Control of cargo transportation over such a large territory as Russia is hard. Especially for western logistics companies. They need not only to study the country’s infrastructure and all legal procedures, but also to understand the peculiarities of communication with clients and partners. Arkadius Grabietz, Managing Director of AKG Logistics, talks about what strategy is best to implement in this country.
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[DETAIL_TEXT] => Companies are moving to Russia
– Mr Grabietz, could you please briefly tell us about your company?
– Our company is an expert with over five years experience in the field of logistics management and transportation to and from Russia, concentrating on the sea freight business by full container, groupage traffic, project management and cross trades. Since 2009, we offer a container depot service along the Rhine between Basle and Cologne. Our headquarters are located in Dormagen, Germany. I am founder and Managing Director. In 2013, we opened new branch in St Petersburg, Russia.
– Why did you choose Russia for your business and when did you come here?
– I have 20 years experience in the Russian market, and for the last five years I have worked under the roof of AKG Logistics here. We have always seen Russia as a new growing market and have been correct. Even though it was hit hard by the crisis in 2009, it has sustained its growth. The Russian Ministry of Economic Affairs predicts growth of 2.4 percent for 2013. Germany is the second most important trading partner behind only China. Many of our customers are located in Germany and bilateral trade is growing by 20 percent this year in comparison to 2012, with a volume of €50 billion.
Many western companies are moving to Russia, so new individual logistics processes, and Russian experts are needed on the route to and from Russia. Furthermore, the Russian Federation also is perfect for the use of open source. Open Source Software is on the rise in Russia and, for operating systems, server applications and desktop applications more and more open source projects are being put into use. We would like to maintain consistent control over the flow of goods along the supply chain for our global customer base through open source solutions. However, in the area of logistics open source applications are still rare. And this is despite the fact that in this area open source software solutions have immense potential. When we offer our customers such solutions, they benefit from speed, flexibility and affordable software of high quality in their logistics processes.
– What can you say about the present situation in the Russian logistics market?
– The most important export commodity remains oil at almost 55%. The main imports are machinery, chemicals, food, electronics and electrical engineering. As I said the Russian market has enormous growth potential. The requirements concerning transport management, and customs clearance are complex.
Lack of knowledge of the Russian certification system, the impact of World Trade Organisation membership (WTO) on Russia and the alliance of Russia, Kazakhstan and Belarus into a single economic union can lead to problems at border crossings and customs clearance. To avoid this, you need an experienced logistics provider who understands the current customs processes, evaluates them correctly and is professionally prepared. Last year, Russia joined the WTO, thus opening up many new markets. This has a positive effect on some of the customs: Especially German companies from the automotive and capital goods industry are, with the WTO accession, able to enjoy reductions in average import tariffs from ten percent to 7.8 percent as well as from simplified import regulations.
– What is the most important thing in your opinion to run a logistics department here in Russia? What strategy have you implemented to grow your business?
– Besides excellent knowledge of the complex infrastructure, bureaucracy, and customs clearance processes, good partnerships and knowledge of the culture are essential. We celebrate the relationship with our partners, customers, and friends over there and I myself travel to Russia on a regular basis. Language abilities are very important. Furthermore, our own branch in St Petersburg is a daily meeting point for my partners and friends, directly located at the sea port where most of our business runs through from customers we have in the whole world.
– What can you tell about the level of education of Russian employees?
– Most of the businesses in Russia are people-related, so if you want to extend your branch you have to get professional staff. It is quite easy to get good people in Russia who have a good education, but these are often people who are fresh from university without having any experience. However, we are giving these youngsters a chance to show their power and ambitions.
We educate them in three areas: customs, the English language, and Deep sea logistics. We always let our people develop in order to have the best staff.
Central and Eastern Areas are still problems
– What difficulties do you see in working here?
– With strong knowledge of the Russian customs and foreign trade laws and continuous compliance with the latest regulations, German companies can significantly reduce costs – whether in the transport of bulk goods such as wood, steel and sheet metal or in consumer products such as household goods, textiles and more. Furthermore, in the logistics planning stage a thorough knowledge of the infrastructure of Russia’s advantages is needed. The well-developed western part of the country does not pose any major challenges, but still the central and eastern part of Russia do, because it is barely accessible by transport and traffic routes. Russia is on its way to becoming an important hub between Europe and Asia, and for that the government needs a lot of money for traffic development.
– What can you say about the railway system in Russia?
– The railway network is 87,000 kilometers, together with the construction, extension and modernisation of railway stations still to be extended, of course parallel to the roads. This costs about €10 billion. Because of the heavy use of the railway from St Petersburg to Moscow, the transport of goods suffers on this route. The situation is exacerbated by the use of the bullet train “Sapsan”, which runs six times a day between the cities. So that freight capacities for transportation are available by 2018 a new high-speed railway will be built with high-tech high-speed trains – they can travel at 400 kilometers per hour. The Russian railway system is an environmentally friendly alternative, many customers of ours from Europe and China make greater use of sustainable multimodal transport.
– Do you face problems of trains being delayed for example?
– Actually, delay is not the problem, sometimes we are perceiving a lack of information flow, e. g. to specify exact time points from when the rail wagon will continue to move and, when it will arrive at the final destination. We know that when this happens, something is not in line with the documentation and/or customs processes. This is why, we use “e-solutions”, a bespoke software tool, which delivers exact times and gives excellent control over all process.
– Does your company conform to the green logistics policy while working in Russia?
– An important policy in our company is to become as green as possible all the time. We move most the cargo by road onto sea freight containers and rail wagons in order to keep the CO2 emissions as low as possible. European/western companies extensively focus on that. If we have to move the cargo by road we are looking for EURO 5 trucks at least.
– Does the present situation differ from what you expected to see in Russia? Are you satisfied with your work here?
– It is what we had expected. We had forecast further growth and we knew that it was a people-related business in Russia. Both were, have been and will always be the case. The “Russian soul” is not a relic of the romantic 19th century: community, friendship, and a sense of family cohesion are still alive today. Unfortunately, this is ignored by non-Russian business partners frequently. From the German perspective, the Slavic way of business relies on facts and figures. Whether top-heavy German or Russian soul - in the business world a promising mixture, where trading partners go to each other with respect and openness. For us it is clear that if we stay in close contact to our Russian friends and business partners – our customers do win with us.
Interviewed by Christina Alexandrova
[~DETAIL_TEXT] => Companies are moving to Russia
– Mr Grabietz, could you please briefly tell us about your company?
– Our company is an expert with over five years experience in the field of logistics management and transportation to and from Russia, concentrating on the sea freight business by full container, groupage traffic, project management and cross trades. Since 2009, we offer a container depot service along the Rhine between Basle and Cologne. Our headquarters are located in Dormagen, Germany. I am founder and Managing Director. In 2013, we opened new branch in St Petersburg, Russia.
– Why did you choose Russia for your business and when did you come here?
– I have 20 years experience in the Russian market, and for the last five years I have worked under the roof of AKG Logistics here. We have always seen Russia as a new growing market and have been correct. Even though it was hit hard by the crisis in 2009, it has sustained its growth. The Russian Ministry of Economic Affairs predicts growth of 2.4 percent for 2013. Germany is the second most important trading partner behind only China. Many of our customers are located in Germany and bilateral trade is growing by 20 percent this year in comparison to 2012, with a volume of €50 billion.
Many western companies are moving to Russia, so new individual logistics processes, and Russian experts are needed on the route to and from Russia. Furthermore, the Russian Federation also is perfect for the use of open source. Open Source Software is on the rise in Russia and, for operating systems, server applications and desktop applications more and more open source projects are being put into use. We would like to maintain consistent control over the flow of goods along the supply chain for our global customer base through open source solutions. However, in the area of logistics open source applications are still rare. And this is despite the fact that in this area open source software solutions have immense potential. When we offer our customers such solutions, they benefit from speed, flexibility and affordable software of high quality in their logistics processes.
– What can you say about the present situation in the Russian logistics market?
– The most important export commodity remains oil at almost 55%. The main imports are machinery, chemicals, food, electronics and electrical engineering. As I said the Russian market has enormous growth potential. The requirements concerning transport management, and customs clearance are complex.
Lack of knowledge of the Russian certification system, the impact of World Trade Organisation membership (WTO) on Russia and the alliance of Russia, Kazakhstan and Belarus into a single economic union can lead to problems at border crossings and customs clearance. To avoid this, you need an experienced logistics provider who understands the current customs processes, evaluates them correctly and is professionally prepared. Last year, Russia joined the WTO, thus opening up many new markets. This has a positive effect on some of the customs: Especially German companies from the automotive and capital goods industry are, with the WTO accession, able to enjoy reductions in average import tariffs from ten percent to 7.8 percent as well as from simplified import regulations.
– What is the most important thing in your opinion to run a logistics department here in Russia? What strategy have you implemented to grow your business?
– Besides excellent knowledge of the complex infrastructure, bureaucracy, and customs clearance processes, good partnerships and knowledge of the culture are essential. We celebrate the relationship with our partners, customers, and friends over there and I myself travel to Russia on a regular basis. Language abilities are very important. Furthermore, our own branch in St Petersburg is a daily meeting point for my partners and friends, directly located at the sea port where most of our business runs through from customers we have in the whole world.
– What can you tell about the level of education of Russian employees?
– Most of the businesses in Russia are people-related, so if you want to extend your branch you have to get professional staff. It is quite easy to get good people in Russia who have a good education, but these are often people who are fresh from university without having any experience. However, we are giving these youngsters a chance to show their power and ambitions.
We educate them in three areas: customs, the English language, and Deep sea logistics. We always let our people develop in order to have the best staff.
Central and Eastern Areas are still problems
– What difficulties do you see in working here?
– With strong knowledge of the Russian customs and foreign trade laws and continuous compliance with the latest regulations, German companies can significantly reduce costs – whether in the transport of bulk goods such as wood, steel and sheet metal or in consumer products such as household goods, textiles and more. Furthermore, in the logistics planning stage a thorough knowledge of the infrastructure of Russia’s advantages is needed. The well-developed western part of the country does not pose any major challenges, but still the central and eastern part of Russia do, because it is barely accessible by transport and traffic routes. Russia is on its way to becoming an important hub between Europe and Asia, and for that the government needs a lot of money for traffic development.
– What can you say about the railway system in Russia?
– The railway network is 87,000 kilometers, together with the construction, extension and modernisation of railway stations still to be extended, of course parallel to the roads. This costs about €10 billion. Because of the heavy use of the railway from St Petersburg to Moscow, the transport of goods suffers on this route. The situation is exacerbated by the use of the bullet train “Sapsan”, which runs six times a day between the cities. So that freight capacities for transportation are available by 2018 a new high-speed railway will be built with high-tech high-speed trains – they can travel at 400 kilometers per hour. The Russian railway system is an environmentally friendly alternative, many customers of ours from Europe and China make greater use of sustainable multimodal transport.
– Do you face problems of trains being delayed for example?
– Actually, delay is not the problem, sometimes we are perceiving a lack of information flow, e. g. to specify exact time points from when the rail wagon will continue to move and, when it will arrive at the final destination. We know that when this happens, something is not in line with the documentation and/or customs processes. This is why, we use “e-solutions”, a bespoke software tool, which delivers exact times and gives excellent control over all process.
– Does your company conform to the green logistics policy while working in Russia?
– An important policy in our company is to become as green as possible all the time. We move most the cargo by road onto sea freight containers and rail wagons in order to keep the CO2 emissions as low as possible. European/western companies extensively focus on that. If we have to move the cargo by road we are looking for EURO 5 trucks at least.
– Does the present situation differ from what you expected to see in Russia? Are you satisfied with your work here?
– It is what we had expected. We had forecast further growth and we knew that it was a people-related business in Russia. Both were, have been and will always be the case. The “Russian soul” is not a relic of the romantic 19th century: community, friendship, and a sense of family cohesion are still alive today. Unfortunately, this is ignored by non-Russian business partners frequently. From the German perspective, the Slavic way of business relies on facts and figures. Whether top-heavy German or Russian soul - in the business world a promising mixture, where trading partners go to each other with respect and openness. For us it is clear that if we stay in close contact to our Russian friends and business partners – our customers do win with us.
Interviewed by Christina Alexandrova
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[DETAIL_TEXT] => Companies are moving to Russia
– Mr Grabietz, could you please briefly tell us about your company?
– Our company is an expert with over five years experience in the field of logistics management and transportation to and from Russia, concentrating on the sea freight business by full container, groupage traffic, project management and cross trades. Since 2009, we offer a container depot service along the Rhine between Basle and Cologne. Our headquarters are located in Dormagen, Germany. I am founder and Managing Director. In 2013, we opened new branch in St Petersburg, Russia.
– Why did you choose Russia for your business and when did you come here?
– I have 20 years experience in the Russian market, and for the last five years I have worked under the roof of AKG Logistics here. We have always seen Russia as a new growing market and have been correct. Even though it was hit hard by the crisis in 2009, it has sustained its growth. The Russian Ministry of Economic Affairs predicts growth of 2.4 percent for 2013. Germany is the second most important trading partner behind only China. Many of our customers are located in Germany and bilateral trade is growing by 20 percent this year in comparison to 2012, with a volume of €50 billion.
Many western companies are moving to Russia, so new individual logistics processes, and Russian experts are needed on the route to and from Russia. Furthermore, the Russian Federation also is perfect for the use of open source. Open Source Software is on the rise in Russia and, for operating systems, server applications and desktop applications more and more open source projects are being put into use. We would like to maintain consistent control over the flow of goods along the supply chain for our global customer base through open source solutions. However, in the area of logistics open source applications are still rare. And this is despite the fact that in this area open source software solutions have immense potential. When we offer our customers such solutions, they benefit from speed, flexibility and affordable software of high quality in their logistics processes.
– What can you say about the present situation in the Russian logistics market?
– The most important export commodity remains oil at almost 55%. The main imports are machinery, chemicals, food, electronics and electrical engineering. As I said the Russian market has enormous growth potential. The requirements concerning transport management, and customs clearance are complex.
Lack of knowledge of the Russian certification system, the impact of World Trade Organisation membership (WTO) on Russia and the alliance of Russia, Kazakhstan and Belarus into a single economic union can lead to problems at border crossings and customs clearance. To avoid this, you need an experienced logistics provider who understands the current customs processes, evaluates them correctly and is professionally prepared. Last year, Russia joined the WTO, thus opening up many new markets. This has a positive effect on some of the customs: Especially German companies from the automotive and capital goods industry are, with the WTO accession, able to enjoy reductions in average import tariffs from ten percent to 7.8 percent as well as from simplified import regulations.
– What is the most important thing in your opinion to run a logistics department here in Russia? What strategy have you implemented to grow your business?
– Besides excellent knowledge of the complex infrastructure, bureaucracy, and customs clearance processes, good partnerships and knowledge of the culture are essential. We celebrate the relationship with our partners, customers, and friends over there and I myself travel to Russia on a regular basis. Language abilities are very important. Furthermore, our own branch in St Petersburg is a daily meeting point for my partners and friends, directly located at the sea port where most of our business runs through from customers we have in the whole world.
– What can you tell about the level of education of Russian employees?
– Most of the businesses in Russia are people-related, so if you want to extend your branch you have to get professional staff. It is quite easy to get good people in Russia who have a good education, but these are often people who are fresh from university without having any experience. However, we are giving these youngsters a chance to show their power and ambitions.
We educate them in three areas: customs, the English language, and Deep sea logistics. We always let our people develop in order to have the best staff.
Central and Eastern Areas are still problems
– What difficulties do you see in working here?
– With strong knowledge of the Russian customs and foreign trade laws and continuous compliance with the latest regulations, German companies can significantly reduce costs – whether in the transport of bulk goods such as wood, steel and sheet metal or in consumer products such as household goods, textiles and more. Furthermore, in the logistics planning stage a thorough knowledge of the infrastructure of Russia’s advantages is needed. The well-developed western part of the country does not pose any major challenges, but still the central and eastern part of Russia do, because it is barely accessible by transport and traffic routes. Russia is on its way to becoming an important hub between Europe and Asia, and for that the government needs a lot of money for traffic development.
– What can you say about the railway system in Russia?
– The railway network is 87,000 kilometers, together with the construction, extension and modernisation of railway stations still to be extended, of course parallel to the roads. This costs about €10 billion. Because of the heavy use of the railway from St Petersburg to Moscow, the transport of goods suffers on this route. The situation is exacerbated by the use of the bullet train “Sapsan”, which runs six times a day between the cities. So that freight capacities for transportation are available by 2018 a new high-speed railway will be built with high-tech high-speed trains – they can travel at 400 kilometers per hour. The Russian railway system is an environmentally friendly alternative, many customers of ours from Europe and China make greater use of sustainable multimodal transport.
– Do you face problems of trains being delayed for example?
– Actually, delay is not the problem, sometimes we are perceiving a lack of information flow, e. g. to specify exact time points from when the rail wagon will continue to move and, when it will arrive at the final destination. We know that when this happens, something is not in line with the documentation and/or customs processes. This is why, we use “e-solutions”, a bespoke software tool, which delivers exact times and gives excellent control over all process.
– Does your company conform to the green logistics policy while working in Russia?
– An important policy in our company is to become as green as possible all the time. We move most the cargo by road onto sea freight containers and rail wagons in order to keep the CO2 emissions as low as possible. European/western companies extensively focus on that. If we have to move the cargo by road we are looking for EURO 5 trucks at least.
– Does the present situation differ from what you expected to see in Russia? Are you satisfied with your work here?
– It is what we had expected. We had forecast further growth and we knew that it was a people-related business in Russia. Both were, have been and will always be the case. The “Russian soul” is not a relic of the romantic 19th century: community, friendship, and a sense of family cohesion are still alive today. Unfortunately, this is ignored by non-Russian business partners frequently. From the German perspective, the Slavic way of business relies on facts and figures. Whether top-heavy German or Russian soul - in the business world a promising mixture, where trading partners go to each other with respect and openness. For us it is clear that if we stay in close contact to our Russian friends and business partners – our customers do win with us.
Interviewed by Christina Alexandrova
[~DETAIL_TEXT] => Companies are moving to Russia
– Mr Grabietz, could you please briefly tell us about your company?
– Our company is an expert with over five years experience in the field of logistics management and transportation to and from Russia, concentrating on the sea freight business by full container, groupage traffic, project management and cross trades. Since 2009, we offer a container depot service along the Rhine between Basle and Cologne. Our headquarters are located in Dormagen, Germany. I am founder and Managing Director. In 2013, we opened new branch in St Petersburg, Russia.
– Why did you choose Russia for your business and when did you come here?
– I have 20 years experience in the Russian market, and for the last five years I have worked under the roof of AKG Logistics here. We have always seen Russia as a new growing market and have been correct. Even though it was hit hard by the crisis in 2009, it has sustained its growth. The Russian Ministry of Economic Affairs predicts growth of 2.4 percent for 2013. Germany is the second most important trading partner behind only China. Many of our customers are located in Germany and bilateral trade is growing by 20 percent this year in comparison to 2012, with a volume of €50 billion.
Many western companies are moving to Russia, so new individual logistics processes, and Russian experts are needed on the route to and from Russia. Furthermore, the Russian Federation also is perfect for the use of open source. Open Source Software is on the rise in Russia and, for operating systems, server applications and desktop applications more and more open source projects are being put into use. We would like to maintain consistent control over the flow of goods along the supply chain for our global customer base through open source solutions. However, in the area of logistics open source applications are still rare. And this is despite the fact that in this area open source software solutions have immense potential. When we offer our customers such solutions, they benefit from speed, flexibility and affordable software of high quality in their logistics processes.
– What can you say about the present situation in the Russian logistics market?
– The most important export commodity remains oil at almost 55%. The main imports are machinery, chemicals, food, electronics and electrical engineering. As I said the Russian market has enormous growth potential. The requirements concerning transport management, and customs clearance are complex.
Lack of knowledge of the Russian certification system, the impact of World Trade Organisation membership (WTO) on Russia and the alliance of Russia, Kazakhstan and Belarus into a single economic union can lead to problems at border crossings and customs clearance. To avoid this, you need an experienced logistics provider who understands the current customs processes, evaluates them correctly and is professionally prepared. Last year, Russia joined the WTO, thus opening up many new markets. This has a positive effect on some of the customs: Especially German companies from the automotive and capital goods industry are, with the WTO accession, able to enjoy reductions in average import tariffs from ten percent to 7.8 percent as well as from simplified import regulations.
– What is the most important thing in your opinion to run a logistics department here in Russia? What strategy have you implemented to grow your business?
– Besides excellent knowledge of the complex infrastructure, bureaucracy, and customs clearance processes, good partnerships and knowledge of the culture are essential. We celebrate the relationship with our partners, customers, and friends over there and I myself travel to Russia on a regular basis. Language abilities are very important. Furthermore, our own branch in St Petersburg is a daily meeting point for my partners and friends, directly located at the sea port where most of our business runs through from customers we have in the whole world.
– What can you tell about the level of education of Russian employees?
– Most of the businesses in Russia are people-related, so if you want to extend your branch you have to get professional staff. It is quite easy to get good people in Russia who have a good education, but these are often people who are fresh from university without having any experience. However, we are giving these youngsters a chance to show their power and ambitions.
We educate them in three areas: customs, the English language, and Deep sea logistics. We always let our people develop in order to have the best staff.
Central and Eastern Areas are still problems
– What difficulties do you see in working here?
– With strong knowledge of the Russian customs and foreign trade laws and continuous compliance with the latest regulations, German companies can significantly reduce costs – whether in the transport of bulk goods such as wood, steel and sheet metal or in consumer products such as household goods, textiles and more. Furthermore, in the logistics planning stage a thorough knowledge of the infrastructure of Russia’s advantages is needed. The well-developed western part of the country does not pose any major challenges, but still the central and eastern part of Russia do, because it is barely accessible by transport and traffic routes. Russia is on its way to becoming an important hub between Europe and Asia, and for that the government needs a lot of money for traffic development.
– What can you say about the railway system in Russia?
– The railway network is 87,000 kilometers, together with the construction, extension and modernisation of railway stations still to be extended, of course parallel to the roads. This costs about €10 billion. Because of the heavy use of the railway from St Petersburg to Moscow, the transport of goods suffers on this route. The situation is exacerbated by the use of the bullet train “Sapsan”, which runs six times a day between the cities. So that freight capacities for transportation are available by 2018 a new high-speed railway will be built with high-tech high-speed trains – they can travel at 400 kilometers per hour. The Russian railway system is an environmentally friendly alternative, many customers of ours from Europe and China make greater use of sustainable multimodal transport.
– Do you face problems of trains being delayed for example?
– Actually, delay is not the problem, sometimes we are perceiving a lack of information flow, e. g. to specify exact time points from when the rail wagon will continue to move and, when it will arrive at the final destination. We know that when this happens, something is not in line with the documentation and/or customs processes. This is why, we use “e-solutions”, a bespoke software tool, which delivers exact times and gives excellent control over all process.
– Does your company conform to the green logistics policy while working in Russia?
– An important policy in our company is to become as green as possible all the time. We move most the cargo by road onto sea freight containers and rail wagons in order to keep the CO2 emissions as low as possible. European/western companies extensively focus on that. If we have to move the cargo by road we are looking for EURO 5 trucks at least.
– Does the present situation differ from what you expected to see in Russia? Are you satisfied with your work here?
– It is what we had expected. We had forecast further growth and we knew that it was a people-related business in Russia. Both were, have been and will always be the case. The “Russian soul” is not a relic of the romantic 19th century: community, friendship, and a sense of family cohesion are still alive today. Unfortunately, this is ignored by non-Russian business partners frequently. From the German perspective, the Slavic way of business relies on facts and figures. Whether top-heavy German or Russian soul - in the business world a promising mixture, where trading partners go to each other with respect and openness. For us it is clear that if we stay in close contact to our Russian friends and business partners – our customers do win with us.
Interviewed by Christina Alexandrova
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