Foreign automobile concerns develop logistics
Last years saw a very active work of foreign automobile concerns in development of their assembly facilities in Russia and, consequently, in delivery of components. Considering that carmakers, especially Japanese ones, are very scrupulous in selection of their partners, the presence of Russian companies in the supply chains suggests that Russia’s transport market is up to the world standard today.
Just-in-time
As of today, the following concerns assemble cars at their own facilities in Russia: Ford (Vsevolozhsk, LeningradToyota (Shushary, St. Petersburg) and Volkswagen (Kaluga). In the nearest future, General Motors Nissan, Suzuki, Hyunday are to open their plants in St. Petersburg. According to the conditions laid by the Ministry of Economic Development and Trade, the companies should continue production localization, which means the use of home-made components. However, the selection of suppliers and creation of new production facilities takes much time. Besides, there are components the production of which is possible only in certain places. Thus the logistics of components supply is very significant for improvement of production efficiency. It is also important to note that carmakers base their operation on ‘just-in-time’ principle in order to decrease storage costs. So the components should not be delivered after or before the required time. region),
Container’s kit
In St. Petersburg the component’s logistics is related mainly to the Big Port of St. Petersburg, its container terminals in particular. Any disturbance of their operation effects the production similar to the situation when the access to Moby Dick terminal in Kronshtadt was blocked by the Direction on construction of flood protection facilities in St. Petersburg. The Ford plant was highly concerned as the fail in component delivery could result in production stoppage. A decision was taken there to open the way exclusively for truck loaded with Ford components.
In order to ensure smooth supply of components the concerns prefer to have a number of lines. For example, National Container Company tells about its negotiations with Toyota on delivery of car components via First Container Terminal though Toyota intends to diversify the supply as the majority of carmakers do. Not so long ago N-Trans Group (former Severstaltrans) announced its partnership with General Motors. On January 21, container terminal of Petrolesport OJSC handled the vessel, which came from Portugal with the first batch of equipment (166 TEU) for the plant being constructed in Shushary. On February 3-4, it is scheduled to handle the vessel with the second batch of the plant equipment. Petrolesport OJSC is responsible for delivery of components by sea ensuring the conditions for long-term work. Japanese carmakers are very cautious about selection of their partners. They usually prefer to cooperate with Japanese companies. As it was earlier reported, sea delivery of Toyota components will be arranged by the second largest shipping company of the world – NYK (Nippon Yusen Kabushiki Kaisha).
Chain-bound
However, it is not enough to deliver the components to the terminal. It is important to arrange the complete chain of supply on door-to-door principle. Thus the company needs a multimodal operator similar to that of General Motors delivery system. The project’s multimodal operator is Revival LLC, its forwarder in St. Petersburg is Trans-Business Broker LLC, responsible for delivery from the terminal to the construction site according to the schedule approved by the port.
In November Eurosib won the tender announced by General Motors CIS for logistics of delivery of Chevrolet Captiva components. Under the contact, Eurosib acts as a 3PL operator for General Motors being responsible for components delivery to the General Motors plant in Saint-Petersburg. Total volume of shipment will exceed 7000 TEU by the end of 2008. The delivery by sea is arranged via the First Container Terminal. Besides, Eurosib checks all shipping documents when delivering the cargo from the supplier in Korea to Saint-Petersburg by sea or air. Eurosib cooperates with a sea line in the port where it provides the customs clearance. Then, the cargo is delivered either directly to the plant of General Motors or shipped to the terminal and logistics center Eurosib-Predportovy by container train from where the further shipment is provided. Eurosib also assumes the needs of the plant in the componentry and plans the volume of deliveries. Earlier Eurosib specialized in railway delivery of components for Chinese automobiles in Russia.
Sea alternative
Meanwhile, there are alternative ways of delivery. For example, in autumn 2007, senior vice-president of Russian Railways (RZD OJSC) Boris Lapidus told about the company’s negotiations with Toyota and Nissan on cargo transportation by TransSib. The negotiations are being held by the company’s subsidiaries – TransContainer and Russkaya Troika. In October, Russkaya Troika, RZD OJSC and concern Mitsui signed a Memorandum on Cooperation in establishment of container transportation. According to Russian Railways, the potential of TransSib transportation is very high as it takes 18 days to deliver cargo from Japan to Russia by railway and 45 days to deliver it by sea. However it is too early to speak about permanent railway supply as the terms are not absolutely reliable, experts think.
Meanwhile TransContainer started delivery of components to Volkswagen plant in Kaluga. According to the company’s press center, the first container train carrying car components for German manufacturer Volkswagen was sent last week from Brest to the station Kaluga. The total cargo volume was of 116 TEU. As is known, in November 2007 JSC TransContainer and Volkswagen Rus signed the agreement on car parts transportation for VW Passat, VW Jetta, VW Tuareg and Skoda from Koshice (Slovakia) and Mlada-Boleslav (Czech) to the Volkswagen plant in Kaluga. TransContainers partner in the project is German company Schenker Automotive Railnet, an affiliate of Deutsche Bahn AG. It is planned that transportation will be carried out during three years, using own rolling stock of TransContainer.
Thus, arrangement of automobile component delivery is an important element in production of cars in Russia today. Russian companies will have an opportunity to take a good position at international market provided that they prove their efficiency.