24
RUSSIA / EASTERN EUROpE
ISSUE 3 2010
The cold war may be over for the Russian freight industry
Moscow my be grappling with unseasonal temperatures, but it’s been a long, hard winter for the Russian freight industry. However, there are small signs of a rise in the economic temperature. Long- cherished plans for expansion are being dusted down and people are daring to hope that the worst might be over.
Diversified Delamode beats the East Europe recession
John Fleming, operations manager of Delamode International Logistics, says that the company’s core business to and from Russia, the CIS and eastern and central Europe, hasn’t suffered in the recession but he has diversified the business base in order to maintain growth. It now offers a full logistics package, including UK domestic work and has also opened an office in China. The company is also developing business from China to Romania and using the latter country – where it has substantial warehousing and logistics operations – as an alternative hub for eastern and central Europe from the Far East. Delamode has a large purpose- built logistics facility at Braintree, just off the A120 in Essex which has allowed it to increase its range of value-added services.
“We’ve probably now reached the stage where about half our business is from outside East Europe and Russia, simply because it hasn’t grown as fast as our other traffic,” John Fleming explains. The business base now includes
garments on hanger (GOH) goods. Delamode is the UK and Ireland member of the Faxion network of fashion logistics operators, which dovetails nicely with some of its existing full load clothing business. John Fleming says: “The Russian
market never really went down for us, but a lot of the larger projects have been stopped.” Business levels have held up reasonably well because multinational manufacturers have made heavy investments that they are not going to walk away from, but in terms of new investment, most are now marking time waiting for the recession to end.
Ukraine has been a bit more buoyant, says Mr Fleming, mainly because it borders the EU and is seen as an attractive location for lower cost manufacturing. Delamode has also picked up
traffic from other freight operators, sometimes quite large ones, who value its expertise in Russia and eastern Europe, adds Mr Fleming. “In the past, these are companies that might have attempted to build up their own services to these regions but are now taking a more pragmatic approach.” This is especially true now that the Russian market in particularly is no longer growing at the headlong pace of a couple of years ago. Freighting to Russia and other
former Soviet countries is perhaps a little easier than in the past, but it still pays to use a specialist who knows the ropes. “Formalities are a bit more cumbersome than they
are for thee EU, which can catch companies unawares. It’s especially true of people who have only ever dealt with countries that are in the EU, like Poland, who might not realise that you still need customs clearance for places like Russia or the Ukraine.” The procedures are not especially difficult, but it is much easier do do things properly in the first place, rather than try and put right a problem after it has occurred. For instance, in Ukraine it can be important to contact the consignee and check that they are aware that they will need to pay import duty and that they can indeed do so – otherwise the consignment might sit in a warehouse racking up costly demurrage charges until the money is paid.
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