Michael Sroka, CEO, OCEANGATE Distribution GmbH
OCEANGATE Distribution GmbH is a part of a big network - Eurogate Container Terminal Group. Speaking about the group, it offers three different core businesses.

Michael Sroka, CEO, OCEANGATE Distribution GmbH
OCEANGATE Distribution GmbH is a part of a big network - Eurogate Container Terminal Group. Speaking about the group, it offers three different core businesses. This is, first of all, sea port container terminal operations with facilities in Germany (Hamburg and Bremerhaven), Italy (La Spezia, Livorno, Salerno, Giora Tauro, Cagliari and Ravenna), Portugal (Lisbon) and Croatia (Rijeka). Earlier this year Eurogate singed a contract with Moscow based company National Container Company (NCC), owned by First Quantum and Severstaltrans each having 50% of shares, on developing sea port container terminals in Russian ports - St.Petersburg and Ust-Luga. NCC will also develop the seaports of Novorossyisk and Vostochny. With the existing network in the ports of Germany, Italy and Portugal the company provides a gateway system for the entire European continent offering intermodal transportation between all the above mentioned ports.

Intermodality in practice

Comprehensive intermodal logistics service is the second core business of Eurogate. There is a 100% Eurogate subsidiary Eurogate Intermodal operating in Northern Europe, providing daily block train service and door-to-door services from Bremerhaven and Hamburg to other destinations in Germany and Central Europe, as well as railway and road transport connections between German ports in the North Sea area. Besides, in Italy Eurogate and its shareholder EUROKAI hold together 100% of shares in the Contship Group. Their intermodal arms are Milan based Sogemar providing for intermodal transportation and cargo services throughout Italy with container block trains connecting Contships sea port terminals and inland hubs. Another Contship affiliated company is MarCo (Maritime Container Company), which offers shuttle train service between the Mediterranean ports, destinations in Germany and other European markets. Currently Sogemar comprises about 25-26% of the Italian market. Both Eurogate Intermodal and Sogemar/MarCo are integrated in the entire Eurogate network and provide comprehensive intermodal logistics service covering Northern, Southern and Eastern Europe. In fact, the entire Eurogate network serves all the ports in Italy and Northern Europe. Eurogate-Contship owns the feeder service fleet in the Mediterranean Sea, that consists of more than 50 vessels with more than 60 port callings in the Mediterranean and the Black Sea every week. Within the framework of the co-operation between Eurogate and NCC there will be a new feeder service launched in September 2003 connecting the ports of Hamburg, Bremerhaven and St.Petersburg. The service will be operated by Swan Container Line having its general agent in Hamburg.

A cargo model arm

The third core business of Eurogate group is the so called cargo model business which is a port related service provided at all of the Eurogate's sea terminals. OCEANGATE Distribution here is a cargo model arm represented as a contract distribution company. We base our service on a network starting with the gateway system of sea container terminals and combine import related distribution in the European market with intermodal connections between ports and the main hubs in Milan and Hamburg where the OCEANGATE distribution centres are located. These distribution centres take care of cargo unloading and storage, palletising, all kinds of value added services and serve shops. OCEANGATE is the stock for the shop chains like IKEA, ip20, Wal*Mart and provides for thousands of different articles for different seasons. OCEANGATE not just a warehouse operator, it ensures global supply chain management combining global production with European distribution. We receive purchase orders from different customers, get in touch with vendors overseas, organise sea supply chain up to the European port gateway system with partner shipping lines and forwarders, choose the optimal port for bringing cargo to one of the OCEANGATE warehouses followed by distribution in Central Europe. This is what we call "the big mellow yellow" as usually reflected in our promotional literature. You need only two distribution centres - one in Hamburg and one in Milan to serve more than 55% of the European consumption market. Apart from warehouse storage and handling operations OCEANGATE offers its customers a wide range of services - customs management, assembly, inventory management, sales and marketing support to companies trying to become traders in the European market. A special service for companies coming from overseas is a back office service. We can rent out an office, and all a company would need is a salesman, the rest can be provided by OCEANGATE and its IT systems. At the end of the day, OCEANGATE is not just a storage facility or a contract distribution company, it is also the so called "forth party service provider" for its customers, that takes care of production starting from the global sourcing to finding consignees in Europe. In case of IKEA OCEANGATE takes care of everything that is activity based cargo, handling 50-60 different activities per year. Cargo comes in very quickly and has to leave for shops accurately on time. They call it «push-pull logistics». OCEANGATE does everything that is logistics related and makes cargo ready for shops. The same way, but with a focus on «pull-logistics», we work with Wal*Mart, making goods ready for the shop chain in such a way that the cargo can move via their cross-dock facilities located in the hinterland straight to the sales area. We do customs clearance, intermodal transportation, handling of every type of cargo, bonded warehouse administration, cargo storage in or outsides free port territory. In practice, this leads to combinations of different kinds of services to meet the needs of our customers the best way. Normally, to sell cargo within the European market, let us say, in Italy or Germany. In a usual situation you would need two different service providers, but with OCEANGATE you need only one. This is where the OCEANGATE IT systems play an important role allowing to manage purchase orders via interfaces, to control supply chains and sales orders and to prepare distribution. We are able to integrate our software in other locations everywhere in the world and in this way connect different parties. That gives our clients most flexibility in their sales requirements.

Integrated port and container logistics
Being a logistics network provider for Eurogate group makes OCEANGATE container-oriented, and integrated port and container logistics is our second main service. Within the European market we do 25,000 road operations, including 18,000 full loads, 7,000 part loads as well as 10,000 of container shipments annually. Every year in Hamburg alone we do 80,000 customs clearance procedures for import and about 10,000 -15,000 for export. Imagine that European transportation and distribution need to be combined with import and export flows on containerised basis. OCEANGATE becomes a unique service provider here since Eurogate is the owner of the sea port terminals, and has its own feeder and intermodal service vessels - everything that is needed to handle a container. OCEANGATE takes care of what is inside a container and tracks and traces all the information concerned.

Customer oriented

As for me, logistics is information management. Once you possess all the information - when you know what is inside a container, where the container is and when cargo is needed in the market - you can build up a perfect logistics system. As OCEANGATE we take more care of optimal cargo handling along with optimising capital commitment costs. Say, you have a container load of electronic goods of $1 million value and you can sell it 7 days in advance. What can OCEANGATE do here? Imagine that the container goes via the Suez Canal, around Europe to Hamburg or Bremerhaven with destination in Munich. It will take 21 days to transport the container from Asia to Hamburg and three more days for departure, cargo handling, customs clearance and transportation to Munich - 24 days total. However, once you can sell the container load one week earlier, it can be picked up at the sea port of Giora Tauro and transported by intermodal trains to Milan with further delivery to Munich. As a result you can save seven days for the cargo of $1 million value, and with interest ratio 8% you save $ 219 a day with total savings amounting to more than $1,500. This makes OCEANGATE not only a storage or distribution company because if that was the case we would just focus on having cargo in Milan and Hamburg. But we are an integrated port and container service provider, and that means that we have to take good notice of the requirements made by our clients. If a client wants to have a full container load delivered the quickest way we can offer one of the OCEANGATE gateways somewhere in Europe. To save time we will then choose the fastest delivery way to the Central European market - by intermodal, feeder or road transport via Italy, Spain or Germany.

Managing industrial logistics chain

OCEANGATE provides for a possibility to control the entire transportation and service chain by means of our tracking and tracing system. One can dial in the OCEANGATE tracking and tracing system by mobile phone or through the Internet in order to see the current cargo status and find out what process costs are by then. The system shows you very clearly the availability of cargo which gives opportunity for a virtual logistics chain management. Let us say, you have a warehouse in Hong Kong, a manufacturing site in the mainland China and the OCEANGATE deconsolidation centre in Hamburg. You want to know then where a specific goods item is and what volume is available. The system tells you there are 10,000 pieces at the factory in China with residual lead time to the European market 45 days, 5,000 pieces available at your consolidation centre in Hong Kong with residual lead time to the market 25 days, 5,000 pieces available in the port of Hamburg with residual lead time 3 days, and 5,000 on stock at the OCEANGATE distribution centre with residual lead time 1 day. Based on this information you as a salesman can make a delivery plan. This is where we come to industrial logistics chain management where we integrate services provided by forwarders and shipping companies, form an industrial package, apply our information management model, bring in our professionals to control and operate the system and offer all the above mentioned services in the market. This way OCEANGATE works with a number of companies - Wal*Mart, IKEA, Weber-Stephen and others. With a storage company you will just have a warehouse management system. OCEANGATE offers a lot of other different systems - truck and load forwarding and optimising, pick and pack systems, value added services, inventory management, assembly, sales and marketing support, supply and sales order system management, all kinds of customs clearance. And then you enter the world of virtual logistics chain management that offers tracking and tracing system and supply chain and transport management systems. Most of the tracking and tracing systems would just track and trace a container while our system tells you the details of a sales order behind it. Besides containers and cargoes it tracks respective documents. We copy export documentation, file it in our tracking and tracing system and a client can dial in the system, open the documents and see the details of his container load. Having the documents enables us to do the customs clearance of the cargo before the container arrives in the port of Hamburg. With ready documentation we can pick up the cargo right after the container is handled in the container yard. OCEANGATE knows secrets of the port and shipping line business, and we can form a service package to speed up the process by one or two days which most of the companies are losing.


Overseas markets

The activities of the Eurogate group are focused on the European continent. American and Asian markets are covered thanks to strong partnerships with companies based in these areas. Our partner company in Asia does supply chain management, we have several partners for air and sea freight, port business and distribution in North America and one specialised company in South America with outlets in about 70% of all the countries there. By means of our IT system with interfaces we do supply chain management for several companies bringing their cargo controlled to the port of Hamburg.


Facts ad figures

Currently the Eurogate group employs about 6,800 of people in total. It handles more than 10 million containers at its seaport container terminals, more than 1,2 million containers are shipped on Eurogate feeder service vessels in the Mediterranean sea, approximately 500,000 containers per year are transported on intermodal trains and there is about 280 000 sq. m storage base available in all of the European sea ports where Eurogate offices and facilities are located. OCEANGATE is a network provider and expert in logistics and information management - currently employs 83 persons, as well as external staff. Speaking about OCEANGATE Distribution GmbH, it is a small but very tough organisation form uniting 45 people who are the mainly work force - specialists doing customs clearance, transport and supply chain management, warehouse management, warehouse workers. In cargo handling we can work flexibly in one to three shifts since our personnel is educated as team managers. When we have to split our crew to a two shift system we employ external staff, and they become fork lift drivers and other warehouse workers while our specialists become team managers.


Thinking Russia

Within the framework of cooperation with NCC Moscow we are now working on applying our gateway system integrating intermodal focus on container logistics to the Russian market thus expanding our gateway to a tremendous size - by means of copying the Mediterranean model to the Black Sea market, the North Sea model - to the Baltic Sea market, and applying the system working in the ports of Hamburg, Bremerhaven and the Italian ports to the ports of Ust-Luga and Novorossyisk. The same type of intermodal services will operate between Russian ports which means we will be integrating the TransSiberian railway into this system. OCEANGATE together with NCC will form a common logistics company which will be at the helm of logistics there. We will use the same IT management and educate people in the same way. Then we will have the gateway system starting in Vostochny and ending up in Russian mega cities and ports, the German ports of Hamburg and Bremerhaven and the Italian Giora Tauro with feeder services and railway shuttles in between. We are building warehouses in St. Petersburg and Moscow and, at a later stage, will build them along the TransSiberian railway - wherever the multi-million consumer location is. This is the development plan for the next coming years. I think it is the biggest logistics project you can have. We are testing the new software now. Everything that you can see in our company today will cover the entire European continent from the 1st January 2004.


Cooperation, not competition

Our system is dedicated to traders, manufacturers and, especially, to shipping lines and global forwarders. Imagine that everything that we do we offer to shipping lines, and by signing a correspondent contract OCEANGATE could become Shipping-LineGate or Forwardersgate. A company could use OCEANGATE as a widely popular trademark along with their own label, and our system will work for them in the same way all over Europe. The same could refer to global forwarders. Some of the OCEANGATE partners from the US and Asia ask us to take over their brand name to provide distribution service for their clients in Europe. The speciality of OCEANGATE is to remain neutral with respect to all its market partners. I think we are unique in the sea port business - no other company has such a vast warehouse base close to sea ports and such an extensive network. And when global traders, like IKEA, Wal*Mart and others, ask us for service we serve them. We, however, do not want to compete with forwarders, this is partnership we are targeting at. In fact we already are partners and provide for more than 25,000 trucking shipments per year for them. We are working in the sphere of sea freight with forwarders and shipping lines, and offer value added services for them. Neutral integrated port and container logistics for traders, manufacturers, shipping lines and forwarders - that again makes the Eurogate and OCEANGATE services unique.