17 May 2004 03:55
RZD Declares War on Forwarders
State-owned rail monopoly Russian Railways on Friday unveiled an ambitious plan to raise Russia's share of the
global container market that includes spinning off its cargo unit and squeezing freight forwarders off the market.
Although Russian Railways Co., or RZD, accounts for 93 percent of all container shipments into, out of and across
Russia, current volumes are "humiliating," RZD first vice president Vladimir Yakunin told reporters.
Of all cargo shipped by rail last year, just 1.3 percent was via containers, compared to more than half in Europe,
Yakunin said, adding that the European figure is expected to grow to 70 percent by the end of the decade.
One way RZD plans to increase revenues is by squeezing forwarding agents off the market and offer door-to-door
delivery service itself.
"Forwarding companies are like ticks on an elephant's body," said RZD vice president Khasyan
Zyabirov.
Russia generates $5 billion in revenues for freight forwarders every year and RZD should get it all, he said.
For example, RZD gets only $1,250 of a $4,000 container shipment from South Korea to Moscow via the Trans-Siberian,
despite hauling the cargo 85 percent of the way, he said.
RZD vice president Anna Belova said turning the company's container department into a stand-alone company, which
will be called TransContainer, would help streamline operations and dramatically raise Russia's share of the global
market, which currently is less than 2 percent.
"If we leave this business within RZD, development will stall," she said.
With the market booming -- the amount of cargo containers shipped by rail jumped 35 percent in the first quarter --
TransContainer will be "a very successful company," she said.
About 45 percent of all container traffic in Russia goes by train, about 45 percent by truck and the rest by
boat.
RZD's container department handled 17.5 million tons of cargo last year and generated revenues of 14.3 billion
rubles ($493 million). It operates 44,000 large-tonnage containers, 133,000 medium-tonnage containers and just 411
40-footers. It also operates 17,000 fitting platforms.
Belova forecast a profit for the new company of 1.3 billion rubles next year, and more than 2 billion double by
2007.
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[The Moscow Times] |
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