Vladislav Zhukov, Managing Director of Sea Port of Saint-Petersburg, tells about ferrous metal transportation, container lines and ruble settlements
In July 2017, Vladislav Zhukov took up the post of Managing Director of Sea Port of Saint-Petersburg. In his interview with DP, the head of the stevedoring company told about where the port of Saint-Petersburg is to grow, what the prospects of Russian container lines are and how the cargoes should be taken over from the ports of the neighboring countries
How tough is the competition in the market of stevedoring services?
— The competition is getting tougher, indeed. None of the ports has a steady load and the competition level is changing. It is seen in the struggle for resources, both financial and human ones. As for the Baltic states, we understand that the state policy is essential for the development of competitive environment. The business meets those challenges and responds. If cargo flows are redirected to the domestic basin, we will be happy to take them over. Yet, all the numbers should add up because the first thing the consignors do is counting their costs.
Can Saint-Petersburg finally take over all cargoes from the foreign ports on the Baltic Sea?
— It should not be considered as a static situation. As of today, I think, it cannot. The facilities of the Big Port of Saint-Petersburg are currently loaded by slightly over a half but we understand that doing nothing we will not improve the situation even with the proficit of facilities. A client takes a decision on selecting this or that route taking into consideration a combination of factors, not only prices. Nothing will happen without qualitative changes. If we can meet the market, maintain the quality of services and infrastructure while looking like a European port, I think the clients will select us.
What does Big Port St. Petersburg mean for the city?
— The city should not be fully identified with the port. The city is more spacious and significant. On the other hand, Saint-Petersburg was born as a port city. In the European Union I saw the examples of ports fitting harmoniously into large and not very large cities. The port and the city should complement one another. The port should take into account the issue of transport infrastructure. For example, some 90% of cargo comes to the port by railway bypassing the motorways of the city while the remaining 10% are divided between road and river transport. The city, in its turn, should provide the stevedores with privileges since the port ensures employment and budget revenues. 226
Where should the port of Saint-Petersburg develop amid the expected growth of turnover?
— Of course, new terminals should appear outside the city limits because it is impossible to build into the city body. But the development of stevedoring companies already operating inside the city should be focused not on expansion but on narrow specialization, on creation of additional commercially successful services. Among them are multi-purpose warehouses, state-of-the-art transshipment points with unique technologies. Qualitative changes will let develop the port in the big city.
Sea Port of Saint-Petersburg throughput is growing now. Which are the priority cargoes today?
— The key cargo is ferrous metal. Its annual turnover is about 3.5 million tonnes. As compared with the previous periods, our range of cargoes is wider now, it has almost doubled that not only brings additional challenges for transshipment but also lets the port develop.
The second most significant cargo is non-ferrous metal. The third position is held by big-bags with the products of chemical companies and wood pellets. Today, their volume is about 20% higher as compared with that of the previous year. We managed to redirect big-bags that earlier flew to other stevedores to our terminal.
How important are containers amid general containerization?
— In this segment, we place emphasis on value rather than on volumes. It's perfectly clear to everyone that facilities for transshipment of containers are excessive today. Therefore, the current competition is quite high in this segment of the market.
For ourselves, we see the development prospects in the part of feeder services that is dealing with small lines providing services on point-to-point delivery of cargoes.
Such clients require more elaborated services. They need not only transshipment but also additional operations with cargoes carried in containers. Our way is an individual service without the pursuit of volumes.
As for container lines, one of the recent ones you started servicing is the Sea Connect. How is your joint work going on?
— We continue our fruitful cooperation. We have a plan of joint efforts to improve the service. For example, internal audit of container handling process on the terminal was held with the participation of the line.Sea Connect is a foreign line like many others.
What about the prospects for Russian container lines?
— Container business is one of the economy components in any country and I would not say a definite no. However, to catch up and overtake a company needs an impetus allowing it find itself relevant among the acknowledged leaders. But it’s rather an exception. The market of Russia is not likely to see it in the nearest future.Sea Port of Saint-Petersburg has been upgrading its equipment from 2016.
How far has it advanced in this process?
— As of today, we have crossed the equator having replaced more than a half of our equipment. Our fleet numbers about 200 units of port equipment, 39 portal cranes. First of all, we replace the loaders. In August we will take delivery of new Vityaz crane, which is actually of Russian origin. From the beginning of the year we have allocated more than RUB 140 million for our development programme. More than a half of total investments are spent for equipment upgrading.
What is the practical effect of this programme?
— The new equipment lets reduce the cargo handling time and contributes to productivity.
Now we are working to upgrade handling of wood pellets. That will facilitate handling of vessels to satisfy our clients. We will find a solution before the end of the year.
Ruble tariffs have been set in the port this year. How has it influenced the stevedores?
— Our work is based on import/export operations and foreign currency rates is not our personal fancy but an objective reality. Our contractors are mostly foreign companies. To offer European services we should base on measuring units they are used to. Having switched over to ruble tariffs we have increased paperwork and complicated processes related to monetary and financial operations. Yet, it has not affected the economy.
PR Department
