Continent Group’s CEO Alexander Ganov: "The market of customs services in the country is quite dynamic"

In a recent interview with PortNews Alexander Ganov, Chief Executive Officer of Continent Group told about the development of Russian market of customs services, its features, advance reporting scheme, electronic Advance Cargo Declaration and about the group’s development programs.

- Alexander, what do you think about the introduction of mandatory advance notice and cargo declaration, what are the pros and cons of this procedure?

- The development of advance notification of customs authorities is a significant advantage in accelerating the process of customs clearance with the current traffic increase. We have a significant reduction in customs clearance of transit cargo at the border: a customs officer does not need to spend a lot of time filling out an electronic copy of shipping documents, a car passes clearance procedure at the border out of turn. Another advantage is the ease of operation – one may file documents with advance notice from any computer connected to the Internet, it does not require an electronic signature and connection to the ED system.

- Does your company use its own applications in the field of accounting, tracking the movement of cargo? What are the benefits of these programs?

- Actually, each company develops its own application, depending on specifics, nuances, traditions, on the company's needs at different periods of its development, and we are not an exception. A lot of time and effort was spent trying to develop such an application so it took into account all the interests, all possible phases in cargo movement in order to be able to track and retrieve the information on time, accurately and promptly.

Of course, the adopted business processes in the company, the responsibility of the persons appointed to complete the program, are decisive in making the program actually functional, convenient for perception both the company’s staff and customers. For example, we’ve implemented in our program the possibility to inform our customers via e-mail about every change in date for all phases of the cargo movement: from the planned to the actual, confirmed schedule, from the moment we accept the cargo until unloading of the cargo at the customer’s warehouse. Therefore, as well the company’s management as our customers get complete online information.

- What is your opinion about the electronic declaration system? How effective is it?

- Originally, the electronic cargo declaration was meant as a definite procedure to facilitate customs clearance. But there have been quite a lot of difficulties during the introduction associated with imperfect software solutions when they could not formalize in due form a large number of documents, as well as the fact that some customs posts unreasonably required in addition to electronic declarations all the same paper documents. As a result, we had to do excessive work. By the way, this is still common, in some cases, even now.

The advance declaration development allows customs clearance at the post, located in the internal customs office while a vehicle is at the border temporary storage warehouse. The scheme is convenient, but it should taken into account those possible technical difficulties and failures in the data exchange via electronic communication channels.

Besides, there might be a risk of additional measures of customs control in the form of inspection, and very often it means the customs broker has to come to the place of examination to give an explanation for the cargo in the vehicle. So, the electronic advance declaration has its positive and negative sides, but the positive one as compared with traditional paperwork routine is much greater.

Among the main ‘cons’, I would point out our poorly developed telecommunications network. It still causes delays in sending packets of information between the cargo owner and the customs post. Another downside is high labor costs of prior operations in the preparation of a customs declaration for the conversion of documents into electronic form.

As to the ‘pros’ – the paperless system of declaration and clearance, high rate, full transparency, the ability to carry out customs control in the automatic mode, the e-filing of declaration to any customs office remotely  from you desktop, priority processing of electronic declarations.
Thus, if we consider the electronic declaration as the facilitation of customs clearance procedures, as it was conceived, and how it has already been working in many places, it is certainly a step forward and implementing this method of declaration should be appraised as a positive one.

- This year, your company celebrates its 10th anniversary. How did you start? Tell us, how was your business growing?

- A small company that sets out on a journey in the market of customs brokerage services, has its ‘pros’ and ‘cons’. The disadvantages include the fact that it is still unknown on the market and it has not yet established itself on either side. Therefore, for many, especially the major participants of foreign economic activity, the novice is not an object of attention as a possible contractor for the simple reason that they can not get enough information on the services quality the new company provides.

The ‘pros’ is, that the company just beginning its business, has the unique customer focus, individual approach to each client. A small number of employees and a small number of customers make this company’s employees to treat potential customers absolutely in a different way, give them more attention, establish personal interaction with them, which is, undoubtedly, a ‘pros’ for them.

Our company is no exception. Of course, we also started with this. As the customer base was expanding, the number of our employees was growing and the range of services was increasing, our main objective became the preservation of the individual-approach, customer-focused policy, so that our existing customers would continue to feel the same attention from the staff of our company, so that the business processes, which in the process of growing complexity of the company’s structure, would have been established so that the quality of our services would never decline, so that the staff could keep our customer well informed at the highest possible level.

Starting with a single department, just 5 employees, who were engaged in both managing customers, increasing the customer base and developing / adoption of new directions of our company, we were growing step by step. After some time the company began to provide logistics services, then certification services, legal services, and was licensed as customs broker, - all this was performed by a lot of people, and the ‘backbone’ of our team, who has worked since our origination. As CEO, I believe it is a great advantage that the hand-picked team, which helped the company to achieve all that we presently have, was preserved and that for ten years now these people have been working for us.

The market of customs services in the country is quite dynamic. We are faced quite often with new challenges related to changes in legislation, and that the country's leadership, the Federal Customs Service (FCS) is trying to introduce new concepts that fundamentally shake up the well-established market structure by the time. It is hard to survive on this market for those companies that are not able to respond fast enough to such changes. As for our company, we try to adapt to all kinds of market changes, seeing them as a new stage in our development. The desire to provide the highest quality services to our customers has prevailed throughout the ten-year history.

- How these ten years have changed the industry? Is it easier or harder to work now?

- During these 10 years, the industry has changed dramatically and more than once. There were closing of the Moscow customs posts, an attempt to implement the concept of transfer of customs clearance at the border, tighter control of customs value, and much more. I can not say, has it become easier or harder to work, because, our company has been changing at all events together with the changes in the market. In addition, we were constantly growing, the number of employees and the range of services were increasing and the business processes as well. We conducted monitoring, we changed the structure of the company to improve the quality of service, receiving reports, the rate of reporting. Actually, I can say that we had some difficulties related to customs clearance 10 years ago and we still have them presently. The only thing we can note that unfortunately, due to the crisis outbreak in 2008 and which has not finished as yet, there was a serious tightening by the regulatory authorities, in the first place the customs authorities, in terms of customs clearance. But, nevertheless, we are optimistic about the future and the hypothetical or real difficulties and threats do not frighten us.

- In what regions do you operate, what are the services provided? What is the current stuff of the company?

- Today, the group of companies "Continent" is represented by its branch offices in several regions. First of all, the St. Petersburg headquarter. In this region, our employees work with the St. Petersburg Customs, and we also have a unit that works directly with the Baltic Customs. There are also branches based in Moscow, Murmansk, Novorossiysk, Nizhny Novgorod, Kaliningrad, Rostov-on-Don, Belgorod and Kazan.

The range of services, provided by our branches includes customs clearance of all types of cargo of different customs regimes . Then, of course, logistics services both foreign and domestic. Transportation service by all types of transport: road, sea, rail, air.

We also offer delivery of consolidated shipments, which can be consolidated in warehouses in the Baltic States (Lithuania) and Finland (Kotka, Helsinki).

Legal service, which includes the preparation of international contracts, recommendations for the contracts drafting, the optimal conditions for our clients.

Certification services, permits, which are constantly required both during customs clearance and for the trade of goods in our country. Our branches located in port areas, provide freight forwarding services at the ports. Therefore, we can arrange any services related to foreign trade activities.  

Currently, the group of companies Continent employs about 150 people. For us, this is not the limit, I think that in the near future, our stuff will be only increasing.

- What are the company’s development plans for the next five years?

- The main global objective of our company for the next five years is to reach the level of 3PL service provider. It's well known that in Western countries with well-established tradition of providing such services, 3PL operators are the major participants of customs and logistics services market. Actually, such service is not currently represented in Russia, compared with the European Union and the United States. There have been several attempts made to provide this service by some companies, but they have not had much success.

Since Russia has joined the World Trade Organization (WTO) foreign companies will become interested in development of 3PL-service operators in the territory of our country in the best traditions, which exist in the EU and the U.S. Based on the fact that the service 3PL in our country is very popular, especially for large traders, we are trying to look into the future. And the future definitely belongs to those participants in the customs and logistics business that can provide such a service at the best quality across our country.

3PL procedure includes not only the elaboration of the logistic component and the customs clearance of the cargo entering the territory of our country, but also the work directly with suppliers: the formation of portfolio of orders, warehouse logistics, handling the returns. It is very hard work and the business processes in our country has not yet been implemented. We'll have to start from scratch or use the experience of other Western-style companies that have developed this kind of business processes. Besides, we think of our further expansion in other regions of our great country through opening our new branches. To date we have not yet fully covered by the European part of the country, but Siberia and the Far East are of our particular interest, where we plan to open new offices. We are also interested in Chinese direction, which will begin to be developed with the opening of our representative office in China. The huge trade with this country implies interesting prospects for further development.

And we will continue to monitor the situation on the ongoing operations and as needed to improve the quality of our services, expanding its range.