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Following the conference “The Container Flow. How to boost transit transportation and attract high-added-value freight”, Head of the Board of Delo Group Sergey Shishkarev told TASS about the situation in the container transportation market during the pandemic, the assets’ synergy within the Group and shared his opinion on the containers transportation in open-top wagons.  

The container transportation market did not face a dramatic drop in volumes due to the pandemic. What do you attribute this trend to?

The coronavirus situation has shown that the container transportation market is quite sustainable to  the restrictions. The decline in container traffic did not exceed a few percent even during the heavy restrictions period compared to the collapse in other transport sectors by tens of percent. This trend is caused by the fact that the nomenclature of cargo and consumer goods transported in containers is extensive and the containerized cargo handling is non-contact, the human factor is minimum. Plus the handling speed of the containerized cargo is competitively high. The situation has clearly shown that the container transportation is the most promising segment. So, our strategy for the development of this segment turned to be just, including in ports.

How did the pandemic affect the container assets of Delo Group?

The operating results of most of our container assets increased compared to the same period of the previous year. The figures are slightly lower than the project ones, we have set before the pandemic. I am not saying that everything is good in the market. There were many problems that we promptly resolved but none of these problems were critical.

The start of the pandemic coincided with the active phase of the finalization of the corporate procedures related to the consolidation of a 99.6% in TransContainer by Delo Group. And despite the situation, the work was executed on time. Moreover, we learned to work from home offices and I believe the efficiency of decision-making was preserved.  

After the consolidation of TransContainer the Group’s assets portfolio has expanded significantly as well as the Management Company “Delo”. What are the main tasks set for the company’s management?

The main task that I set for the Delo Group management is to reach the synergy of the Group’s assets. We already repeat like a mantra at all our meetings that "2+2 should be more than 4, much more”. How do we see this synergy? We removing the duplication of functions within the Group. For example, the container operator RUSCON, a part of the Delo Group, has completely changed its business model in several months, transferring its own fleet of platforms and the container terminals to TransContainer and concentrating almost entirely on the forwarding business. Thus, we avoid the internal competition and use our resources more efficiently.

TransContainer and our stevedore assets actively cooperate in our clients the best services - the high-quality fast “turnkey” service in the perimeter of Delo Group, regardless of whether the client is an importer, an exporter or a transit carrier through the Russian territory.

Talking about the tasks for the TransContainer management, one of the key tasks is to increase the customer focus. We must strengthen our leadership in the market. That is why we are currently implementing a range of measures to improve the quality of communications with our clients , for example the regular surveys about the service content.

Coming back to the topic of pandemic, what state subsidies do the container and the port industries receive?

In recent months, the Government and the Ministry of Transport have done a lot to support the economy that has been suffered heavily. It is already necessary to think about further  development.

In early May, the issue of subsidies for the rail container transportation from the East to the West and back was discussed at the meeting on the transport industry development with Vladimir Putin. We believe that such a measure is necessary to attract additional cargo flow during the difficult period when the global logistics market is unbalanced. This will also facilitate  the fulfillment of the strategic goal set by the President to increase the container transit fourfold by 2024 compared to 2017.

So far the draft decisions that we saw do not ensure a  significant support for this market. We hope that the final decisions will help us to increase the transit volumes.

The heated discussion unrolled recently about the proposal to return to the transportation of containers in the open-top wagons. What is your viewpoint on this initiative?

I admit, this offer surprised us. There are reasons why this practice was abandoned in 2014. What has fundamentally changed since 2014 in transportation technologies? Nothing.

We are concerned about many issues. Transportation of containers in the open-top wagons raises the safety issues for the cargo and the rolling stock. We strive to focus on best practices. Nobody in the developed European railway markets transports containers in the open-top wagons for a good reason. The high-tech solutions such as container flatcars are more environmentally friendly and non-contact. They reduce cargo handling time and accelerate its delivery to an end customer.

And the same time this solution does not help us to transform Russia into a reliable transit country. We already hear the comments that Korean, Japanese and other Asian companies do not want to carry their containers with high-tech cargo, which are equipped with all possible sensors  in the open-top wagons. We will not take these cargo flow from the ocean lines and we will not be able to carry them by rail through our territory. It would be like offering people who are accustomed to comfortable passenger trains to transfer to freight wagons with a lower ticket price.

Another important issue to consider is that the majority of the port terminals have the modern equipment with best international standards. Switching to manual and less high-speed container handling is a blow to the efficiency of their cargo flow.

Source: TASS dated 09.07.2020