Valentin Turtia, Director of ” Baltika-Trans”, talks about logistics advantages of cargo delivery through ports. The interview revealed some meaningful matters: (1) comparison of ports and terminals in Finland and St. Petersburg, (2) customs clearance of cargoes in the ports: Kotka, Hamina, Riga, Tallinn, Klaipeda, St. Petersburg, (3) transportation of goods in tank containers (bulk chemicals, food additives), (4) transportation and clearance within customs transit, (5) recommendations for a novice importer on the delivery of goods from China.

Coherent exposition of the speech

1. Analysis of logistics routes. International trade participants traditionally use ports in Finland and Northwestern Russia. Previously, the congestion of St. Petersburg ports forced clients to use Finland and the Baltics, and now, even though the load has decreased, many do not switch back out of habit.

2. Specifics of customs clearance. The key difference between the routes is the place of customs clearance. Shipments via St. Petersburg are cleared at the Baltic Customs office, while using Finland or the Baltics allows for clearance at a land border or even at the destination point within the country.

3. Recommendations for port selection. The company recommends a flexible approach to port selection, considering all options in the Baltic region. The deciding factors for choosing a specific route are the total costs for logistics and customs, as well as the transit time.

4. Company’s core business areas. The company specializes in international container shipping, handling about 4,000 containers per month. It works with all major ocean carriers and functions as a nationwide customs broker, operating its own fleet of 60 container trucks.

5. Majority in tank containers. A separate and unique line of business is intermodal tank container transportation. The company is the first country operator to transport liquid chemical and food-grade cargo in tank containers, including under internal customs transit procedures.

6. Key advice for new importers. Before starting an import business from China, it is crucial to carefully calculate the entire supply chain: the cost and time for transportation, customs clearance, and warehousing. The customs clearance is a complex process that becomes a critical factor in route selection.

7. Route options from china, final recommendations. There are several delivery routes: maritime (via the ports of St. Petersburg, Vladivostok, Novorossiysk) and overland (via Kazakhstan or Mongolia, including by rail). Each route has different costs and timelines. To choose the optimal solution, the company offers to conduct a professional analysis of all possible options.

Future belongs to companies with their own fleet

Over the past decade, the freight forwarding market has thinned out – many small companies covering a narrow number of shipments have left. A similar trend is now being observed among mid-tier carriers. Further trends in the transport logistics segment… were discussed with Valentin Turtia, Director of Tank Containers at Baltika-Trans group of companies.

Valentin Sergeevich, what current trends in the existing market segment do you see for your company?

— Currently, the Russian logistics market has transitioned to a state of actual asset ownership and management. Previously, transport and forwarding activities were in demand and highly profitable, and clients were willing to pay simply for the ability to assemble a transportation chain from China, America, and Europe to any point in Russia. Now, this activity has become so highly competitive, low-margin, and uninteresting that logistics companies have moved into the asset market, transforming from forwarders into carriers. This has affected almost all types of transportation: trucks, tank containers, railroad cars, and platforms. In our opinion, the market will fundamentally flip within the next few years. If previously a client worked with a forwarder, who in turn hired one or another asset owner, now the forwarder themselves will become the last link, with the carrier being the one to conclude a contract with them.

How is your company building its tactical activities in the changing market segment?

— Over the last few years, we have been consciously expanding our fleet of equipment used for the international container transportation we carry out. This applies to containers, tank containers, trucks, and railroad platforms. We will continue the work of increasing the fleet in the future. At the moment, we have over 1,000 tank containers, more than 80 container truck combinations, and several dozen, mainly 40-foot, railroad platforms. Tank containers were not chosen by chance – they are the most in-demand both for domestic and international routes of the Russian market. This applies to import, export, and transportation by rail within CIS countries. Noting this trend about 10 years ago, we began using this type of container for both transportation directions after 2 years. And this was successful, meeting all expectations.

How would you characterize the further market prospects for tank containers?

— Currently, more than 15,000 tank containers are in use on the market, and the annual growth of 1,500 units will continue in the future. Therefore, in the transportation of liquid chemicals, we are in the right trend. In regular forwarding activities, there are great difficulties with this. For example, in Europe, it is now almost impossible to find. In Russia, the number of small and medium-sized companies was reduced by the 2014 crisis when the ruble exchange rate halved and import flows decreased. Mainly large forwarders remain in the market. And, in our opinion, it is tank containers, which last 25 years and pay for themselves in 5-7 years, that bring real operating profit. These are highly intellectual and highly hazardous cargoes, which not everyone takes on because it requires one’s own fleet and qualified personnel. (04/2017; RZD Partner)