Pandemic weight. What happened to Russian logistics during quarantine

Almost 20% of small and medium-sized enterprises in Russia did not survive the quarantine. Buying raw materials for production in other regions, importing and exporting finished products, many of these companies needed freight transportation in one way or another. We spoke to Andrei Mironov, Commercial Director of Jam Modern Logistic, and found out how the industry reacted to the crisis, which affected every entrepreneur.

Tell me, were there any restrictions related to the closure of borders, reduced demand for cargo transportation services? During the quarantine, all market participants felt the problems. Warehouses were closed, invoices were not paid - many organizations suspended their activities. For the most part, the restrictions were caused by the processes taking place within the framework of customs clearance of cargoes. For example, we had a situation when some containers stood at the border in Zabaikalsk for this reason. We had to use our own resources to resolve the issue as soon as possible.

How did your company feel during the crisis? In general, our export business did not lose momentum. We felt only a slight decline in the domestic transportation segment. Some clients suspended their activities and did not ship their products, some warehouses were closed. However, we processed those requests that came in on time, prepared documents for them, sent transportation - everything as usual. Railroad and multimodal transportation were also carried out in a normal mode - they were not affected at all. Can you name the sectors of your clients' economies that suffered the most and caused your lost profits? Is there some kind of correlation that can be traced here? Let's say the woodworking industry went down and there were difficulties that affected you.

In our case, the woodworking industry has not suffered much - most of our transportation is export. As for segments, it is primarily consumer goods, which we transport most actively. And there were restrictions there - not all warehouses were working. For example, we work with Kimberly-Clark and Russian Paints. They had government orders, and they were postponed to a later date. But one way or another, the orders had to be fulfilled, so the work was a little bit time-consuming. After the bans were lifted, we made up for everything together. The oil and gas industries were also significantly affected - they all closed for this period. As far as I know, the construction industry survived the crisis very gently. If a construction project was underway, it was not shut down. Yes, they did. The only thing is that demand has only fallen slightly. But in Moscow, all the construction sites paused, while the regions shipped and worked.

Do you have a lot of international shipments and what percentage was affected by the quarantine? The main share of international transportation comes from orders from the woodworking industry. We do not have so many imports, and in general this segment was not affected. Do I understand correctly that despite the fact that it was impossible to go abroad for tourist purposes, international deliveries of goods from abroad did not stop? That is correct. Our main international direction is China. We also carry goods from Europe and Asia, and all these directions did not suffer much, unlike the domestic direction. In general, we kept the bar and fulfilled all requests. According to your estimates, how did your industry colleagues and competitors feel? How did they get through the crisis? Many logistics companies closed down, disbanded their staff, sent their employees on unpaid vacations, did not pay salaries, and this affected many people. We withstood this period, and I would even say, withstood it with dignity. Now we are increasing volumes and attracting new clients. We are developing. Quarantine was critical for some people, and we withstood it well due to the fact that we are serious about the long-term prospects of work, we have resources in the form of our own containers, vehicle fleet, and good financial support. I think these are the strengths that will help us work for many years to come.

Can you name a time point when you realized that the crisis was over, everything was recovering, and you were growing? Maybe August, the end of July? Yes, probably the end of July. That's when clients started coming back with requests. But even during the quarantine, we maintained relations with them and understood that the production is accumulating, there will be orders, and everyone just expects the lifting of restrictions and wants to fulfill obligations under contracts. Tell us how you worked during the quarantine and how much has the format and processes changed so far? (September 2020). We worked remotely, not many people were in the office. All the processes of our business had been worked out years ago, so we were able to transition to a remote format quite easily. The quarantine showed that our specialists excelled at being able to work autonomously from anywhere in the country. External and internal communications were not affected at all. Have your employees gone into the office yet? Yes, we are in the office. We are fully operational. Do you have the feeling that you can save money on the office and continue to let them work at home? We have, in fact, done that. In part. We had several rooms in our Moscow office, and we quietly gave up some of them. Some of our employees work in the office, and some work remotely. But we all get together regularly for planning meetings.