Maritime container transportation
FESCO provides regular international and domestic maritime transportation services, with its geography of maritime container transportation spanning over 100 ports globally.
In 2021, the market environment and investments in fleet expansion allowed FESCO to launch new routes, attract additional customers, and carry out the instructions of the Russian government on shipments to remote northern areas.
- On international routes, FESCO:
- launched a new service, FESCO China Express-3, from Vostochny to China (Ningbo, Qingdao, Shanghai ports) via Busan;
- increased fleet capacity at JTSL and FKXP-1 lines as a result of fleet replacement and changing the vessel call schedule.
- On domestic routes, FESCO:
- delivered construction materials under the federal programme of developing the city of Magadan and Sakhalin airport;
- provided fleet to prevent failure of shipments to remote northern areas despite critical shortage of capacity at the maritime transportation market.
Despite generally negative market environment, including logistics chain imbalances and increasing cargo delivery times, FESCO was quickly and efficiently building integrated operating processes covering all assets of the Company.
The measures taken made it possible to maintain the transportation volumes at the level of 2020.
|INDICATOR||2018||2019||2020||2021||YOY CHANGE, %|
|International routes, k TEU||313||250||293||284||(3)|
|Domestic routes, k TEU||79||78||80||81||1|
FESCO provides domestic and international (export, import, and transit) intermodal container services.
In 2021, FESCO continued to develop its key services.
- As part of FЕSCO Moscow Shuttle rail service development, a new station, Bely Rast, was added to the list of origins and destinations. Shipments using a new route are made twice a week. FESCO’s customers can ship and receive cargo at four stations in Moscow – Silikatnaya, Khovrino, Selyatino, and Bely Rast.
- A new regular container train to Chita, FESCO Chita Shuttle, was launched. The travel time to Chita-1 station is seven days. The new service is used to deliver a variety of cargo types – from consumer goods to equipment. Customers can also enjoy door-to-door shipment.
- As part of cooperation development, the Company carried intermodal transportation of automotive parts for Haval Motor Manufacturing Rus LLC (a subsidiary of Great Wall Motors, a Chinese carmaker).
- Volumes of transportation from Novosibirsk to Khabarovsk increased by 25%. FESCO’s share in transportation to Khabarovsk expanded from 31% to 41%. Direct export shipments from Novosibirsk to ports of Russia’s Far East doubled as a result of attracting new customers.
- The Company transported 2.5 thousand TEU of grain from Novosibirsk, up 25% YoY.
- For the first time, the Company won the export tender of Yugra Timber Holding for the transportation of 186 twenty-foot containers. In 2021, FESCO also agreed with RUSAL on a two-fold increase in transportation to Vietnam.
- Domestic shipments of KNAUF products from Tyumen commenced.
The implemented measures and continued improvement of logistics solutions for customers enabled the Group to attract over 100 new customers and increase the volumes by 18% YoY.
Port and terminal operations
FESCO provides stevedoring, surveyor, and freight forwarding services, including loading and discharging of vessels, railcars, and trucks, using its own terminal network, which comprises:
- VMTP, the largest universal port in the Russian Far East. As one of the stevedoring market leaders and a multi-purpose port operator, VMTP handles a broad variety of cargo types, including containerised, LCL, bulk, and general cargoes, cars and heavy-duty vehicles;
- combined FEMSTA port terminal focusing on handling general cargoes, construction materials, timber, containers, vehicles for export/import shipments, as well as domestic transportation;
- inland container terminals in Khabarovsk, Novosibirsk, and Tomsk, which are the key links in the FESCO intermodal transportation chain, enabling the Company to successfully manage cargo flows and optimise costs;
- Gaydamak Port acquired by FESCO in 2021. Acquisition of the terminal was the first step of FESCO’s project of creating special port infrastructure that is unique for the Primorye Territory to ship grain cargoes from Russia to the Asia-Pacific region.
|INDICATOR||2018||2019||2020||2021||YOY CHANGE, % 2021/2020|
|Total handling, kt||10,425||11,518||11,436||13,318||16|
|Container handling, k TEU||551||625||672||757||13|
|General cargoes handling, kt||4,907||5,130||4,614||5,195||13|
|Vehicle handling, units||60,359||77,023||71,248||81,748||15|
|Oil product handling, kt||376||396||358||389||9|
The container handling volume increased by 13% YoY and reached a record 757 thousand TEU. In 2021, VMTP achieved the best turnover result in Russia. Handling of import cargoes showed the biggest growth of 19% and handling of export cargoes increased by 5%. These segments saw higher volumes of both loaded and empty containers. Containers shipped domestically demonstrated 14% growth vs 2020.
General and bulk cargoes
In 2021, volumes of bulk and general cargo handling increased to 5.2 million tonnes, up 13% YoY. In this category, bulk cargo handling demonstrated a considerable growth of 38%, while metal segment saw a 3% reduction.
Handling of vehicles and machinery increased by 15% to 82 thousand units vs 71 thousand units in 2020 as a result of using vessels from other lines on an occasional basis and under favourable terms, additional vessel calls with new Chery cars, redirecting cargoes from alternative ports of discharge, volume increase due to government contracts, refocusing from rail to maritime transportation.
In 2021, FESCO ports and terminals handled a total of 1,128 vessels vs 1,790 vessels in 2020. Average daily fleet handling grew to 35 thousand tonnes vs 31 thousand tonnes in 2020. The Company also handled 222 thousand units of rolling stock (+5%) vs 211 thousand units in 2020. Daily railcar handling reached 608 units vs 575 units in 2020.
|INDICATOR||2018||2019||2020||2021||YOY CHANGE, % 2021/2020|
|Vessel handling (unloading/loading)||units||2,551||2,618||2,377||1,670||(30)|
|Average daily fleet handling||kt||28.56||31.56||31.25||35.42||13|
|Rolling stock handling||'000 units||179.2||200.5||210.5||222.0||5|
|Average daily railcar handling||units||491||549||575||608||6|
|CONTAINER HANDLING||2018||2019||2020||2021||YOY CHANGE, % 2021/2020|
In 2021, Novosibirsk terminal considerably increased handling compared to 2020. The volume of large-capacity container handling increased by 12% to 101 thousand TEU vs 90 thousand TEU in 2020. The main drivers of the handling growth were:
- increased container handling within the key existing traffic routes (domestic rail shipments from Moscow to Novosibirsk, import to Novosibirsk via the Far East of Russia);
- commenced handling of tank containers with non-hazardous cargoes;
- considerable growth of container handling from Novosibirsk to extra-service destinations;
- receipt/dispatching of containers via the terminal and their integration into container trains;
- development of freight forwarding of third-party incoming and outgoing containers.
Khabarovsk terminal implemented the following measures in 2021:
- Grain Terminal project of receipt, storage, packaging, and dispatching of grain in box cars to the Voronezh Region;
- dispatching of 527 TEU (large-capacity containers with soya beans) for export;
- increased volume of terminal operations and cargo handling (vehicle detachment, transhipment of sandwich panels, metal goods of various types, equipment, panels, various cargoes in big bags, bags, boxes).
FESCO dominates in refrigerated transportation of perishable goods requiring special temperature conditions. In 2021, a special focus was made on expanding the transportation geography based on the investment programme aimed at container fleet renewal and implementation of modern technologies ensuring preservation of the transported cargo.
Thanks to its policy and implemented measures, the Company not only developed fish transportation from the Russian Far East to Europe and China but also ramped up the total transportation volume by 14% YoY. The total transportation in refrigerated containers exceeded 11 thousand TEU.
FESCO implements a range of logistics solutions for its fleet aimed at project and special shipments. In 2021, the operable vessel days totalled 6,236, down 4% YoY.
In 2021, FESCO continued cooperating with the National Centre for Polar and Ocean Research under the Ministry of Earth Science of India. Upon successful completion of the third Antarctic expedition, a new agreement until 2026 was made. The Company uses its unique ice-class ship Vasiliy Golovnin to provide logistics services to the customer.
Due to the fleet expansion, including multi-purpose vessels, FESCO expanded its project activities in connection with the Northern Sea Route and transportation to the port of Pevek. FESCO Paris and FESCO Olga vessels successfully delivered cargo via an alternative logistics route and shipped equipment for construction of the Baimsky Mine and Processing Plant.
FESCO continued developing 3PL as an inherent part of its logistics business, offering the following services:
- transportation management;
- accounting and inventory management;
- preparation of import, export, and freight documentation;
- warehousing and cargo handling;
- delivery to end customers;
- maintenance of special equipment;
- assembly of loaders and excavators;
- customs clearance services;
- customs brokerage services;
- customs transit services;
- delivery by air.
In 2021, the Company launched a new Ro-Ro car transportation route and transported 3,847 Chery cars. As a 3PL provider, FESCO issued 30,361 customs and transit declarations last year.
FESCO offers turnkey project transportation of bulky and heavyweight cargoes: from receipt at the manufacturing plant to installation at the destination point. Transportation is fully compliant with the regulatory requirements for transit of cargo along the route, including border crossings.
FESCO’s business priorities include expanding the portfolio of contracts signed with large customers and increasing the share of the market for transportation of heavyweight and oversize cargoes. In 2021, FESCO transported over 18 thousand freight tonnes of project cargoes, including:
- delivery of eight tanks of a system for the passive inundation of radiation zone, 83 tonnes each, for the construction of the Akkuyu Nuclear Power Plant in Turkey;
- maritime delivery of equipment, 5.6 thousand tonnes in total, from Busan to Sakhalin for the subsea production complex of the Kirinskoye gas condensate field;
- rail transportation of equipment, 2.5 thousand tonnes in total, for Uzbekistan GTL’s synthetic liquid fuel project.
FESCO provides a full range of oil product services: from fuel purchase and its handling at the Company’s petroleum tank farm to transfer to the tanks of transport vessels at the ports of the Primorye Territory (in particular, Vladivostok, Nakhodka, and Vostochny). As a fuel agent, FESCO arranges the supply of oil products to its fleet at foreign ports and renders centralised oil product logistics support to its own companies across Russia. Oil products are purchased from Russian producers and delivered to the destination as well as from regional suppliers and distribution companies and delivered to vessels or land facilities.
In 2021, the Company rendered bunkering services primarily to its own companies. The growth of oil product handling was stunted by rail capacity as well as regional petroleum tank farms owned by the key market players (Rosneft, NNK). In 2021, bunkering declined to 63 thousand tonnes, down 6% YoY.