1. Some issues of transport-logistics business in Saint-Petersburg Mikhail Pimonenko North-West Russia Logistics Development Center Rail Baltica Growth Corridor – First Transnational Roundtable Conference Vilnius, Lithuania, 24 November 2011

2. 1.Recent Saint-Petersburg railway news (high lights) 2. Top Saint-Petersburg railway business companies. 3. Crisis challenges and logistic approach opportunities in business

3. Basic events at governance level 1.Transport Coordination council: - April 2011 foundation - Ministry of transport, SPb and LO Government. 2.Meeting with JSC “RZD” - November 2011 - agenda “General Scheme of Spb Railway Node Development” 3.Project “General Scheme…” - customer JSC “RZD” - cost 120 mln Rub ( RZD – 60; RF budget – 30; SPb budget – 24; LO budget – 6)

4. 4 First turn fields of development Transport connections development at SPb-LO borders according to demand Design and construction of 2-nd Ring Road Northern direction Eastern direction Southern direction

5. SAINT-PETERSBURG AND LENINGRAD OBLAST RAIWAY INFRASTRUCTURE Сортировочные и грузовые станции

6. Station “Avtovo” Station “Avtovo” JSC “PKT” JSC “Petrolesport” Station “Predportovaya” Station “Predportovaya” Station “Shushary” Station “Shushary” “Modul” Ltd. Ring road “block-train” “Voskhod” Ltd. “block-train” “Logistica Terminal” Ltd. Station “Zanevsky post” Station “Zanevsky post” “Logistics park “Yanino” Ltd Usage of “block-train” technology

7. TRANSPORT & LOGISTICS TEAM, 360 EMPLOYEES TAKE COMMAND OF Railway transportation & freight forwarding Inland hubs Container door-to-door Freight forwarding Logistics solutions

8. Inland hub for combined traffic in Saint-Petersburg Bonded container terminal Features: - 6 km to the St. Petersburg Sea Port - total area — 4,9 hectares - storage capacity (at a time) — 1 500 TEU - terminal-port Shuttle block trains Bonded warehouse class “A” Features: - Space 4500 m² - Storage capacity 6 900 pallets - Permanent temperature control $200 mln. inland hub projects in Russia biggest cities

9. Direct agreements with the railway companies of: Russia, Ukraine, Belarus, Lithuania, Kazakhstan, Finland, Estonia, China Freight forwarding: CIS import, export and transit by rail, road and sea 25 branch offices in Russia and abroad Agents at all Russian border crossings FREIGHT FORWARDING, LOGISTICS

10. MODUL Company Ltd. 1/3 Cargo turnover: containers - 200 000 TEU per year general - 500 000 tons per year

11. MODUL Company Ltd. 2/3 General area -12 hect ( Container term. area – 7,2 hect ) Container sorage capacity: empty – 800 boxes, filled -1100, ref – 120 Indoor warehouse: 2500 sq. m Local railways – 6 lines, total length – 2500m Three entrance gates for trucks.

12. MODUL Company Ltd. 3/3 Equipment: Containers - rich-stackers 45 ton – 2; 30 ton – 2; General: mobile crane – 50 ton; loaders – 32; 22; 10;7;4;2,5;1,5 t

13. Traditional Delivery Technology 8500 types of perfumery goods BORDER SUPPLIERS CUSTOM VAT FEES & DUTIES 40% of price DELIVERY CUSTOMERS

14. Crisis challenges Beginning of financial crisis in 2008 led to: sharp drop of loan sizes in Russian banks; double price of loan; transfer to partly prepayment; decrease of deferment time till 30 days; requirement of economy drive; growth of quality requirements

15. Delivery Technology after Reengineering SUPPLIERS 12 Types of goods 2500 BORDER Consolidating warehouse Riga CUSTOM LOGISICS PROVIDER CUSTOMERS

16. Before After 1. Warehouse inventory, days 45–60 25–35 2. Time of capital circulation 25% 3. Total warehousing costs 20% 4. Custom and other costs per goods unit 10% 5. Share of fulfilled orders, 96% 96% 6. Ratio of covered demand, group A 85% 96% 7. Sales volume (2008–2010 гг.) 60% growth REENGINEERING RESULTS

17. THANK YOU FOR YOUR ATTENTION ! e-mail: pimw@wnet.ru Mikhail Pimonenko