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Logistics: lessons from the pandemic
How 2021 helped FESCO become a flexible logistics provider
The coronavirus pandemic and container shortages caused by deferred demand and trade imbalances between China and the United States have seriously impacted the trucking market globally. To maintain their position, many companies have begun to restructure their work. In 2021, the FESCO Transport Group transformed from a rolling stock owner into a flexible logistics provider capable of providing its customers with a supply chain of any complexity and fully meeting the needs of shippers in the ever-changing market environment. FESCO's portfolio of shipping services is a prime example of this.
According to FESCO experts, in the context of the COVID-19 pandemic, the market is beginning to rebuild, and shippers are looking for any opportunity to reduce costs. Groupage services are becoming more and more popular among the clients of transport companies.
A year or a year and a half ago, it was profitable for shipping companies to take a twenty-foot container and send it half-empty to its destination. This made it possible to shorten the delivery time and had almost no effect on the price. Now the situation has changed. The container shortage has raised the cost of shipping a 20-foot freight container 10-12 times (up to 7 thousand dollars). At the same time, the waiting time for an empty container increased to 10–20 days.
In these conditions, it is among small companies that prefabricated services began to be in great demand. And this is not surprising, because everyone wants to save money. Firstly, sending the cargo in assembly is cheaper for the client than renting a separate container. At the same time, the break-even point for the client when shipped by groupage service is now 19 cubic meters. Secondly, even in conditions of a severe container shortage, the movement of groupage cargo is carried out according to a regular schedule, while waiting for dispatch on an individual basis can take from 2 weeks. Clients often use groupage services to send more than 20 cubic meters of cargo, since in this case they receive a minimum waiting time for empty containers, and the cargo itself is sent on time.
Large networks and associations of suppliers can afford to ship cargo in bulk by leasing containers and even entire container trains. For the first time, FESCO sent a container train from Vladivostok to Moscow in 2009. The service was named FESCO Moscow Shuttle (FMS). Over the 12 years of its operation, 5 thousand container trains have been dispatched and 700 thousand loaded containers have been delivered.
In 2019, FESCO sent the first full-piece container train carrying cargo from South Korea to Europe. Then 62 forty-foot containers were delivered to Vladivostok from Busan by the regular sea line FESCO. Upon arrival at the Vladivostok Commercial Sea Port, the containers were loaded onto railway platforms, which formed a train that proceeded to St. Petersburg. From there, the containers went by sea services FESCO to the ports of the Netherlands, Belgium and Germany.
Also FESCO recently launched railway services on the Trans-Siberian Railway. One of the main advantages of this route is time saving. The delivery time of cargo from Asia to Europe by rail is approximately 30 days, which is 2 weeks faster than the alternative route through the Suez Canal (40–45 days).
The advantages of rail transportation can also include the frequency of shipments and the minimum processing time for goods at the terminals. The FESCO transport group dispatches more than 70 container trains weekly from Vladivostok, Moscow, St. Petersburg, Novosibirsk, Yekaterinburg, Krasnoyarsk, Khabarovsk, Uzbekistan and China.
But FESCO is not only container shipping. The company's portfolio includes tremendous experience in project logistics. FESCO specialists are responsible for the delivery of such bulky and heavy cargo as cracker columns for a gas plant in the Yamalo-Nenets Autonomous Okrug, sea port tugs, submarines and even a floating cosmodrome.
In 2020, FESCO arranged delivery for Rooppur NPP in Bangladesh. To implement the project, FESCO specialists developed an individual transportation scheme for a reactor vessel weighing 347 tons, a steam generator weighing 334 tons, a pressure compensator weighing 191 tons and a polar crane weighing 80 tons. The equipment was loaded in the port of Novorossiysk onto a crane vessel and proceeded to the port of Mongla, from where it was loaded onto river barges for further transportation along the inland waterways of the Republic of Bangladesh. It was delivered to the construction site by modular road trains. The reactor vessel was unloaded from the barge by the only crane in the country with a lifting capacity of 600 tons, which FESCO specially transported for this operation.
In 2021, the company's specialists ensured the transportation of large-sized heavy equipment for the Yerevan CHPP: a gas turbine weighing 205 tons, a transformer weighing 182 tons, a gas turbine generator weighing 169 tons, a steam turbine generator weighing 148 tons and a condenser weighing 85 tons.
The uniqueness of the operation was that it was carried out in the context of hostilities and restrictions associated with the coronavirus pandemic.
The pandemic and crisis in the container market affected not only transport companies. Importers of goods are forced to refuse to "inflate" warehouse leftovers and drains, "freezing" money in the product until the moment of sale. Spare parts, components, electronics, gifts, etc. more and more often they are imported in quantities necessary for the market, so as not to "gather dust" in warehouses until the next season. Companies are restructuring their logistics, moving to efficient procurement and more detailed analysis of the consumer of the product. Depending on the type of cargo, terms and price preferences, shippers choose the most suitable delivery methods.
There are a variety of options on the market: multimodal prefabricated service "sea and rail", which takes 35-45 days, prefabricated service of direct railway departure from China, with a transit period of 20-25 days, prefabricated service "sea and air", with a delivery time 8-10 days, as well as direct air assembly in 5 days. FESCO not only organizes the transportation of goods, but also provides storage services and door-to-door delivery. Any shipper will find the best option for himself.
My own importer
In the face of competition, some companies are restructuring their operations even more radically. If earlier they bought goods in Moscow from large players and sent them to Sakhalin, Kamchatka, Kuriles, Magadan, now they are ready to become importers themselves, because it has become much easier to do this. FESCO can deliver cargo from anywhere in the world, and the company's specialists will help with customs clearance.
Find out more about the nuances and possibilities of delivery by phone
8 (800) 511-84-96 (free in Russia).
Make an application for the shipment of groupage and container cargo by phone or on the FESCO website