Integrators beat the Russians to the post

According to a survey by Research International, DHL now holds 51% of the Russian domestic express market, followed by TNT on 19% UPS with 10’% and FedEx with 7%. DHL Worldwide and TNT Russia both announced last month that their revenues grew in excess of 30% last year, while UPS recorded “double-digit” growth.
TNT’s increase of 40% was the highest rate of growth among all 200 countries it operates in, according to Harro van Graafeiland, the company’s general manager.
He attributes the growth to a rapidly recovering economy and increased demand from Russian companies for reliable domestic delivery services.
Tikhon Evdokimov, DHL’s commercial manager for Russia and the CIS, believes volumes are much higher than they were pre-crisis, and although growth is expected to slow this year — in line with a reduction in GDP growth from 6% to 4% — the expected increase will still be higher than in any other European country.
“The increased purchasing power of Russian consumers has led to an increase in traffic flows, and to western companies expanding beyond Moscow to sell
their goods,” he says. “This, in turn, has led to a massive boost in domestic traffic levels, which are up by more than
50% and now equal our international business in tonnage terms.”
As a result, DHL is undertaking a major expansion of its domestic network, as well as moving into logistics services within Russia, such as inventory management, warehousing and distribution.
‘We intend to build on our network of 22 stations, each of which has between five and 10 franchised agents. This gives us direct coverage in more than 600 cities throughout Russia,” Evdokimov says.
“Our track-and-trace facilities are as efficient as anywhere else in world, but unlike most other countries, we have a very strong domestic air express operation in Russia, where road services are not a viable, option,” he says.
DHL now makes use of more than 120 flights a day out of Moscow and claims to be the biggest customer of a number of airlines, including Aeroflot, Pulkovo and regional carrier Sibir.
Evdokimov admits that much of DHL’s growth is due to the lack of cheaper alternatives, such as a reliable postal service. “There is not a lot of choice for customers,” he says, adding that a move into the express market is “not on the agenda” of the Russian post office.
UPS expects to experience years of double-digit growth, according to Kay-Olaf Muehle, operations manager for central and eastern Europe. “While domestic volumes started to recover strongly in August last year, and have continued to do so, international volumes have
been hit as a result of the terrorist activities in September,”
he says.
‘We are very satisfied with the Russian operations and our expectations are being met. It is on a par with other EU-access candidate countries.”
UPS operates international services from its Cologne hub into Moscow’s Domodedovo airport, via Leipzig. Letters, documents and low-value non-dutiable cargo are ready for delivery in Moscow by noon the next day, but dutiable consignments can easily take five days to clear customs.
The demands of the express operators are slowly but surely encouraging customs officials to adapt their procedures, according to Muehle, although they still have a long way to go before
they match their EU counterparts. “Customs systems are manual, laborious processes, and also
they are understaffed so they can’t cope with the growth in traffic,” he says. “Otherwise, it works fairly well.”
Muehle points out that Domodedovo is very ambitious and keen to boost its traffic at the expense of Sheremetyevo. The airport is already home to more domestic and CIS services
than its congested Moscow nval.
In addition to using the AN12 freighters of its Russian partner Atran, UPS makes use of the airport’s domestic operators to serve cities throughout Russia and the CIS.
Anglo-Russian freight forwarder Armadillo was
formed in Moscow in 1991 and has met and over