Digitalisation

The development of digital services and information systems is key to our business development. In 2020, FESCO approved a digital strategy, which focuses on:

• creating and developing online services;
• enhancing transparency throughout the entire customer service cycle.

FESCO strives to set a new standard of excellence in the intermodal transportation market by offering fully digitalised transportation services.

We give high priority to automating and optimising business processes, workflow and accounting, which helps us to reduce operating costs, offer the best value for money and improve the quality of our services.

In view of new global challenges and the need to implement remote work arrangements, FESCO focused on the automation and digitalisation of business processes that allow employees to perform their functions remotely without compromising the quality of services.

FESCO prioritises innovative projects and joint projects with its partners. The Company is currently implementing joint projects with Russian Railways as well as some of its customers.

FESCO constantly monitors legislative initiatives and trends in transportation digitalisation and electronic interaction with government agencies. We also work towards transitioning to a fully electronic workflow, build integration with the federal tax and customs services, and participate in pilot blockchain projects.

Business digitalisation projects

Customer’s personal account

MY.FESCO customer's personal account is a self-service portal for our customers.

The personal account was piloted in 2017 and back then only supported requests for intermodal imports from South-East Asia to Vladivostok and Moscow. Today, the service can be used to request any of the key transportation services provided by our Liner and Logistics Division.

Requests submitted through MY.FESCO personal account:

In MY.FESCO personal account, customers can:

• submit and repeat requests for container transportation;
• conclude contracts;
• track the shipping and customs status;
• provide feedback on service quality;
• download scans of accounting and transportation documents without contacting managers or requesting the documents by mail or phone;
• reconcile overpayments;
• file for customs transit clearance – in 2020, more than 15 thousand transit declarations were issued.

In 2020, new features were added to MY.FESCO personal account to calculate the cost of drayage for Moscow and Moscow Region stations. As a result, over 12 thousand requests for quotes for truck transportation were processed in the course of 3.5 months with minimum involvement of FESCO employees.

Communication with customers via chat bots

FESCO strives to develop new channels of communication with customers. One of them is a Telegram chat bot, which can automatically help customers to:

• track container status;
• get contacts of their designated FESCO manager;
• file a transportation request..

At any point, the customer can request to be assisted by a FESCO employee.

We are constantly expanding the range of enquiries that the chat bot can handle. Going forward, it will also be available on other popular communication platforms.

Customer relationship management

FESCO has implemented the Microsoft Dynamics CRM system, which is used to communicate with new and existing customers and maintain our customer base. It is used by the Company's sales team in order to:

• plan sales and analyse actual performance;
• segment our customer base for targeted communication;
• monitor customer activities;
• analyse the sales funnel;
• plan customer events and analyse their effectiveness.

The CRM system launch helped us to expand the customer base and successfully release new transportation services to the market.

Novosibirsk terminal automation

FESCO completed the automation of its Novosibirsk terminal operations. As part of this project, we:

• developed a new information system for managing container operations;
• optimised production chains;
• put into operation impact- and frost-resistant mobile equipment for foremen working on-site and operating loaders;
• set up digital services for terminal users and motor carriers (incoming and outgoing container assignment to carriers, planning time slots for motor vehicles, informing drivers about changes in the schedule).

Thanks to the automation, we now get the maximum information about the container and the next stages of its route in advance, before it enters the terminal, and can accurately schedule and minimise the number of operations required for handling it. All chains of operations are now managed by the information system, and employee tasks are assigned by the algorithms only.

The hardware and software developed during the project helped us to:

• reduce container handling time;
• optimise the terminal's internal logistics and load on its lifting equipment;
• analyse and forecast the terminal's current and future workloads to enable prompt decision-making;
• for customers and motor carriers – plan container arrivals, departures and handling time at the terminal, and minimise the waiting time in line.

Trucking and motor transport managemen

FESCO has completed the automation of trucking and motor transport management. The project included the development and implementation of a transportation management system (TMS), which can:

• collect requests for container transportation;
• automatically calculate the cost of trucking for each request;
• automatically prepare trucking schedules based on the requests received and vehicles utilisation rates, taking into account cargo characteristics, route details and vehicle capacity;
• calculate the demand for third-party vehicles and assign carriers;
• ensure timely maintenance of the Company's own fleet.

The TMS is deeply integrated into FESCO's digital landscape to effectively manage the trucking component of its intermodal operations.

Joint partner projects

INTERTRAN project with Russian Railways – digital transit transportation

In September 2019, FESCO and Russian Railways, supported by the Federal Customs Service, launched INTERTRAN, a project to achieve a fully electronic workflow for intermodal imports shipped through Commercial Port of Vladivostok. The INTERTRAN information technology ensures efficient digital interaction between the seaport, the railway and the Russian Federal Customs Service using electronic workflow and enabling paperless processing of up to 30 transactions.

In August 2020, INTERTRAN was expanded to cover transit cargos going to Belarus, providing full digitalisation of transit intermodal container transportation from China to Europe (Republic of Belarus).

As a direct effect of the project implementation, document processing time at VMTP was reduced from 5 days to 21 hours, and the transportation and customs documents are now submitted to Russian Railways within an hour upon receipt from the Federal Customs Service.

FESCO, Russian Railways and KTZ are currently seeking ways to expand INTERTRAN to shipments to Kazakhstan. The next step of the technology roll-out will be to cover transit transportation from the Asia-Pacific countries to the European Union.

Building an ecosystem with the Federal Customs Service

Commercial Port of Vladivostok launched new services for its customers to speed up the receipt of customs requirements and file requests for customs' permits for sample collection.

To implement these services, customs officers' accounts were set up in the port’s information systems, which is a unique arrangement in Russia.

New services eliminated the need for paper media and reduced the time for obtaining customs’ approvals from three days to four hours.

VMTP continues to improve these services in 2021 and plans to have Russian Railways connected to it.

Direct interaction with SIBUR via a personal partner account

FESCO and SIBUR, Russia’s largest petrochemical company, implemented a joint project to integrate FESCO’s digital transportation services with SIBUR’s intermodal container transportation system via a personal partner account. The integration provides for the exchange of the following information streams: approving transportation requests and their pricing, tracking the delivery of empty containers and the movement of loaded ones, booking vessel space, and bill of lading issuance.

The integration enabled FESCO to receive SIBUR’s transportation requests in real time, promptly assess and plan container availability and delivery, thereby improving the quality of customer service. SIBUR, in turn, now has transportation information added directly to its information system and can handle all required arrangements within its own information environment.

Information exchange with ECODOR

FESCO and ECODOR, a container terminal operator, established seamless interaction between their information systems. FESCO automatically provides ECODOR with container transportation requests and vehicle entry requests as well as customs transit information for containers shipped to ECODOR's terminal. ECODOR, in turn, shares information about FESCO container departures from its terminal as well as handling costs.

The data exchange enabled the direct transfer of transportation information and consequent higher efficiency of planning and request processing, which improved the quality of FESCO’s services for shipments from Moscow

Internal digitalisation

FESCO's unified accounting system

FESCO implemented a large-scale project to introduce a unified accounting system and transferred the accounting and tax functions of most of the Group's companies to a unified information platform. The unified accounting system is integrated into FESCO's IT environment and promptly receives all information from operational information systems to be reflected in accounting.

The new unified accounting system enabled us to:

• significantly speed up and simplify accounting operations and unify them taking into account the specifics of the Group's companies;
• automatically reflect intra-group transactions in the accounting documents;
• reduce the time required to prepare accounting and tax reporting;
• create a single repository for primary management accounting data and, thus, promptly receive management reports in sufficient detail.

VMTP is No. 1 in cargo turnover in Russia

VMTP significantly improved cargo movement and turnover rates by introducing process automating IT solutions for inspection site operations, train loading planning, warehouse management, integration with Russian Railways, high-capacity container weighing, and release of cargos.

All steps and data are recorded in special apps installed on tablets. The information system is used by tally clerks to receive, release and record cargoes, and by STS operators to load and unload vessels. Stevedores initiate cargo movement and handling tasks and control their execution by dockers and truck drivers, while technologists and warehouse managers coordinate the process. Each employee sees the container's origin and destination.

VMTP strives to be one step ahead by:

• solving problems of any scale by constantly improving the quality of its wired and wireless networks and using advanced server equipment;
• continuously enhancing the system’s core and workflow, and integrating with customers' systems and carriers’ cloud services;
• transitioning from traditional reporting to online monitoring and big data analytics instrumental in forecasting future operations.

From public to private network – 5G technologies

The global port industry is increasingly switching to private mobile PLTE networks. VMTP intends to deploy a private mobile network to cover the entire port territory in 2021.

Private mobile networks enable simultaneous connection of multiple digital devices, mass transmission of sensor data, and real-time use of operating data. This will be another step in the port's active digitalisation and the basis for building its digital twin.

Electronic planning of the port's truck throughput capacity

VMTP developed an IT solution to boost the speed of truck handling. The carrier can now inform the port automatically about the upcoming cargo arrival via GPS/GLONASS. Once the point with specific coordinates is reached, a crane operator receives an automatically created task to prepare the container for loading on a truck. Thanks to the solution, containers can be prepared for loading 8–15 minutes before the truck’s arrival to the port, reducing the handling time for each truck by 10 minutes.

Neural networks – railcar/container identification

VMTP implemented railcar/container ID recognition to speed up cargo handling at the port. This solution relies on neural networks, and in three years since deployment its accuracy reached 98%.

Integrated business process management

FESCO implemented a unique project to create a unified digital space for internal business processes based on the Electronic Archive (BPM) information system. The system is used to manage:

• accounting and reporting business processes;
• HR processes and procedures;
• legal (contractual, claim) processes;
• document services for customers (provision of primary financial documents, request and generation of reconciliation reports, transportation document sets, etc.).

The Electronic Archive (BPM) system also serves as a single corporate centre for legally binding electronic workflow, which is used to collect, sign and submit/receive primary documents and contracts.

The platform relies on stream processing of requests and documents. This was achieved through the unification and simplification of internal business processes, the use of advanced digital tools (bar coding, automatic document recognition, electronic signatures, intelligent search and linking of documents), and close integration with FESCO’s information systems.

The Electronic Archive (BPM) system is at the core of FESCO's internal digitalisation, which continues its active development as we launch new services both for the Group companies and its customers.

Digital services for FESCO employees

FESCO launched employee personal accounts – a specialised portal for personnel and administrative services. The account allows FESCO employees:

• to receive personal financial (payroll) and HR information (current vacation schedules, shift schedules, etc.);
• to submit requests to the Company (certificates and documents, vacations, time off, etc.);
• to send administrative requests.

Personal accounts can be accessed from desktop as well as self-service kiosks on production sites, from mobile app, or in a Telegram chat bot.

The personal account provides a full scope of digital services for employees, while HR process unification improved their quality, accessibility from various locations, and processing speed. By the end of 2020, 100% of FESCO employees had access to their personal accounts, with 9,071 requests submitted through the desktop version.

Procurement and supply management

FESCO is consistently digitalising corporate control functions. The project for a unified supply and procurement management consolidated the Group’s control procedures and created a chain of identical business processes for every step from initiation to payment. A unit's declared need for goods or services is satisfied through the centralised procurement and supply service, which:

• covers the need through existing contracts;
• organises the procurement procedure;
• selects suppliers by price or other criteria;
• responds to the needs of various units with one procurement procedure, taking into account inventory classifications, addresses and timelines for deliveries.

The procurement platform performs the following control procedures:

• control of compliance with the budget at the procurement stage;
• control of amounts/limits set by the contracts and maximum contract price;
• control of the delivery;
• control of timely payments and availability of closing documents accepted by the unit;
• security screening of potential suppliers.

Cybersecurity

Cybersecurity is among FESCO's key priorities in IT development. Early analysis of existing cyber threats for every new IT solution is a prerequisite for digital transformation and vital for a speedy launch.

FESCO is constantly improving the protection of its digital infrastructure against Internet threats, which significantly reduces the risk of disruptions in the Company's information services. The successful piloting of the Security Operations Centre, an information security monitoring service, accelerated its roll-out.

FESCO's cybersecurity awareness programme helps to reduce the human factor in emerging phishing and social engineering threats to digital infrastructure. It also enabled us to maintain proper information security when a significant part of employees started to work from home. The Company monitors employees’ compliance with the corporate information security rules.

Digital infrastructure

Digital services developed by FESCO require a foundation in the form of a modern digital infrastructure that meets high standards of performance, security, reliability and resiliency.

FESCO completed a large-scale project for the complete transition of its digital infrastructure to a cloud service model. FESCO infrastructure is supported by two data centres in Moscow and Vladivostok, which enables flexible load distribution, high productivity and security of FESCO’s information services. FESCO is not facing any resource constraints and, if necessary, can increase capacity virtually without limits to support new ambitious initiatives. The data centres communicate through dedicated channels with data duplication. If data transmission is interrupted, communication is restored within five minutes.

A similar model is used for services that traditionally rely on corporate infrastructure. Among them is the per copy printing service implemented in all units of the Company. The service helped guarantee printing quality, minimise printing failures, and set up convenient print areas available to every employee.