Priorities of Belintertrans

Since March of this year, a new container transport company – called «Belintertrans – Transport and Logistics Centre (BTLC)» – began to operate on Belarusian Railways. BTLC emerged from the merger of the two top rail operators in the Republic of Belarus, namely, Belarusian Railways’ official forwarder Belintertrans (a republican unitary enterprise) and unitary enterprise Minskzheldortrans. Tatyana Solovyova, Head of Marketing and Logistics at Belintertrans, answers questions regarding the strategic tasks and development prospects of the new company

Tatyana Sergeyevna [Solovyova], what has dictated the need to set up a new structure created through the merger of the two top players on the Belarusian market for container transport services?
The establishment of the new company was dictated by the need to integrate Belarus into Europe’s logistics system and organize world-class railway and logistic services. The creation of a transport and logistic system that would include rail and motor transport, transport junctions, terminal complexes, and Customs posts was predetermined by the geographical position of our republic and of its main transport centres on the transport map of Europe.
Taking into account the components needed to organize a complete complex of logistic services, Belarusian Railways decided to unite the resources and operational experience of the two top players on the Belarusian market for container transport services. The activities of the logistic centre in the making, with a network of branch offices in all regional centres of the republic, will aim at ensuring maximum satisfaction of all the needs of clients connected with freight delivery; this goal will be achieved by broadening the limits of dispatch and forwarding activities, and finding new niches on the transport services market.
Thus, the main tasks of Belintertrans are to provide the full range of logistic services, handle transit freight flows, and organize workable schemes for the movement of goods in Belarus and other countries.

The new container transport operator came into being during hard times for the transport sector and for the economy as a whole. This applies to the post- Soviet states as well as to the whole of Europe. Why was it decided to establish Belintertrans at such a time?
Two international transport corridors the Second and the Ninth) pass through Belarus. Our country is located in the centre of Europe, and it can therefore serve as one of the key transit countries. Yet we have not yet made full use of this potential, and we constantly faced the possibility that we might cede transit freight traffic to Ukraine and the Baltic states. If we are to make full use of our transit potential, we must create a logistics structure that would offer world-class services in all spheres connected with the provision of transport services. That is why we set up Belintertrans and made the first steps in that direction – we have managed to start work in such a way that improvements in the quality of our services have been accompanied by a reduction in the expenditure of materials and time.

How have you benefited from the merger with Minskzheldortrans?
Previously, we provided terminal and warehousing services, and container handling services by contract with Minskzheldortrans. Today we have practically removed all unnecessary intermediary links, and all processes take place within the framework of one enterprise. As a result, the client is the biggest gainer, because he has to sign just one contract and not several; he has to pay for the whole package of services just once, and get all the necessary services from a single company.

How has the current economic crisis affected your business?
We could not remain unaffected by a fall in Belarusian exports in the first quarter of this year; exporters often dispatched their goods by container transport. The exporters are Belshina, the Kristall Plant in Minsk, Grodnoazot, and the Minsk Tractor Plant. Many enterprises have begun to send their products by road transport in order to simplify their delivery schemes and cut logistic costs. At the same time, however, the route container train Viking continues to ply between the Lithuanian port of Klaipeda and the Ukrainian city of Ilyichevsk. Under a joint protocol signed by the railway administrations of Lithuania, Belarus and Ukraine, Viking’s tariffs have been cut by 15%, bringing them down to last year’s level. This has enabled Viking to retain its competitiveness in the period of crisis.

What first-priority projects is Belintertrans carrying out?
Belintertrans’ priority line of business is the organization of work for the Minsk Customs & Logistic Centre, which is located within the city limits and works through the Kolyadichi and Stepyanka stations, where the Customs warehouse is situated.
We are looking for investors who would put money into the modernization and development of that Minsk Centre. On the base of this Centre, we aim to build a consolidation centre of European significance that would offer clients the full range of logistic services at competitive prices. Apart from that, Belintertrans owns the loading points of Smolevichi, Vileika and Koidanovo, and also the technological facilities at the stations of Minsk-Severny, Shabany, Molodechno, Borisov, and Orsha- Vostochnaya; these facilities contribute to the technology and organization of the transportation process.

What changes might Belintertrans make in the field of managerial decisions?
The general trend in this field today is enhancement of the centralization of companies. But then even before the crisis Belarus had a rigidly centralized system of management. So we are unlikely to take any extra steps here. Our present managerial structure is optimal.

How does Belintertrans intend to develop its logistic technologies?
One of its most important challenges is to attain the level of a 3PL operator. In the foreseeable future, we intend to bring up our logistic services to a level that would enable us to cross the bounds of simple transportation and engage in the provision of full-package services, namely, the organization and management of transport operations, accounting and management of reserves, preparation of export/ import documentation, warehousing, cargo handling, and bringing deliveries to the end receiver. This will help us to substantially expand our client base, and, in particular, to find a niche in such an attractive market segment as catering for the transport and logistic requirements of trading enterprises.

How is Belintertrans developing its intermodal services?
In the first place, we sign contracts with ocean and feeder lines, with overseas railways and intermodal companies, and also with logistic operators. To build up our intermodal capabilities, we are putting together our own fleet of container trucks, which we use to distribute, under the door-to-door scheme, the goods arriving at, for example, the Kolyadichi container terminal. Thus, figuratively speaking, if a client of ours wants a consignment to be sent from Minsk to Venezuela, he only has to sign a single contract with us.

Your relations with Belarusian Railways – how are they developing?
Covered wagons continue to be transferred to our books; we have received a fleet of flatcars and car carriers; we are in talks to announce and show that we are capable of using our own and leased fleets of vehicles, and provide operator and terminal services.

Given the present economic crisis, what amendments has Belintertrans made in its investment policy?
We invest mainly in the development of our logistic infrastructure and systems of computerization, in training and giving refresher courses to our employees, and also in building up our fleets of vehicles, particularly our fleet of flatcars. Already today, we have observed the first signs that we might again not have enough rolling stock to fully meet the requirements of our consignors. We want to stave off such a scenario, especially as we are having a favourable price situation.

How will you organize work to map out container routes?
We are participating in the work to lengthen the Viking train, and this will make it possible to link, by a single corridor, the space from Turkey and Central Asia to Scandinavia. The «Mongolian Vector» container train continues to ply between Berlin and Ulan Bator, and another train, called «Mongolian Vector – Zhui» (the Chinese character «zhui» signifies luck and prosperity), takes containers right to China.
The «through rate» for freight transportation on the container train cuts expenditure on transportation, and makes delivery of the goods 2.5 times faster than by sea transport. But these routes are facing a crisis at the moment. The main problem concerns the use of rolling stock, and it is due to the fact that the various railway administrations fail to come to a decision acceptable to all concerned. As soon as these reciprocal claims are resolved, the two trains will start working to fuul capacity.
A new project, known as ZUBR, will be launched in the near future to develop trade ties between the Baltic States and Belarus. A container train will run along the route Riga-Minsk-Riga, enabling Belarusian Railways to increase its freightb turnover in the service with Latvia and Estonia, and to attract from these countries additional freight. Inland container services continue to work in Belarus, although the earlier growth forecasts have yet to materialize.

What is your vision of relations with the railways of neighbouring countries, Russian Railways in particular?
We will soon open a representative office in Moscow. We also plan to open an office in Klaipeda, Lithuania. Belintertrans has direct contractual relations with Lithuanian Railways. The Kazakhstan Temir Zholy National Company is organizing close cooperation with Estonian Railways, Ukrainian Railways, Poland’s PKP Cargo and Russian Railways.
An agreement between Russia’s public company TransContainer and our company Belintertrans has been in effect since March of this year. Cooperation between the two companies aims at developing rail freight transportation and full-package services in Belarus and Russia, and also at promoting container operations between European Union countries and those of the Asia-Pacific area.
With the signing of that agreement, the sales market for our services in countries of Europe and Asia has been broadening. We now enjoy substantially greater opportunities to organize systematic marketing work and to attract freight to our foreigntrade rail routes passing via Russian and Belarusian territories.
Belintertrans already has experience of work with TransContainer. One of the largest rail transport projects passing via Belarusian territory is the Volkswagen Rus project to carry car components from the European plants of the German carmaker to the Russian assembly plant in Kaluga. The first trial transit operations via the Belarusian city of Brest took place in October-December 2007. Since January 2008, there have been regular rail transportations by the route Czech Republic/Slovakia-Brest-Kaluga. Under the Volkswagen Rus project, more than 46,000 loaded 40-foot containers were transported in both directions in 2008. Under Volkswagen’s plans, 2009 transportations should total around 60,000 fortyfoot containers to be carried in both directions. This is a stable rail haulage schedule that guarantees regular supplies of car components to the Russian assembly plant; in fact, it is becoming part of the conveyor manufacturing process. At the moment, we have agreed to transport containerized freight of the Russian/German contracting parties in the direction West-East-West, paying due regard to the capabilities of TransContainer’s sales offices in Europe to provide clients with the required transport facilities – universal and specialized containers and flatcars, and full-package intermodal transport services. It is also planned to use rolling stock belonging to Belarusian Railways or Belintertrans.
Interview by Leonid Grigoryev