Key factors underpinning our strategy
Key external factors underpinning FESCO’s 2025 strategy
FESCO’s strategy until 2025 is based on external challenges and macro trends.
Defining our target market
Eurasia is FESCO’s target growth market.
Factors that make Eurasia a potential market for the Company:
- economic growth in China, India, and Southeast Asia;
- Russia’s stronger focus on the Asian market;
- Eurasian container market growing faster than the global level;
- FESCO’s strong brand in Eurasia;
- development of transit corridors along the Asia–Europe routes;
- development of the Trans-Arctic Transport Corridor;
- development of Central Asia: Kazakhstan and Uzbekistan.
Mission, vision and values
Goal: we want to be the best container logistics provider for our customers in Eurasia.
Over the recent years, we have remained steadfast in our vision and focused on the customer and their needs.
To encourage better cross-functional working across the Company, we make a continuous effort to improve our business processes through the redesign of our production systems and adoption of lean manufacturing.
Quality service indicators are integrated into our incentive policy. Our streamlined system enables us to create digital solutions and increase the quality of our services to meet the growing market demand.
To improve its processes, the Company runs the following projects as a strategic initiative:
- Service Excellence, a project to improve customer experience;
- FESCO’s online services to submit transportation requests and have access to information on a 24/7 basis.
Assets and a reliable supplier network
Our assets provide a solid foundation to meet our customers’ logistics needs. FESCO works consistently to:
- optimise the rolling stock fleet;
- upgrade and optimise the vessel fleet;
- increase the fitting platform fleet to keep its railway container transportation market share and become less sensitive to container transportation market volatility, as well as maintain meaningful presence in that market segment;
- develop own handling capacity;
- expand its terminal network across all Russian regions.
Expanding our service offering is key to our strategy. We seek to provide integrated added-value services, which enable customers to outsource logistics functions.
These services include:
- multimodal transportation;
- customs clearance;
- warehouse operations, responsible storage and cross-docking;
- less-than-container-load (LCL) deliveries.
We promote project logistics, which enables the Company to capitalise on its extensive experience in project cargo transportation and build long-term business relations with EPC contractors and direct customers.
We offer comprehensive logistics solutions to the timber, mining, and agricultural sectors.
As we develop digital solutions, grow our assets, and create new logistics products, our people remain at the heart of our business. We strive to provide our employees with all the tools and support they need to achieve their full potential. As the COVID-19 pandemic reached its peak and the established supply chains came under pressure, with automated processes no longer able to cover market needs, we drew upon the skills of our people, who helped us respond to the challenges.
Attracting and retaining talent remains our core focus.
Key strategic lines of business
Terminal network development across our regions of operation
FESCO is building a backbone network of container terminals and logistics parks to strengthen its presence in Russia and the CIS, improve customer experience, and offer high-margin products.
The key areas of geographic expansion are Siberia, the Urals, Moscow, and north-western regions.
Development of VMTP, FESCO’s key stevedoring asset
In its development, VMTP relies on expectations that Russia will enhance its focus on the Asian market.
We project that between 2022 and 2025 there will be a stronger trend for a demand shift from European to Asian products, with ports of the Russian Far East serving as the key entry point for the latter.
In addition to container imports and transit flows, exports are also set to go up until 2025 as new production facilities are commissioned across Russia with a focus on the Asian market.
Given VMTP’s plans to retain its leadership standing in the market of Russia and the Russian Far East, the port of Vladivostok needs to add new capacity.
Under its development programme until 2025, VMTP plans to:
- remain the leader by container handling among stevedoring companies of Russia and the Russian Far East;
- maintain its 42%+ market share in the Far East;
- keep its capacity utilisation levels at 80–90%;
- engage in a set of measures to expand its capacities to 1 million TEU by 2024.
Growing our liner logistics assets
Reliability of FESCO’s services is underpinned by the Company’s assets across the supply chain. We remain committed to a strategy to support the quality of services that is based on Company-owned assets.
With robust quality of logistics solutions in key areas of business, FESCO is well-positioned to expand its geography by scaling up its expertise and competencies to new regions.
- creating a product range in countries focused on Russia;
- working through agents/representatives;
- setting up corporate offices and engaging in partnerships with local operators;
- putting in place assets (Company-owned vessels and terminals).