The ACEX-organized conference, attended by about 60 representatives from small and medium-sized forwarding agencies, turned out to be a highly interesting and valuable platform to build trust and mutual confidence. During the gathering from 12-14 September in Moscow, different views were exchanged and new relations established in one-on-one meetings. In light of the poisoned political and economic climate between Russia and the west these direct contacts proved to be highly valuable for both sides.
At the event, speakers pointed out that a growing number of foreign companies consider Russia as a risk zone where contractors can violate contracts or fail to meet the delivery dates, as well as the price can be increased by several times within the time of one delivery. These agents think twice before deciding to forward their shipments to Russia or one of the neighboring CIS states according to international contractual standards.
The consumer climate hasn’t dampened
What prompted European and oversees agent’s coming to Moscow was mainly the perspective to strengthen existing ties or establishing new ones. This against the backdrop that the import markets in Russia and most CIS countries are still running quite strong despite the sanctions imposed by the EU, U.S., Canada and some others. “In fact, the purchasing power here is still high,” confirmed Miroslav Zolotarev, the Head of the Alliance Associated Cargo Experts (ACEX). According to him, the Russian market faces both external problems connected with international “distrust” and homemade ones. At the present moment the logistics industry in the CIS countries is in a stage of stagnation, the volume of shipping operations is falling whereas the clients’ requirements are increasing and the competition from the side of transnational corporations is becoming tougher.
This was echoed by some general sales agents that complained about numerous bureaucratic hurdles and infrastructural deficiencies particularly at many Russian airports.
Many hurdles still have to overcome
Oleg Dunaev, the Chairman of the Russian Chamber of Commerce, admitted that doing business between western companies and Russian cargo agents and brokers has become more complicated lately as result of the split between the east and west over the Crimea and Ukraine controversy.
However, despite all tensions it was made very clear that the Russian and CIS continue to offer huge opportunities for transport companies. Yet, so far only very few international forwarding agents have actively made the step to commence business there. “Why? Due to the lack of reliable quality partners there, language barriers, difficulties with data exchange and customs clearing processes and very little knowledge of the people’s mentality,” reasoned ACEX manager Zolotarev.
According to him, one of the most promising instruments for getting a foot in the door of the Russian and CIS markets are alliances of international and local forwarding agents engaged in air freight and ocean freight. Joining forces between international and local small and middle sized forwarding agents is an adequate answer to multinational competitors that set up their own branches wherever they need, Zolotarev strongly recommended.
As an example of how markets can be better penetrated by agents he mentioned his own ACEX club. “We offer interested foreign and Russian freight forwarders a platform to meet, exchange views and to build up confidence between two or more parties,” he said. He announced that his organization has taken out a Lloyd’s insurance for all member companies against any defaults. This minimizes the risk of not being paid for transport services rendered. Further, all payments between ACEX members are arranged by a neutral clearing house in Lithuania.
Stephan Haltmayer CEO of Frankfurt-based Quick Cargo Service states: “For my part I can say that participating the ACEX conference has paid off.” “A local forwarding partner and we as QCS have agreed on transporting 400 United Nations vehicles in transit via Bremen to Sierra Leone.” Another field of activities he secured for his enterprise is sending aircraft spare parts from Europe to Uzbekistan. All this can only be accomplished in close cooperation with a trustworthy local partner. “Without the ACEX meeting in Moscow I wouldn’t have acquired these businesses for my company,” he concludes. So his attendance has instantly paid off.