Some issues of transport-logistics business in Saint-Petersburg

Mikhail PimonenkoNorth-West Russia Logistics Development Center

Rail Baltica Growth Corridor – First Transnational Roundtable Conference

Vilnius, Lithuania, 24 November 2011

1.Recent Saint-Petersburg railway news (high lights)

2. Top Saint-Petersburg railway business companies.

3. Crisis challenges and logistic approach opportunities in business

Basic events at governance level

1. Transport Coordination council:

- April 2011 foundation

- Ministry of transport, SPb and LO Government.

2. Meeting with JSC “RZD”

- November 2011

- agenda “General Scheme of Spb Railway Node

Development”

3. Project “General Scheme…”

- customer JSC “RZD”

- cost 120 mln Rub ( RZD – 60; RF budget – 30;

SPb budget – 24; LO budget – 6)

4

First turn fields of development

Transport connections development at SPb-LO borders according to demand

Design and construction of 2-nd Ring Road

Northern direction

Eastern direction

Southern direction

SAINT-PETERSBURG AND LENINGRAD OBLAST RAIWAY INFRASTRUCTURE

Сортировочные и грузовые станции

Station “Avtovo”Station “Avtovo”

JSC “PKT”

JSC “Petrolesport”

Station “Predportovaya”Station “Predportovaya”

Station “Shushary”Station “Shushary” “Modul” Ltd.

Ring road “block-train”

“Voskhod” Ltd.

“block-train”

“Logistica Terminal” Ltd.

Station “Zanevsky post”Station “Zanevsky post”

“Logistics park “Yanino” Ltd

Usage of “block-train” technology

TRANSPORT & LOGISTICS TEAM, 360 EMPLOYEES

TAKE COMMAND OF

Railway transportation & freight forwarding

Inland hubsContainer door-to-door

Freight forwardingLogistics solutions

Inland hub for combined traffic in Saint-Petersburg

Bonded container terminalFeatures:- 6 km to the St. Petersburg Sea Port- total area — 4,9 hectares- storage capacity (at a time) — 1 500 TEU - terminal-port Shuttle block trains

Bonded warehouse class “A”Features:

- Space 4500 m²- Storage capacity 6 900 pallets- Permanent temperature control

$200 mln. inland hub projects in Russia biggest cities

Direct agreements with the railway companies of:

Russia, Ukraine, Belarus, Lithuania, Kazakhstan, Finland, Estonia, China

Freight forwarding:CIS import, export and transit by rail, road and sea

25 branch offices in Russia and abroadAgents at all Russian border crossings

FREIGHT FORWARDING, LOGISTICS

MODUL Company Ltd. 1/3

Cargo turnover: containers - 200 000 TEU per year

general - 500 000 tons per year

MODUL Company Ltd. 2/3General area -12 hect ( Container term. area – 7,2 hect )

Container sorage capacity: empty – 800 boxes, filled -1100, ref – 120

Indoor warehouse: 2500 sq. m

Local railways – 6 lines, total length – 2500m

Three entrance gates for trucks.

MODUL Company Ltd. 3/3

Equipment: Containers - rich-stackers 45 ton – 2; 30 ton – 2;

General: mobile crane – 50 ton; loaders – 32; 22; 10;7;4;2,5;1,5 t

Traditional Delivery Technology

8500 types of perfumery goods

BORDER

SUPPLIERS

CUSTOM

VAT

FEES & DUTIES

40% of price

DELIVERY

CUSTOMERS

Crisis challenges

Beginning of financial crisis in 2008 led to:• sharp drop of loan sizes in Russian banks;• double price of loan;• transfer to partly prepayment; • decrease of deferment time till 30 days;• requirement of economy drive;• growth of quality requirements

Delivery Technology after Reengineering

SUPPLIERS

12

Types of goods 2500

BORDERConsolidating warehouse Riga

CUSTOM

LOGISICS PROVIDER

CUSTOMERS

Before After

1. Warehouse inventory, days 45–60 25–35

2. Time of capital circulation 25%

3. Total warehousing costs 20%

4. Custom and other costs per goods unit 10%

5. Share of fulfilled orders, 96% 96%

6. Ratio of covered demand, group A 85% 96%

7. Sales volume (2008–2010 гг.) 60% growth

REENGINEERING RESULTS

THANK YOU FOR YOUR ATTENTION !

e-mail:

pimw@wnet.ru

Mikhail Pimonenko