Logistics and Freight Forwarding
The quality of the service is an important competitive strength in the market of transport and logistics services, and especially in the segment of containerised cargo transportation. Those who offer integrated and economically efficient door-to-door transport solutions have the edge. As a highly standardised and intermodal process, container transportation is a perfect match for the existing market trends and a key containerisation driver.
Pursuant to its development strategy, the Company expands the range of these services and builds up the portfolio of integrated transport and logistics solutions for clients to boost the added value of its services and lay the ground for long-term cooperation.
Our business model facilitates integrated transportation and freight forwarding services to clients on an “all-inclusive” basis using both our own assets (flatcars, containers, terminals, and trucks) and services of subcontractors (the Russian Railways, foreign railway administrations, agent companies, customs brokers, freight forwarders, ports, sea lines, etc.).
As historical experience shows, the demand for integrated transportation and freight forwarding services from clients is steadily growing. This type of service provides:- high quality (the Company’s commitment to deliver the cargo);
- simplicity (single price for the whole range of services);
- reliability (every key stage of container transportation can be covered by the Company’s own assets).
That said, integrated transportation and freight forwarding services require higher commitment and more complex execution processes compared to individual transportation services.
The amount of adjusted revenues from integrated transportation and freight forwarding services in 2018 amounted to RUB 25.5 billion, up 20.0% year-on-year. The share of adjusted revenues from these services in 2018 in the total income of the Company increased to 81.5% against 76.5% in 2017.
Assets
In 2018, the Company's Investment Policy was aimed at using the opened opportunities for business growth. That said, due to the acute shortage of new rolling stock, the Investment Programme was not fully delivered. Investments totalled RUB 8.9 billion (against RUB 6.9 billion in 2017), including RUB 7.0 billion allocated to capital expenditures (CapEx) and RUB 1.9 billion - for financial investments. CapEx was spent at upgrading the flatcar fleet and the container fleet, expanding the terminal infrastructure. In 2019, the Company plans to boost CapEx in the upgrade and expansion of its key assets up to RUB 13.3 billion.
The expansion of rolling stock and the increase in terminal assets enable the Company to offer integrated intermodal transportation services with an optimal price-quality ratio. The actual ratio of own and third-party assets is determined by economic considerations on the back of the prevailing market conditions.
