Forewarned is forearmed
Sometimes factors which can influence any field of the Russian economy change rapidly. We observe the growth of geopolitical tightness between countries, the changes in domestic law, price increase of financial resources. Transport logistics is the main blood vessel of the whole ecosystem of the country. The head of the company should always keep the finger on the pulse of changes in logistic field in order to move in the right direction. The opinion of Alliance experts on the recent changes and forecasts at the market is better than any monometer for ACEX clients. Most of forwarders also listen to logistic specialists, who make thousands of projects in different business fields daily.
Well, What Does the Coming Day Hold for Us?
Let’s try to foresee the future of transportation by truck. At the beginning of 2019 the changes in domestic law came into force. The requirements for commercial transportation are tightened and the fees for the owners of trucks are getting higher. The repair of old and the building of new roads will be done with the help of budget revenue.
“There will be lack of trucks because of the increasing number of “Platon” automatic control system points and also because of introduction of automatic weight and dimensional control, on my opinion. 60% of the market are average transport companies which disregard such fees. Therefore, if the transporter pays fees established by the Russian government and avoids overload it’s possible to increase the margin because of the lack of trucks”, - comments such legislative tendency Sergey Moskovchenko, the General Director of Logistic Center MIR, ACEX member in Tomsk.
And What is Happening at the Railway?
The market of transportation by railway is worried about external factors which influence the volume of discharge and the direction of transportation, points out Oleg Degtyarev, the General Director of RusTrans, ACEX member in Moscow. “We work with large exporters of gas field, metallurgists. For example, we have organized the offload of hydrocarbon at Belarus. The order of Russian government concerning the introduction of tax maneuver in gas industry was signed at the end of 2018. The cost of transportation of hydrocarbon for Belarus increased. And, for example, Baltic is ready to obtain our liquid gas, but there is an unofficial restriction on offloading”.
But nevertheless, export possibilities of Russia are growing and logistic services are required. The distance of transportations and reorientation of cargo export in Asia-Pacific region will grow. This way, beginning from the 1st of January 2019 the agreement signed by heads of Transport Ministries of Russia and China came into force. It allows door-to-door delivery of cargo.
This direction is very promising for Russian-Chinese logistics despite a lot of questions, pointed out Miroslav Zolotarev, ACEX Alliance Board Director. “A lot of things are to be done for the agreement to start working and bringing benefits to the participants of the market, in our opinion. For example, we must pay attention to the cost of transportation by truck and the possibility of its subsidizing for Russian forwarders and/or exporters.”
Along with China, Turkey is quite promising trade partner of Russia. Trade turnover between two countries exceeded pre-crisis level and continues to grow.
Despite of political and economic problems of the past year, the commercial life of both countries improved at the beginning of 2019, - pointed out Melis Oman, the Head of the Development Department of AIRON Logistics, ACEX member in Turkey. The situation is perspective for the logistics market. But it’s hard to make any forecast before stabilization of situation. I’m sure that export-import operations will resume with new force after the elections in March.
We Have Crossed Bosphorus and Then…
Europe is waiting for the most important political event – the exit of Great Britain from European Union. It is planned for the 29th of March 2019. Edvinas Neverovskis, CEO at ACEX Lithuania, marked the following main problems for transporters at European market in 2019:
- The lines on the border between France and Great Britain.
- The lack of competitiveness of Britain customs in document preparation.
- Transport expenses increase.
- The prolongation of transportation time.
- Complicated procedure of document preparation.
- Avoiding of Great Britain direction will lead to the lack of transport in this country.
Recently “Brexit” is the main issue and ACEX Lithuania, together with other transporters, is getting ready for it. Only on this condition we will remain competitive at the market. We must be ready for any changes in order to provide stable and flexible services to our clients”, - points out Edvinas Neverovskis.
Delivery is Getting Faster
Lovers of popular Britain shop ASOS will obviously get their parcels. ACEX member Boxberry is working hard on it. In the nearest future fast and comfortable delivery of order will be of great value. The speed and variety of delivery service are growing annually. Change in the needs of recipients and growth of the quantity of market places are the main logistics “engine” for Russian e-commerce market.
The tendency of development of market places will become global in 2019, - stated Michael Konev, the head of production department of Boxberry delivery service. – Such market places invest in regional fulfillment. New distribution centers will appear almost in each federal district in the nearest future. Most of logistic companies will adapt to market demands and search partners for the development of in-house terminals in regions. Finally, the delivery of goods to the customer will become faster.
The development of new technologies in transport logistics will influence on the speed of delivery in 2019. Digitalization of supply chain will help to complete routine, physically complicated tasks. Men will concentrate on solving innovative, analytic and administrative tasks.
«There is nowhere to go without digitalization of economy – says Oleg Degtyarev about the perspective of the field of transportation by railway. – Huge companies, as well as “Russian Railway” will develop IT-platforms. Customers will have the possibility to order the wagons online and to count expenses on them.”
IT-technologies and digital logistic decisions will connect on one working space all participants of market, including logistic companies, forwarders and even government, states Miroslav Zolotarev. “Process automatization and IT companies are created and governmental-private partnership in the field of digital economy is expended. It will help to diminish human factor and to organize the “seamless” logistic process.”
Is There Any Place for Human?
But despite robotization and automatization process force-major can happen. In case of urgent and unpredictable orders only man can take the decision.
«The situation is changing constantly in case of the transportation by air: the delay in equipment supply, consequences of industry accidents can happen. Transportation by air is used when other types of delivery are not possible, - tells Azat Mulgimov, General Director of Air Charter Service, ACEX member in Moscow. That’s why in our field we need to be ready to client calls at the midnight and weekends asking to help in force-major situation. For example, last Saturday we worked out urgent request for delivery of aircraft engine for one of airlines. The engine broke and urgent replacement was required in order to continue regular passenger flights. On Sunday the flight was confirmed and on Monday evening the engine was on its place.”
So, the skills of adoption to new realities are necessary for leadership position at the transport logistic market. No progress – no profits. Opinion of field experts will help to avoid problems, not to cope with them. Forewarned is forearmed.