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f+h Intralogistics 3/2016

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f+h Intralogistics 3/2016

RUSSIA REMAINS an

RUSSIA REMAINS an important market Since seven years, the company BLG Logistics is active in the Russian market. Despite continuing sanctions the logistics expert remains convinced of the economic potential of the country in the field of automotive logistics. About BLG Thanks to its worldwide locations, the expert for automobile, contract and container logistics has developed into a global logistics specialist in the past 18 years. The clientele includes the leading German automakers as well as strong brands in the retail trade. Through its logistics solutions the BLG Group, headquatered in Germany, is an important interface for the success of its customers. And the company is growing. Today it provides around 16,000 jobs around the globe. The core competencies of logistics expert BLG Logistics lie in automobile, contract, and container logistics. Here, the company provides the full range of logistics services. BLG is active worldwide in 15 countries and has developed over the last 16 years from a locally operating company in North Germany to a global logistics service provider. Today, BLG provides over 16,000 jobs in Europe, North and South America, Africa, and Asia. It has also expanded its geographical reach through cooperation agreements, subsidiaries, and participations. The beginning In 2009, BLG decided to enter the Russian market. Uwe Seliger, Head of the Eastern Europe & Russia Business Area of BLG Automobile Logistics GmbH & Co. KG, explains the reasons for this push into the market: “At that time, tapping into the Russian market was not only an interesting prospect for BLG. It was also absolutely nec- GLOBAL BUSINESS f+h Distribution 3/2016

essary. That’s because in 2008 Western European markets had reached saturation point and the BRIC countries offered huge growth potential. Lots of companies were relocating their production shops to Eastern Europe, creating new growth opportunities there for logistics companies. Car registration numbers in Russia in 2008 had reached almost 3 million vehicles and rising. Back then, the country was even Europe’s biggest sales market”. In 2009, BLG sealed a cooperation with Sea Port of St Petersburg to handle freight in St Petersburg port – exactly at the right time. Three years later, BLG expanded into transport operations with a fleet that today numbers 50 trucks. With the help of European quality standards and a modern IT system, the company attracted two major anchor customers for the transport area: VW and Glovis (Hyundai Motor Group). Seliger: “This means that for VW we cover the entire transport chain from the production works in Germany via our hub port in Bremerhaven to port handling in Saint Petersburg, right up to dealers in Russia”. The crisis Then, in 2013, the first signs of a new crisis emerged – registration figures declined by 5 percent. It’s true to say that over the following years a regular storm broke over the automobile market: Political turmoil due to the Ukraine crisis prompting sanctions by the West, then the collapse of the oil price starting in mid-2014. All this resulted in a devaluation of the ruble, high inflation, and declining real income. The Central Bank reacted with a double-digit interest level that makes loans difficult for both businesses and consumers. This development has caused the consumer-driven automobile market to crash by more than 50 percent since 2013. In 2016, vehicle registrations will only reach 1.4 million. The prospects Despite the current economic situation of the country, BLG is confident that the Russian market still has vast potential and will recover again. Initial forecasts indicate that a modest rise in sales from 2017 can be expected, and by 2020 the volume of cars sold will climb back to 2 million vehicles. So, even though the current news from Russia reaching Western Europe is almost exclusively negative, we at BLG believe in the potential of this market for automobile logistics Uwe Seliger is Head of Eastern Europe & Russia Business Area, BLG Automobile So the company is sticking to the goal of building up a transport network similar to the one in Western Europe. BLG want to cover the entire chain from the production works or import port to the dealer. The size of the country alone means that rail and inland waterways are the best transport forms in Russia. The more the Eastern regions develop, the more the demand for corresponding transport services will rise. This requires investment in multi-modal terminals and handling centers. In addition, the logistics service provider checks the import options via the Black Sea ports using the Mediterranean hub in Gioia Tauro. Additionally, car parts logistics is another attractive field. Seliger definitely believes in the Russian market: “So, even though the current news from Russia reaching Western Europe is almost exclusively negative, we at BLG believe in the potential of this vast market for automobile logistics.” Photographs: BLG www.blg-logistics.com f+h Distribution 3/2016