Chelny

Irrkutsk

Perm

„PortVanino

Japan Tokio

Ukrain Kiev, Odessa, Uzhgorod

Tourkmenistan Ashgabad

Uzbekistan Tashkent

China Gonkong, Shankhai, Guanchzhou, Urumch

Holland Breda

USA Seattle

Kazakhstan Almaty, Atyrau, Aktau, Ust-Kamenogorsk, Aktobe

Azerbajdzhan Baku

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China

Supply chain geographical trend

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Oversized project for state organization

Project logistics growing

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May 13 STS LOGISTICS finished shipment of spare parts for transformator‟s equipment to 3 power stations: Atkarsk,

Podporozhje, Lebedjan‟. Total weight was 78 tons.

Equipment supply in frames of the state program of Energetical system of Russia

reconstruction

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Exhibition

Event logistics

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EXPO 2010, Shanghai

Exclusive contract with VVC

Delivery of Russian stand (building

of 6000 sq.m.) to Shanghai. Total

volume: 77 containers,

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Event

Event logistics

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Celebration of 150 years of Vladivostok city

June 2010, delivery of light, sound and water equipment to Vladivostok.

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Event

Event logistics

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Supply chain for development in Russkjy island for ATES summit

Logistics support of development in Russkij Irland, Vladivostok

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Customer-fit solutions

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Oil & Gas, Power generation Automotive

Event logistics FMCG & Retail

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Domestic FTL GPS tracking will be included into e-service

E-service

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GPS tracking for domestic

FTL transportation

On-line tracking of

customer’s cargo

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EDI communication will be included into e-service

E-service

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EDI

customer’s

ERP

WMS

Contact information

We are open for international cooperation

Our clients focus on their business We take care of logistics

Kirill Vlasov

STS Logistics

Chairman of the Board

+7 (495) 775 02 02

+7 (495) 933 00 33

+7 (985) 760 2209 (mob.)

stsmow@stslogistics.net

kvlasov@rls.ru

www.stslogistics.net

www.rls.ru

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