Services

FESCO continues to hold one of leading positions in Russia's container transportation market. The Company’s intermodal transportation offering includes liner shipping, port handling, railway transportation, customs clearance and last mile services. To provide intermodal transportation services, FESCO relies on its own and leased assets, such as vessels, containers, fitting platforms, trucks, and terminal and port facilities in Vladivostok, Novosibirsk, Khabarovsk and Tomsk.

FESCO services the key transport corridors and provides rail and sea connection between all Russian regions and major economic hubs of Asia and Europe. FESCO Transportation Group focuses on all types of container transportation (domestic, export, import, and transit) and is the leader in shipping containers from South Korea, Japan and China to Russia via the Far East.

FESCO offers superior shipping frequency and speed of delivery while also tracking cargoes across all stages of transportation and automating 100% of the document flow.

Liner shipping services

FESCO ranks among the liner shipping market leaders in cargo shipments between ports in Asia and Russia’s Far East and also in the domestic maritime transportation market. In 2020, the Company's share of domestic maritime transportation stood at 43%.

FESCO provides 19 regular liner shipping services, with its geography of maritime container transportation spanning over 100 ports globally.

In 2020, FESCO continued to expand the coverage of its sea lines in China, adding Wenzhou as a new port of call within the FESCO China Express-2 Eastern Arrow container shipping line. In late November, the line started servicing the Vladivostok–Shanghai–Ningbo–Wenzhou–Vladivostok route. Transit time from Wenzhou to Vladivostok is 2.5 days. The sea port of Wenzhou is located in the south-eastern part of Zhejiang Province, which hosts a variety of factories and is positioned as an alternative to Ningbo, one of China’s busiest ports. The updated line is the only direct maritime service from Wenzhou to Russia.

Rail container services

Using its own and leased fitting platforms, FESCO runs regularly scheduled container trains and carload trains both internationally and domestically.

Every week, FESCO dispatches over 60 container trains from Vladivostok, Moscow, St Petersburg, Novosibirsk, Yekaterinburg, Krasnoyarsk, and Khabarovsk, as well as Uzbekistan.

To expand the geography of container transportation, the Company launched new services in 2020:

• FESCO Baikal Shuttle (Silikatnaya–Batareynaya);
• FESCO Blagoveshchensk Shuttle (Selyatino–Blagoveshchensk);
• FESCO Far East Shuttle (Krasnaya Rechka–Vladivostok);
• FESCO Mongolian Ural Shuttle (Naushki–Koltsovo);
• FESCO Ob Amur Shuttle (Novosibirsk-Vostochny–Krasnaya Rechka);
• FESCO Samara Shuttle (Vladivostok – Zhigulevskoye More);
• FESCO SPB Amur Shuttle (St Petersburg Finlyandsky–Krasnaya Rechka);
• FESCO Trans-Siberian LandBridge (Vladivostok–Brest Severny);
• FESCO Ural Amur Shuttle (Koltsovo–Kransnaya Rechka).

FESCO continued developing China–Russia–China land routes. In 2020, the number of container trains on export and import routes increased by 117% and 183% YoY, respectively. The ramp-up of car transportation projects became one of the key drivers behind increased shipments from China.

To expand the geography of land import services and meet growing customer demand, the Company launched new routes from China:

• Hefei (China) – Zamyn-Üüd (Mongolia) – Yekaterinburg;
• Hefei (China) – Zamyn-Üüd (Mongolia) – Krasnoyarsk;
• Daqing (China) – Grodekovo – Bely Rast (Moscow);
• Daqing (China) – Grodekovo – Ghent (Belgium);
• Xuzhou/Suzhou/Jinan Zamyn-Üüd (Mongolia) – Silikatnaya (Moscow).

FESCO put in place regular export container trains to China from the stations of Lena-Vostochnaya, Igirma, Irkutsk, and Bratsk.

In June 2020, the first container train was dispatched from the station of Biklyan (Republic of Tatarstan) to China’s Chengdu carrying products from the Nizhnekamskneftekhim plant. In September, FESCO sent a container train from China’s Liaoning Province to the Bely Rask Terminal and Logistics Centre in the Moscow Region. The new service targets shipments of chemical products.

As part of expanding the geography of its transit services, FESCO launched a container train for expedited delivery of cars from Heilongjiang Province (China) to Belgium through the Suifenhe (China) / Grodekovo (Primorye Territory) and Brest (Belarus) / Malaszewicze (Poland) border-crossing points. Trains depart once every month before reaching a target frequency of four trains per month and cargo volume of 100 TEU per month. The first train with forty-one 40-foot containers with 123 cars arrived at the point of destination in Belgium on 10 May. The total time en route was 23 days.

Intermodal services

FESCO provides domestic and international intermodal services, offering export, import, and transit container transportation through the ports of the Far East, St Petersburg, Novorossiysk and other cities with potential delivery to Russia, as well as container transportation through land border crossings. FESCO services enable cargo transportation via any routes using several modes of transport and reduces time in travel thanks to the right combination of maritime and rail schedules.

FESCO continued developing Trans-Siberian Landbridge, a service to deliver cargoes from Asia to Europe and back via Vladivostok. As part of the service:

• the first container train was dispatched from Japan to Europe, supported by the Ministry of Land, Infrastructure, Transport and Tourism of Japan (MLIT) and Russian Railways. The transit time from the port of Toyama (Japan) to Kutno (Poland) was 17 days. Shipping a similar cargo from Japan to Europe by sea usually takes an average of 45 days;
• containers for the Olympic Games were delivered to Tokyo;
• the first full-length container train was dispatched from Europe to Vladivostok with destination ports in Southeast Asia. Consisting of thirty-one 40-foot containers, the train reached Brest (Belarus) from Duisburg (Germany), followed by the containers being transshipped to the 1,520 gauge trains to be dispatched to the station of Vladivostok. At Commercial Port of Vladivostok (VMTP), they were loaded onto a vessel and then delivered to Shanghai using FESCO’s liner shipping. Time in transit from Brest to Shanghai was 20 days;
• dangerous goods were included into the range of cargoes shipped from Asia Pacific to Europe.

FESCO launched a new seasonal intermodal container service from Novosibirsk to communities in Yakutia. Delivering around 300 TEU of various cargoes, from foods to construction materials, the Company secured almost a quarter of the market on this route. The service was first piloted in July 2020 before going fully operational and regular in August. The intermodal service includes railway delivery by a FESCO regular train from Novosibirsk to the Lena station (Irkutsk Region), handling of cargo, its transportation by river to ports on the Lena River, and delivery by trucks to other communities in Yakutia upon request.

In line with its focus on container transportation of grains, FESCO completed its first intermodal shipment of containers with barley from Omsk to China. The scheme included transportation of sixty-four 20-foot containers with container liners by a FESCO train from the Karbyshevo-1 station in Vladivostok, handling by VMTP, and shipping by regular sea container lines to China’s Tianjin and Xiamen. Transit time was within 30 days. As part of the shipment, FESCO experts provided a full range of support services, including customs clearance and provision of all the documents required for export deliveries.

As part of an agreement signed during the Krasnoyarsk Economic Forum in 2019 to develop exports of containerised cargo from Siberian regions to China, FESCO teamed up with Rail Cargo Logistics – RUS, a logistics operator, to organise the first transportation of canola oil in containers with flexitanks from the Krasnoyarsk Territory to the port of Nantong in Jiangsu Province, China. Transit time was 35 days. The scheme of transportation included the following stages: truck transportation of oil from sites in the Krasnoyarsk Territory to the BLTK terminal in Krasnoyarsk; delivery of containers with flexitanks to Vladivostok by the regular FESCO Yenisei Shuttle train; delivery by the FESCO China Express regular sea line to the port of Shanghai; loading onto a barge, and transportation by river to the port of Nantong.

FESCO is the only company involved in the refrigerated transportation of perishable goods requiring special temperature conditions, which uses its own assets on international and domestic routes: sea, rail and road transport, as well as carrier- and shipper owned containers. Refrigerated container transportation is carried out by Dalreftrans on the basis of the Liner and Logistics Division.

FESCO continued to develop its business of refrigerated container transportation by:

• launching an intermodal container service to deliver fish and seafood from Russia’s Far East to China’s Jilin Province on a regular basis. Under the service, products are delivered in refrigerated containers using FESCO regular services from Kamchatka, Magadan and Sakhalin to Vladivostok as well as transportation by road from sites in the Primorye Territory. The cargoes are then handled by VMTP and sent to the Hunchun station in China by rail. Test shipments along the new route began in May 2020 before evolving into a regular service in September, with trains departing once a week. The travel time from Vladivostok to Hunchun is around four days and is expected to be reduced to two days going forward;
• organising the first shipment of refrigerated containers with perishable goods from Russia to Mongolia from the Naushki border crossing. Containers with foods, cosmetics and other goods were dispatched as part of a refrigerated train powered by a diesel-generated container from the Selyatino station (Mosow Region) to the Ulan Bator station (Mongolia). Transit time was 20 days. The key feature offered by this mode of transportation is 100% contactless delivery, which is an obvious benefit in the COVID-19 pandemic. The Company plans to make these shipments on a regular basis;
• transporting the first refrigerated container with a controlled temperature environment for perishable goods. The test shipment was arranged jointly with Digital Platforms Development Centre and Softtelematika and was overseen by the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) as part of the Russian government’s plan to build a system for transportation and control of perishable goods. The container carrying temperature sensitive cargoes had a digital navigation seal with temperature sensors. By using the seal, the sealing operator was able to track the cargo temperature across the route and transmit information in real time mode to Mercury, an information system maintained by Rosselkhoznadzor;
• organising regular shipments of perishable goods from Moscow (Selyatino) to Yakutia (Nizhny Bestyakh). Transit time is 18 days. Products that require a controlled temperature environment during transportation are mostly frozen ready-to-cook products, meat, fish, vegetables, fruits, confectionery, and dairy products.

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 2020, FESCO as a 3PL provider transported 2,037 units of special equipment and issued 12,857 transit declarations and 18,825 customs declarations.

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 the transit of cargo along the route, including border crossings. The project logistic services include:

• engineering and construction support of transport and logistics projects;
• handling of bulky cargo;
• transportation of bulky cargo by sea and river transport;
• transportation of bulky cargo by specialised vehicles;
• transportation of bulky pieces equipment by rail;
• delivery of oversize and heavyweight cargoes by any means of transport;
• customs support;
• installation and assembly of cargoes in their designed position at the destination point.

FESCO’s business priorities include expanding the portfolio of contracts signed with large customers and increasing the share of the market for the transportation of heavyweight and oversize cargoes.

In 2020, a total of 20 projects were completed, with more than 200 thousand freight tonnes of project cargo transported.

FESCO has extensive track record of handling heavyweight and oversize cargo, including equipment for the construction of nuclear power plants in countries worldwide. In 2020, the Group transported extra heavy equipment for the Rooppur Nuclear Power Plant in Bangladesh and Akkuyu Nuclear Power Plant in Turkey.

Other major projects completed by FESCO in 2020 included:

• redeployment of four Liebherr rubber tyre gantry (RTG) cranes from the St Petersburg terminal to the Vrangel terminal (Primorye Territory). To minimise time in transit, the cranes were transported along the Northern Sea Route for a total of 28 days;
• transportation and installation of Siemens energy equipment for the Yerevan Thermal Power Plant. With a total weight of 14.5 thousand freight tonnes, the cargo was delivered to Armenia from Georgia by rail and by road.

FESCO provides container transportation by road as part of intermodal services to deliver cargoes from arrival terminals to end customers and also as part of long-haul container transportation across Russia. FESCO also offers full truckload (FTL) and less-than-truckload (LTL) shipping by car from Europe to Russia and domestically from the consignor's warehouse to the consignee's warehouse.

The fleet is consolidated on the basis of FESCO TRANS, which uses its own and outsourced trucks in Moscow, Vladivostok, St Petersburg, Khabarovsk and other Russian cities.

With more than 20 years of experience in the shipping agency market, FESCO is among the largest agencies in Russia servicing vessel owners and charterers. FESCO provides the following shipping agency services:

• arrival/departure of Russian and international vessels;
• electronic workflow with customs authorities;
• supply of ships with fuel, water, food, and spare parts;
• ship repair;
• mooring/unmooring of ships;
• cargo operations;
• crew change.

In 2020, FESCO provided comprehensive agent services to vessels transporting the Odyssey floating launch platform of the Sea Launch spaceport to the port of Slavyanka in the Primorye Territory. FESCO was responsible for supporting and providing maintenance for the vessel within Russia, preparing all the necessary documents, and overseeing the unloading of the platform at the destination port.

Since China is a key market for FESCO, there are three full-fledged companies based in China with a wide portfolio of logistics services for destinations popular with Chinese customers. The companies’ offices are located in Shanghai, Beijing, Hong Kong, Guangzhou, Tianjin, Shenzhen, Ningbo, Qingdao, Dalian, and Chongqing. With its own representative offices in China, FESCO is well-poised to sell its transport solutions to direct shippers. In 2020, FESCO companies in China employed over 120 people, who organised forwarding and transportation of 305 thousand TEU vs 267 thousand TEU in 2019.

The key achievements of 2020 were effective business growth and expansion amid the COVID-19 pandemic, with FESCO:

• successfully adding a new port of call in Wenzhou, with the first vessel entering it in November 2020;
• rapid growth in the railway transportation market, with a total volume of 14 thousand TEU in 2020, including cooperation with automotive majors such as Chery, Haval, and Changan;
• improved customer experience following the introduction of an electronic booking system;
• ramping up activities in China’s domestic market for container transportation (freight forwarding), with considerable improvements in business efficiency and profitability.

Plans for 2021 include:

• focus on enhancing operating efficiency;
• continued growth in the linger segment amid tougher competition;
• increased volumes in the railway transportation segment;
• weekly shipments from the port of Wenzhou;
• development of the air transportation segment of the freight forwarding market.