Collapse of stereotypes
What attracts large international producers in STS-Logistics – a transportation and forwarding company of Russia? What is the reason for proclaiming collapse of the stereotype saying that the renowned world brands prefer to co-operate with the first top ten of the largest world carriers only? What enables STS-Logistics to keep its stable position? And what are the prospects for the Russian transportation field after the expected Russia's joining WTO? All these issues are dwelled upon in an interview with Denis Zalevsky, top manager of the development, marketing, and sales department of STS Logistics.
Mr. Zalevsky, STS Logistics is currently running quite an extensive network of bureau and representation offices world-wide. Could you please tell about the formation and development of the company? What kind of problems did it face, and what business trends had to be quit?
STS Logistics was established in 1999 by top managers of ITS Japan Ltd., a Japanese carrier and forwarding company that was absolute leader of transport operations market implying all kinds of transport, operating both ways between Japan and C.I.S. The gross receipts of Japan Ltd. from carrying operations (80 m USD) made 70% of the total volume of this market sector. At present, the company has 35 regional offices the total. The agent agreements made by the company allow it to expand its geographical presence in the C.I.S. countries quite to a large scale (70 cities). Today, STS Logistics operates the largest network of offices of its own in Russia and C.I.S. The staff of the company Moscow offices includes almost 120 people, while the total number of employees in the entire network of STS Logistics has already exceeded 300.
What competitive advantages, in your opinion, promoted the growth of your company? What are you rightfully proud of to-day?
I believe that the competitive advantages of our company can be subdivided into three flows: first of all, the invariable quality strategy, including high class of service and continuous improvement of business processes. Secondly, it is the office network of our own. As I have already stated, the current number of the regional offices of the company is 35. They are located not just in Russia and C.I.S. but also abroad – for instance, in China, Japan, and U.S. Third, this is the so-called e-STS: the use of modern IT technologies, tracing the cargo status, information, automatic preparation of documents, the integration of STS informational system with the Customer's software products.
Your company operates within quite a wide range of services – from organizing legal protection of foreign trade activity participants to multi-modal haulage. Would you please state the staple kind of activity of your company? And what other kinds are you just planning to develop?
The most prospective trends of our company's development are: multi-modal carriage, trucking, and customs-clearance. We are planning to establish a fleet of motor vehicles, some special points of our own, dealing with customs clearance at railway stations – like, for instance, the existing point at Kuntsevo-2. We've entered into a direct agreement with this station. There is one more very prospective trend – export air carriage. At present, we are just investigating this market more in detail.
Mr. Zalevsky, you have touched the subject of export air transportations. Would you please say what exactly kinds of cargo are you aimed at? Will it be raw materials as the staple item of Russian export, or high-technology products, the production and export of which are so largely promoted by the President? What trends do you consider?
We believe we will carry the goods that have been subject to initial processing. As regards the region of destination, we consider it to be the whole world.
Who are your main clients: medium-size of large business, Russian or international companies? What kinds of commodities are you mainly carrying for them, and on which routes? Why have your customers selected you and not some other company? What is your peculiar advantage?
From the very beginning of activities of STS Logistics its managers have realized a few large-scale transportation projects that we are rightfully proud of. Here are some examples. Since 2003 to this point in cooperation with ZarbezhNefteGaz we establish the whole cycle of logistics services to ensure supplies of equipment and materials to Uzbekistan. This was needed for updating the existing oil and gas pipe-lines of Uzbekistan. Furthermore, we took part in the inter-state project developed by Russia and Uzbekistan on mining the Shakh-Pahty deposit. In 2003, we started working with companies KolTech International, ТNК-BP, the Ryazan NPZ. We provide cargo suppies for those companies (more than 2,5 thousand tons), needed for the plant updating. In 2003, we have been conferred the status of an official customshouse broker of Intel on the territory of the Russian Federation. We distribute the company's cargoes across the entire terrotory of Russia and C.I.S. And of course, this is not all. As a rule, our clients are major and medium-size Russian and foreign-based manufacturers and mining and production enterprises, network-type trading companies. Our clients include Intel, Mars, Avon Beauty Company, TНK-BP, Setra Lubricants (BP-Castrol), SIBUR, KTK-P, ZarubezhNefteGaz, the engineering centre RJSC EES (RAO EES) FSK, Novatek, Mobile TeleSystems, the trade network of shops Mir, Protec, Ehrmann, Komatsu, Hitachi, Toyota Tsusho, Sumitomo Corporation, Marubeni Corporation, Nippon Steel, Zeppelin, Ingersoll Rand, Atlas Copco, Atlas Terex, Demag, Caterpillar, АВВ, Grove, Sennebogen, Terex Mining, Liebherr, Ford Motor Company, Reemstma.
How do you estimate the potential of the transportation field of Russia? Can we make use of our geographical position advantageously? What obstackles hamper the development of the field in Russia? What will happen to the field if Russia joins WTO?
Everybody knows that this country has a very advantageous geographical location. It is a bridge between Europe and Asia. Ideally it would be great to develop just this trend of the country's transport sector – i.e., transit. But actually it's still beyond the reach of the Russian transportation field. Despite the fact that many years have passed, the system is still very much like that of the USSR. It has not been adapted to new market conditions, and not oriented towards catering client's needs. The ‘new’ transport sector of Russia is still in embryonic condition. So far, there is lack of major powerful players on the market. Therefore, on entering WTO, we will just receive many new foreign companies. As a consequence, there will be many acquisitions and mergers, which will deprive the Russian carriers of the opportnity to develop.
Could you please reveal the STS Logistics plans concerning its development? Will any new projects be launched, and any new horizons opened? If yes, what will they be like?
We are planning to continue the development of the regional network. For instance, we intend to open an office in Rostov-on-Don, Tyumen, Irkutsk. Certainly we would like to attract as many major clients as possible.