Nurminen Logistics Oyj Nurminen News 2/2013

Activity ramps up in Vuosaari Sappi consolidates its shipping through the Port of Helsinki to Nurminen Logistics. s. 6

Unerring project logistics A successful project requires special expertise. s. 8

Much debate about TIR

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News

Nurminen Logistics’

Nurminen

An interview with Yuriy Leontiev, Director of a Vyborg-based customs forwarding company. s. 22

Contents

V.Somerpuro

2

Nurminen Logistics

16 Dmitriy Hmara sells Nurminen Logistics’ services in Estonia.

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20 Fedor Larionov is in charge

2/2013 3 Editorial There’s always sunshine after the rain.

4 Continuous

service improvement Nurminen Logistics’ terminals in Finland undergo an SQAS audit, the company launches new services and breaks records.

5 Nurminen

Now

What’s new in the logistics industry and at Nurminen Logistics.

6 The

largest paper and cardboard handler in the Port of Helsinki Pulp and paper company Sappi will consolidate all of its shipping through the Port of Helsinki to Nurminen Logistics’ terminal in Vuosaari.

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of Nurminen Logistics’ railway operations in Finland and Russia.

8

19 Alpo Kekkonen recharges his batteries by working on tractors.

Unerring project logistics We report on delivering pulp mill equipment to Belarus.

14 Centrefold

story:

a look at the logistics solutions employed in one large project.

16 Hotshot

salesman on the job Dmitriy Hmara sells Nurminen Logistics’ services in Estonia.

19 Alpo

collects tractors Terminal worker Alpo Kekkonen recharges his batteries by fixing up vintage tractors.

20 Taking

on new tasks Meet new Nurminen Logistics employees.

22 At

Russia’s gate to the West Yuriy Leontiev, Director of Vyborg-based customs forwarding company OOO Telk, talks about customs and the upcoming TIR changes.

26 References AGCO is the world’s thirdlargest manufacturer of agricultural equipment.

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Editorial

There’s always sunshine after the rain isolated location, so we must all come together to find ways to improve national competitiveness. Certain measures are in the works and being implemented, but they are not enough.

Russia made a major national policy decision this past summer, as the Russian customs announced plans to begin collecting additional guarantees at the border for transit shipments. We can only guess at the underlying reasons behind this decision. One perspective on the matter is provided on pages 22–25 by Yuriy Leontiev, Director of a Vyborg-based customs forwarding company.

Nurminen Logistics aims to react to these types of changing circumstances quickly by offering new logistics solutions when the old ones are no longer effective for one reason or another.

Our close long-term cooperation with our customers helps us understand the specifics of and changes in their operations. This also makes the benefits of our services very clear to our customers as well as the customers of our customers.

In this issue, we feature articles on two major service cases, based on long-term cooperation: an Andritz project delivery to Belarus and the consolidation of Sappi’s Finnish paper production handling at the Port of Helsinki to Nurminen Logistics.

These examples of successful cooperation brighten up the dark days of autumn. I am a strong believer in there always being sunshine after rain, both in business and in personal life. With this in mind, I would like to wish a sunny end to the year to all of our readers. We hope you enjoy this issue! s

The prevailing challenging circumstances are a concern for every­one: our company, our customers and our competitors.

V.Somerpuro

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t’s the same old story – profit warnings, adjustment measures and layoffs are in the news every day.

The truth is that the business environment continues to become increasingly difficult, especially in Finland. Structural changes in industry and various individual developments, such as the entry into force of the Sulphur Directive at the beginning of 2015, will pose even greater challenges to our operations in the near future.

The most regrettable aspect of this situation is that it hurts companies’ most important resource, namely their personnel.

Faced with these difficult circumstances, every company is forced to maintain its competitiveness and respond to structural changes and market fluctuations.

Unfortunately, Nurminen Logistics is currently also faced with difficult decisions that will have an effect on employees. Our team members have displayed tremendous solidarity and perseverance in a situation where their own careers may hang in the balance, yet they must continue to do their best for our customers. For that, I want to extend my sincere thanks to all of our employees.

The prevailing challenging circumstances are a concern for every­ o ne: our company, our customers and our competitors. We in Finland are currently lacking a sufficient mutual understanding of how to develop the country’s competitiveness in the global market. In today’s world we simply cannot have national laws or other restrictions that prevent us from competing on an equal footing with the rest of the world. Finland has a fairly

Topi Saarenhovi is president and CEO of Nurminen Logistics

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Nurminen NOW

Top3: Continuous

service improvement Nurminen Logistics’ new service provides customers with road transport from the company’s terminals when railway transport is not the best alternative. In addition, an SQAS audit has been conducted at all Nurminen Logistics terminals in Finland, and a record was broken: Nurminen Logistics transported its highestever load in Hamina.

Road transport from own terminals

Nurminen Logistics has launched a new service to offer its customers deliveries from its terminals by road.

By providing road transport, Nurminen Logistics aims to provide an improved level of service to its customers, for example when they require flexible logistics solutions to have goods delivered to locations without railway access. Nurminen Logistics can also provide door-to-door transport services with its road transport fleet. For customers who wish to have smaller inventory in Russia, the road transport service is a cost-effective alternative to railway logistics for transporting smaller consignments.

Nurminen Logistics currently has over one hundred transport units available to deliver customers’ products flexibly and quickly to locations for which railway transport is not possible or cost-effective.

Nurminen News 2/2013

S.Kekkonen

V.Somerpuro

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An SQAS audit was executed in October

The SQAS system assesses an organisation’s operations in the areas of quality, safety, the environment and continuous improvement. Nurminen Logistics’ operations were again evaluated in the Packed Warehouse category of the assessment. The audit included an inspection of the head office and all of the company’s terminals.

The results of the assessment will be published in November 2013. In the most recent round of assessments, conducted in 2010, Nurminen Logistics’ operations were rated excellent.

In the SQAS audit, the inspected site’s operating methods are given a rating based on answers to approximately 600 questions. The audit results for companies that have undergone the SQAS assessment are available to members of CEFIC, the European Chemical Industry Council, via the Council’s extranet service.

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The highestever load was transported in Hamina In early September, Nurminen Logistics transported its highestever load at the Port of Hamina.

The 19-metre high oil container, weighing 48 tonnes and with a diameter of 11 metres, was transported within the port area to its new location. The job exceeded Nurminen Logistics’ previous load height record by one metre.

This was not the first time Nurminen has taken on a challenging job of transporting containers for the customer in question. In 2008, four former oil containers were moved closer to the shore in Oulu’s Vihreäsaari.

This involved transporting a 180tonne container with a diameter of 26.5 metres using two trailers simultaneously, each more than 40 metres in length. s

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Vote for the best article in this magazine and win a Wiesenthal bluetooth speaker!

Responsibility for children’s traffic safety

NEWS

The route via Sea the Baltic their ideas on Two experts share Finnish transit how to save the p. 8 logistics industry.

Nurminen Logistics is committed to the safety of road users. Maintaining the condition of our fleet and the professional skills of our drivers are fundamental aspects of our day-to-day operations, however this year we have also made a special investment in children’s traffic safety.

At the start of the school year in 2012

and 2013, we have partnered with Kouluinfo Oy to distribute traffic safety books to local schools to help school children learn traffic rules and avoid hazards on the road. In addition to books, Nurminen Logistics distributed 800 reflector tags to first-graders in schools near its operating locations in September. s

Lea and Taisto

Lea directs and Taisto barks p. 19

1/2013

s.com

Nurminen

nurminenlogistic

other countries, Russia will no longer be covered by the GSP. Products originating from Russia will no longer be subject to preferential tariffs. Instead, they will be subject to the Integrated Tariff of the European Communities (TARIC) for third countries. According to current information, the general tariff collected will be at the same level as the current tariff, with no increases expected. More information on the subject is available on the Finnish Customs website. s

Magazine for Stakeholders

Since 1971, the European Community has granted developing countries preferential tariffs under the generalised system of preferences (GSP). The countries within the scope of the GSP have been provided with reduced tariffs or exemptions. The new GSP Regulation will enter into effect on 1 January 2014. The new Regulation (978/2012) will repeal the current Regulation (732/2008).

A particularly notable feature of the new GSP Regulation is a decrease in the number of beneficiary countries. Among

s’ Nurminen Logistic

V.Somerpuro

Changes to the EU scheme of generalised tariff preferences as of 1 January 2014

As the best article of Nurminen News 1/2013, the readers selected Taisto protects Lea, which described the Schutzhund activities of Hamina-based forwarder Lea Salonen and her dog Taisto. The article received 43% of the votes.

The second-highest vote getter was the Taking on new tasks column with a 20% share. The cover story on transit logistics and Keeping a keen eye on the result, an article on Accounting Manager Eila Kiretti’s workday, both received 11.5% of the votes. A softshell jacket was raffled among all voters and the lucky winner was Aki Saarinen of Mikko Saarinen Ky. We congratulate the winner!

in A unifying force y the Russian railwa ry freight indust

of the Executive Director An interview with Operators. p. 22 the Council of Railway

You can vote for the best article in this magazine at www.nurminenlogistics. com. A Wiesenthal bluetooth speaker will be raffled among all voters. The voting ends at the 15th of January 2014. s

Nurminen News 2/2013

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6

In Vuosaari

photos: Veikko Somerpuro

Nurminen Logistics to become the largest paper and cardboard handler at the Port of Helsinki The South-African pulp and paper company Sappi will consolidate its shipping through the Port of Helsinki to Nurminen Logistics’ terminal in Vuosaari. A comprehensive logistics solution from a single provider simplifies the supply chain and improves competitiveness.

A

s of the beginning of January 2014, all paper logistics from Sappi’s Kirkniemi paper mill via the Port of Helsinki will be handled

by Nurminen Logistics’ terminal in Vuosaari. The cooperation will gradually start with limited quantities in Q4 2013 to be fully operational on the

Nurminen News 2/2013

effective start date of 1 January 2014, date when the volume transfer will be finalized.

– Our supply chain from the Kirkniemi factory to markets in third countries will be simplified by having Nurminen Logistics handle our full volume of paper products in Vuosaari.

Consolidation is a cost-effective solu-

tion that improves our competitiveness, says Markus Höft, Logistics Process Leader at Sappi.

Nurminen Logistics and Sappi have already partnered in paper handling for several years. Nurminen Logistics has handled Sappi’s logistics for the CIS countries through its terminal in Luumäki since 2009.

In Vuosaari

– Nurminen Logistics is a competitive and flexible logistics provider. We are very satisfied with our long-term cooperation with Nurminen Logistics, and we are confident that Nurminen Logistics will continue to provide the same reliable logistics services as they have so far, Höft continues.

Vuosaari is ready – As Vuosaari is a relatively new and very modern terminal, we already have the necessary space, equipment and software to provide a high-quality customised solution to a major paper industry customer such as Sappi. The only major step we have taken to prepare for the increased volume in paper handling is adjusting our forklifts slightly to speed up paper handling, explains Leif Relander, Logistics Coordinator at Nurminen Logistics.

Sappi paper products are transported from the Kirkniemi paper mill by rail to Nurminen Logistics’ terminal at the port. The railway hall in the Vuosaari terminal has a 250-metre blind track, and wagons can be rolled in the terminal for unloading. The paper is then loaded into sea containers in the same terminal and shipped from Vuosaari to a number of destinations, the majority of which are outside Europe.

– Sappi is a significant account that will bring much-needed additional volume to Vuosaari. The increased volume will also result in one additional night shift at the terminal from Monday to Friday, Relander says.

Metsä Board continues to use Vuosaari In addition to the agreement concluded with Sappi, Nurminen Logistics has also signed a twoyear extension contract with Metsä Board for handling paper and card-

From Vuosaari to the world on a flat rack In addition to normal terminal handling services, Nurminen Logistics offers its customers various loading and unloading solutions for oversized shipments at its terminal in Vuosaari. The terminal has a special transport warehouse, a heavy hall with a reinforced floor and an 80-tonne bridge crane for lifting machinery and other oversized items easily on a flat rack shipping platform.

The flat rack facilitates the flexible onward transport of machinery and other items weighing less than 50 tonnes from the harbour on container ships, which is the most common type of ship used at the Port of Helsinki.

Without the flat rack, the items would need to be transported on project ships, which visit the port much less frequently.

Nurminen Logistics can handle the entire transport chain from transport to the terminal, loading on the flat rack, transport to the port and loading the flat rack on the ship. We also offer a variety of protective solutions and packaging services for shipments. For example, an item can be protected during sea transport by packaging it in a box, shrink wrap or a vacuumsealed package.

In addition to the Vuosaari terminal, Nurminen Logistics offers the flat rack service at Mussalo harbour in Kotka. s

board at its terminal in Vuosaari. The combined annual sales from the two contracts will be in excess of EUR 5 million. The paper and cardboard

handling volume in Vuosaari will be some 350,000 tonnes per year, equivalent to approximately 31,000 (TEU) containers. s

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Project logistics

J. Martikainen

Project logistics

Unerring project logistics In project logistics, no two days are the same.

Managing demanding and complex projects requires special expertise and effective interaction. In this section we take a look at delivering pulp mill equipment to Belarus.

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Project logistics

Nurminen Logistics Nurminen Logistics

Delivery to Svetlogorsk is, to date, the largest project handled by a Finnish logistics company with Belarus as the destination.

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O

ver 450 loads, some 25,000 cubic metres of goods to be delivered, approximately 30 loading points around the world and Belarus as the destination – delivering pulp mill equipment to Svetlogorsk for a Chinese customer of the mechanical engineering group Andritz is a great example of leading-edge project logistics. Andritz chose its partner Nurminen Logistics to handle project’s transport logistics. The deliveries for the Svetlogorsk project began in May 2013.

For a major mechanical engineering group like Andritz, the project in itself is fairly ordinary, but Belarus as a destination is new. In recent years, Belarus has invested in the development of its industry and infrastructure, making it a more attractive market for investment. Nurminen Logistics’ project delivery to Svetlogorsk is, to date, the largest project handled by a Finnish logistics company with Belarus as the destination.

– There has been a great deal of development in Belarus and there are many projects of various kinds currently underway there. It is definitely not a backwater, says Procurement Manager Satu Aronen, who is responsible for logistics at Andritz Oy. By the beginning of October, onethird of the project loads had already been delivered to the site of the pulp mill. At the request of the customer, all deliveries are made by road. With the railroads in the area of the pulp mill having three different owners, managing rail transport would have been more complicated than road transport. Approximately one third of the total of over 450 loads transported are extra-wide, extra-high or heavy loads requiring special road transport.

Consignments for the Svetlogorsk project are loaded in approximately 30

locations around the world, mainly in Finland, Sweden, Hungary and Austria. There are also smaller consignments dispatched from several other European countries. The most distant loading locations are in the USA. The transport routes have been optimised and goods travel to Belarus mainly via different Nurminen Logistics’ operating locations in Finland and the Baltic countries. The total value of logistics in this large project is in excess of EUR 2 million.

No price on the flow of information Traffic Operator Harri Autio is in charge of the project at Nurminen Logistics. He is assisted by the company’s Hamina office, led by Section Manager Miia Sakki. The Hamina office prepares the majority of the transport documentation for the project and manages project documentation between the customer, Nurminen Logistics and the recipient of the goods. Nurminen Logistics’ forwarders also provide consultation to the customer on customs issues. Harri is responsible for the overall management of the project and ensuring that the customer is satisfied with the logistics, project management as well as communication. When it comes to project management, Andritz values expertise and honesty.

– Logistics project management plays a very significant role in the success of a project. When the price of a logistics project is calculated, the quote specifies the cost of practically all components of the service, except for communication. Good communication is priceless. Without the effective mutual exchange of information, a logistics project is doomed to fail. It is important for us to be kept up to speed on everything that is going on in the project. Our Project Manager, Harri Autio, knows what he is talking about – he is a skilled communicator and always keeps us informed. We have

Project logistics

Eyes on Belarus?

Population: 9.6 million Area: 207,600 km² Capital: Minsk Currency: Belarusian ruble (BYR) Ethnic groups: 78% Belarusians, 13% Russians, 4% Poles, 3% Ukrainians Major trading partners: Export: Russia, EU, Ukraine, China, Poland Import: Russia, Germany, China, USA.

J. Martikainen

Belarus declared independence in 1991. The Belarusian economy is still largely based on five-year plans, which means that the focus areas of the national economy are known in advance. The Belarusian mechanical engineering industry is known for Belarus tractors, Maz trucks and Gomselmash grain harvesting combines. The country has formed a customs union with Russia and Kazakhstan, but it is still in the early stages of WTO negotiations. There are several Free Economic Zones where companies are granted tax breaks.

The Belarusian export industry is based on machinery and equipment, minerals, chemicals, textiles, metals and food.

The country is dependent on imported oil and gas and has selected alternative energy sources such as peat as the target of development measures. Further investments are needed to improve the country’s electricity infrastructure, boost the efficiency of primary agricultural production and develop industry for the secondary processing of agricultural produce.

The Belarusian government manages, controls and finances many investment projects. At the same time, the country is faced with the challenge of privatising large industrial producers to improve efficiency.

The iron grip of the state also has a positive effect on certain aspects, such as crime rates.

Products produced in Belarus are easy to transport to Central and East European countries, and the Russian market in particular. s

Source: www.sarus.fi

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Project logistics

Projects always involve large and complicated sets of issues to be managed, major decisions and substantial amounts of money.

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been very pleased with that aspect of the project, Aronen says.

There are many things that can go wrong in a large and complicated project. The most significant challenges facing a project supplier involve things not going quite as planned.

– The important thing for us is how our logistics partner resolves the problems as they arise. Every piece of equipment we manufacture is customised to a customer’s specific requirements and used as a component in a specific set of machinery. The equipment can take several months to manufacture.

They simply must be delivered in perfect condition and in a timely manner.

Late deliveries and other failures can become very costly, Aronen points out.

According to Satu Aronen, the greatest challenges related to the logistics of the Svetlogorsk project are the project’s

working languages and communication with their customer.

– Our customer is a Chinese company and the project is delivered to Belarus. This means that our working languages with the customer are Chinese and Russian, Aronen explains.

Single partner principle Andritz chooses its logistics partner for major projects on two primary criteria: a single provider must be able to deliver a comprehensive solution and the partner must be one that the company has worked with before. Projects always involve large and complicated sets of issues to be managed, major decisions and substantial amounts of money.

– We prefer to work with a single partner on the logistics of major projects. This way, a single provider

Project logistics

Nurminen Logistics

J. Martikainen

is responsible to us for the success of the entire logistics project. We are not interested in long subcontracting chains. Instead, we value partners who have the capacity to provide transport services through their own operating locations around the world.

In large and complicated projects like the Svetlogorsk delivery, there are no practice runs or dress rehearsals.

Everything must go right the first time. We also look to engage in the long-term development of our cooperation with our logistics partners, Aronen adds.

Nurminen Logistics is pleased that the company’s ability to deliver large and demanding projects for customers that operate internationally has been recognised, with Andritz again choosing the company as its logistics partner for a major project delivery.

– Belarus is a familiar operating area for us: we have delivered largescale special transports there before via the ports in the Baltic countries, for instance. Effective management of the entire process from load planning to reporting generates both efficiency in deliveries themselves and cost savings for our customers as load sizes and consignments can be optimised in the best possible manner. The Svetlogorsk project requires exactly the type of special expertise in which Nurminen Logistics is at its best, says Hannu Vuorinen, Senior Vice President for Project and Special Transport at Nurminen Logistics.

The last deliveries for the Svetlogorsk project are scheduled for August 2014. Turn to the centre spread of this issue to read more about the project. s

It takes a team A successful logistics project requires a team of genuine professionals in their field. The project team for the Svetlogorsk project had its first meeting at Nurminen Logistics’ office in Vuosaari in April. The team behind the project includes: Miia Sakki (Nurminen Logistics) (back left), Satu Aronen, Harri Autio (Nurminen Logistics), Timo Niemi (Nurminen Logistics), Christian Gutmeyer, Arja Rantanen, Ammi Stemberg (bottom left), Nina Rönkkö, Kirsi Sutela, Martina Klöckl and Jaana Siippainen. s

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Pieces in place The transport logistics for a major project are trouble-free when a single reliable service provider handles not only the transportation of the goods, but also freight forwarding, documentation and warehousing. Nurminen Logistics takes responsibility for the entire transport project, allowing the customer to avoid the complicated and time-consuming work of managing the many different pieces. The following spread provides a detailed look at the collection of project loads for Andritz’s delivery of a pulp mill to Belarus.

The Svetlogorsk project

Unerring project logistics Nurminen Logistics always tailors its project services according to each customer’s individual needs and is able to offer an entire supply chain from beginning to end using mainly its own equipment and its own terminals. Nurminen Logistics also handles import and export customs clearance services, which include all documentation services related to transport and international trade.

• Turn-key delivery of pulp mill equipment to Svetlogorsk, Belarus • Total value of project logistics in excess of EUR 2 million • In addition to transport, Nurminen Logistics handles the overall management of the project’s transport logistics

US Vietnam

Own equipment and terminals Nurminen Logistics projects move on trailers, railway wagons and ships. The company’s road fleet consists of more than a dozen lorries and nearly 40 special transport platforms with a maximum carrying capacity of 450 tonnes.

The longest platforms measure 44 metres.

• The majority of the transport documentation for the project is prepared at Nurminen Logistics’ Hamina office

Norway

• Project deliveries began in May 2013 • Over 450 loads, approximately one third of which require special road transport

United Kingdom

• The most distant loading locations are in the USA and Vietnam

• Containers are shipped via Nurminen Logistics’ office in Klaipėda, Lithuania • Project deliveries are scheduled for completion in August 2014.

Nurminen Logistics’ terminals are located at Finland’s most important eastern border crossings, as well as at the Vuosaari, Kotka, and Hamina harbours. A terminal network of more than 130,000 square metres facilitates the intermediate storage of projects in the best logistical locations.

Netherlands Estonia Latvia

Normal transport

Germany

In addition to its own equipment, Nurminen Logistics has at its disposal a diverse array of equipment from its broad partner network.

Lithuania

All services from one counter

• Normal loads are transported from Finland to Belarus primarily through Russia • Normal loads from elsewhere in Europe are transported through Poland and the Baltic countries, as are loads requiring special transport

Russia

Denmark

• Total goods volume approx.

25,000 m3 • Consignments loaded in approximately 30 locations around the world, mainly in Finland, Sweden, Hungary and Austria

Finland

Sweden

Nurminen Logistics’ own rail fleet consists of 1,000 wagons.

They move quickly and safely from Finland to the east. The customer can track wagon project progress through the Nurminen Logistics extranet or receive daily information about the cars from their contact person at the company.

Poland

Czech Republic

Svetlogorsk

Austria

Belarus Slovakia

Slovenia

Ukraine Hungary

Special transport

Project planning with the customer can begin even before the production of the items has begun. Early optimisation of load sizes before the upcoming transport operation brings savings in both time and money. Nurminen Logistics’ staff make all of their expertise available to the customer even at the tendering stage.

Nurminen Logistics provides comprehensive project services through a single contact point. Several different modes of transportation can be used in one project transport operation. A wide partner network ensures that the size of the product to be transported or the distance of the destination is never a problem. Thanks to reliable logistics, transport distances and times can be shortened.

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On the job

Nurminen Logistics

Hotshot salesman from Tallinn

1

Nurminen Logistics Sales Manager, Dmitriy Hmara, works in an open plan office with nine colleagues in a modern office building near Tallinn city centre. This is the operations base for Nurminen Logistics’ Estonian subsidiary, Nurminen Maritime Estonia. The Estonian office’s customers include both forwarding businesses and direct clients. Goods are

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transited through Estonia via Nurminen Logistics to Russia and other CIS countries.

2

In addition to Dmitriy, there are two junior sales representatives in the Estonian sales department. While the more experienced Dmitriy still directs and instructs them at present, in the

future all three will perform full-fledged sales work independently. Dmitriy is responsible for the largest customers of Nurminen Logistics’ Estonian office.

In addition to ensuring the continued satisfaction of key accounts, he is also actively involved in new customer acquisition. Dmitriy emphasises the role of experience in successful sales work. In a small work community, the

On the job

FACT BOX Sales Manager Dmitriy Hmara • works at Nurminen Logistics’ Estonian office • has been with the company for six years • 32 years of age • a business school graduate who lived in London for five years • breeds pedigree cats as a hobby.

sales personnel manage the complete process from pricing to the monitoring of operations. Dmitriy says it is essential for a salesperson to be thoroughly familiar with the entire production process.

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Dmitriy says the business of logistics is constantly changing and logistics companies must continuously find and develop new ways of working.

According to him, one of Estonia’s strengths is rapid digital development, which also extends to the logistics industry. Nurminen Logistics currently

provides an increasing number of electronic services to its customers. In terms of digital development, Estonia is ahead of its Baltic neighbours of Latvia and Lithuania.

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Dmitriy gets the most satisfaction from his job when he signs a cooperation agreement with a customer after working on it for a long time, or when an occasional customer becomes a regular one. Much of his time is spent in meetings with customers. At present, the majority of the Estonian office’s

customers are located in Russia and other CIS countries, but Dmitriy also has plans to acquire customers in other European countries.

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Dmitriy says a sales manager must be ambitious, ­determined and results-­ oriented. The willingness and ability to work effectively in a digital world is also important. On top of that, you need to have a high tolerance for stress and be prepared for highspeed work in constantly changing situations. s

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photos: Veikko Somerpuro

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Charging the batteries

FACT BOX • Nuffield–Leyland Club Finland is the Finnish association for tractor enthusiasts • The club’s mission is to preserve and record the history of Nuffield and Leyland tractors and related agricultural machinery • Over 460 members across Finland • Participates in summer events and exhibitions, organises club trips • Provides detailed information on fixing up tractors.

Charging the batteries

Alpo collects old tractors Nurminen Logistics terminal worker Alpo Kekkonen spends his free time fixing up vintage tractors. The highlights of his summers are visiting events and exhibitions with the tractor club to see what other tractor enthusiasts have been working on – together with his wife of course.

How many tractors do you have?

Right now I own four tractors: A 1963 Nuffield 4/60, a 1971 Leyland 384, a 1987 Ford and a 1960 Nuffield Universal Four. So my oldest tractor is from 1960 and the newest from 1987.

How did your tractor hobby get started?

My grandfather bought Nuffield tractor in 1970. I was not even born then but that tractor, 1963 Nuffield 4/60, to this day remains the tractor that holds the most sentimental value for me. It was our only tractor at the time, so it was used for everything around the farm. Since then, we’ve added a few more tractors.

How much of your time does the tractor hobby take?

It takes all my free time. With tractors there’s always something to work on. Mind you, it’s not an exclusively solitary activity, as there is a big social element to the hobby as well. I am an active member of Nuffield-Leyland Club Finland. It is an association for Finnish Nuffield and Leyland tractor enthusiasts.

I was previously the Chairman of

the club’s Board of Directors, and I am still an alternate member on the Board. The club participates in various events across the country, such as tractor exhibitions, as well as organises club trips. This year, the club trip was to the UK to attend the world’s largest event for old steam engines, the Great Dorset Steam Fair.

What does your family say about you spending all your free time working on tractors?

My wife is actually into this hobby as well. Her involvement began when I took her to the club’s annual meeting one year. We now go to all the events together. She leaves the fixing up of the tractors to me though. For her, it’s more of a social hobby.

Are all your tractors in running order?

Three of my four tractors are fully operational right now. We make good use of the tractors. They don’t just sit in the garage gathering dust.

We use the Nuffield 4/60 to run a log splitter to make firewood. We use the Leyland to transport wood and the Ford for ploughing snow in the winter. The Nuffield Universal Four, which I originally bought from a neighbour, is the only one in my collection that is not currently in good running order. The engine block broke down and I decided to fix it in the winter, when I have more time on my hands. I already have some of the spare parts prepared. Being part of the tractor club proved useful again as the Chairman happened to have a spare engine block that he gave me.

Where did you learn to fix up tractors?

I have no formal education in any of it. I’ve learned everything by doing it myself. With old machines like these, everything is completely mechanical so you can fix anything yourself as long as you have the necessary spare parts. Used spare parts are often available through the club. The club website has a bulletin board, which is my first avenue for finding the parts I need. The members also use the bulletin board to share technical tips.

Will your collection of tractors grow in the future?

Absolutely, if the right one comes along. I bought the Leyland mainly because the price was very good.

It was also sort of a 30th birthday present for myself. To be frank, it was a piece of junk when I bought it.

I have completely fixed it up though: I replaced the electrical system, did an engine overhaul and changed the tyres. s

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New tasks

Fedor takes charge of railway operations Veikko Somerpuro

Fedor Larionov Senior Vice President, Railway Logistics, St. Petersburg

You joined Nurminen Logistics in July as the head of the Railway Logistics business unit and a member of the Executive Board. Where did you work prior to joining the company?

Most recently, I was the Director of the St. Petersburg branch of Daher CIS, a subsidiary of the France-based Daher Group. The company specialises in various industrial projects, such as the transport and import of equipment for the energy industry. Prior to Daher, I worked for Eurosib.

What made you choose Nurminen Logistics?

I’ve been familiar with Nurminen Logistics as a company for some 15 years. The company I was with back then worked closely together with Huolintakeskus on wagon operations, and Huolintakeskus was subsequently acquired by Nurminen Logistics. My interest was piqued as soon as I found out about the opportunity to join Nurminen Logistics. Nurminen is one of the few foreign corporations in Russia that doesn’t just see the Russian market as one of great potential, but is also prepared to invest in it.

How is working with your Finnish colleagues going so far?

Despite the cultural differences, Finns and Russians have a fairly similar way of thinking. In some of my previous jobs, it took up to six months to get settled and

Nurminen News 2/2013

begin to understand my colleagues, but at Nurminen Logistics we have been on the same wavelength since day one. The only real challenge in the collaboration between Finnish and Russian colleagues is the lack of a common language. In St. Petersburg, we need to pay more attention to English language skills in recruiting new employees as well as encouraging existing employees

to place greater focus on improving their English skills. We should use phone calls instead of emails to improve our language skills faster.

How will Nurminen Logistics’ operations be developed in Russia?

I see our service offering in Russia increasing in the future. We want to provide a growing range of diverse

New tasks

Nurminen Logistics

Elena Balashova

You have worked at Nurminen Logistics for six months now. Have you been well received by the work community?

I have been very well received indeed, and I am very fond of my colleagues. We are all good friends outside the office as well. I know I can ask anyone for help at any time, and that help is always forthcoming.

Sales, Tallinn

You previously worked in an entirely different field. What do you find interesting in the logistics industry?

I have no prior experience of the logistics industry, but I have always been interested in it. I have a lot of friends who work in logistics. They kept talking about how interesting the industry is, so I decided to find out for myself. So far I have had no regrets. I hope I can be very useful to Nurminen Logistics in the future.

Nurminen Logistics

Sofja Tirman

Sales, Tallinn

You work in sales. What are your duties?

My duties involve actively selling our services, finding new customers and managing our customer relationships.

In addition to sales work, I also participate in the production process by planning transport services, such as choosing optimal routes and modes of transport in cooperation with our partners. I also handle invoicing.

services to our current and future customers. Special transport and project services, in particular, are in high demand in Russia at present. The market is stable and growing at 10–15% per year. There is also increasing interest in outsourcing logistics operations in Russia, although few companies have done it thus far. We want to be a pioneer in the market, offering our customers a broad range of high-quality services and solutions.

V.Somerpuro

You are a new recruit at Nurminen Logistics. How has your career with the company begun and what are your first impressions?

I’ve just completed my first month at Nurminen Logistics, working in sales. My duties involve new customer acquisition.

I am still learning the job and every day I come across something new and interesting. Our team has a wealth of experience and expertise. I want to reach the same high level as my colleagues, but that will take a lot of time and work.

Jana Korobtchenko Communications Assistant, Vuosaari This is your first job in communications. How do you feel it is going so far?

That’s right, I just finished university last spring with a degree in marketing. Despite majoring in marketing, working in communications feels like a natural fit for me. Of course, communications and marketing are different, but you can also see communications as one element of marketing. Also, at Nurminen Logistics the communications department handles many duties that might be the responsibility of the marketing department in another company. For example, designing brochures and preparing for trade fairs are duties that are quite clearly in the realm of marketing.

Your new job required you to move from Turku to Helsinki.

How do you like living in the capital?

I had been considering moving to Helsinki for quite some time.

Last spring, I mainly applied for jobs in the Helsinki area. I really enjoy living here. Many of my friends from university have also moved to Helsinki recently, which has made it easier for us all to settle in and get to know the city. I like having a bit of a buzz around me, and Helsinki has that in abundance. s

What is your view of the future of the railway logistics business in the Russian market?

Russia is a large country and railways are the most important mode of transport. Nurminen Logistics’ strategy is based on targeting a certain wagon type, which I see as a very good approach.

In recent times, the Russian market has been characterised by various price pressures and weaker demand due to the general economic situation.

Nevertheless, I am confident that we can achieve the results we want through active and effective sales work.

How do you spend your free time?

I get a lot of exercise. I find that it’s the best way to unwind and clear your head after a day at work. I am particularly fond of cycling. My other hobby is painting. I like to emulate impressionist paintings, as I find their colours absolutely fascinating. s

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photos: Ruslan Shamukov

In the same boat

22

In the same boat

At Russia’s gate to the West Year after year, Finnish businesses engaged in trade with Russia are challenged by one aspect more than anything else: customs. Yuriy Leontiev, Director of OOO Telk, has worked in the logistics industry and with customs for nearly two decades. He says the problem isn’t so much that customs practices are illogical or unpredictable, but rather that foreign businesses are not sufficiently informed on how the Federal Customs Service of Russia operates.

V

yborg has traditionally been Russia’s gate to the West. The border is a source of livelihood for the city’s residents. There are still nearly 1,500 people working at Vyborg customs, an area that stretches from Vyborg to Svetogorsk.

With such a large number of customs workers, any challenges related to customs are unlikely to be caused by a shortage of personnel. Perhaps it is more of a question of Finnish businesses thinking that anything that works differently from the way it does in our neck of the woods is bad?

Yuriy Leontiev admits that Russian customs practices may involve certain special national characteristics, and the customs organisation may be somewhat sluggish, but despite its weaknesses, the Federal Customs Service is an important authority that performs its job well.

– People often think that having to deal with the Federal Customs Service is pure madness. That’s simply not true. The customs process is neutral and unbiased in Russia. You have to keep in mind that the Federal

Yuriy Leontiev is the Director of Vyborg-based customs forwarding company OOO Telk.

Customs Service has only existed in its current form for just over 20 years.

That’s not very long. The Russian customs system changed after the fall of the Soviet Union. During perestroika, the Russian customs system was modelled after European systems, including that of Germany. The system is effective, but Russia is a very large country, and from a customs perspective it is quite different from Finland, for example. The majority of the goods shipped in Finland are transit goods, but in the Russia situation is different as most import goods are for the end users. This explains why the customs regulations regarding these shipments are stricter than they are for transit countries.

Leontiev emphasises that each country has, and should have, a system that protects its economic interests. One such interest is the competitiveness of domestic products compared to imported goods.

Leontiev says it is perfectly normal for Russia to protect its domestic production base. He also points out that the Russian government should also ensure that supporting domestic production does not compromise the right of Russian consumers to have access to cheaper and more competitive products in the market.

– In Russia, the majority of the state budget comes from taxes, and nearly half of it comes from customs duties. In other words, the Customs Service is an extremely important source of revenue for the state. This revenue does not, however, come from customs duties on imported goods, but rather the export of energy resources.

The Federal Customs Service used to boast that it generated over 50% of the state budget. Exporting energy resources is, however, somewhat shortsighted. Russia should develop its domestic production base and manage its budget with the help of the funds collected that way, Leontiev says.

Winds of change in customs forwarding Yuriy Leontiev left the state-owned customs forwarding company Rostek in 2012 and started OOO Telk. Rostek has been the largest player in the Russian customs market since 1992.

It was established by the Federal Customs Service, which owns 100% of the company. The Group has a head office in Moscow, 13 branches as well as 35 closed and open limited companies around the country, with some 6,000 employees in total. In 2012, Vladimir Putin set the ball rolling for the discontinuation of

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In the same boat

Rostek’s operations by stating that a state-owned company, such as the Federal Customs Service, cannot have for-profit subsidiaries.

– Russia is actively changing customs forwarding companies from customs-linked operators to purely commercial corporations. Establishing a customs forwarding company has always been possible, but it has meant competing with a strong stateowned operator. The government now plans to remove from the customs market all companies that have links to the state. In my opinion, this is the only way to do it. Fair competition is essential, Leontiev says.

Much debate about TIR Yuriy Leontiev’s telephone is constantly ringing as customers bombard him with questions regarding the upcoming changes related to TIR carnets. On 5 July, the Federal Customs Service announced its decision to terminate its agreement with ASMAP, the Association of Road Carriers, which recognised TIR carnets as guarantees of customs payments.

The termination is due to unpaid customs duties and it will take effect on 1 December. Under the TIR system, guarantees of customs payments for both domestic and foreign transport companies are handled by national transport associations in each country. According to the Federal Customs Service, as of 1 June ASMAP had customs debts in excess of RUB 20 billion due to TIR carnet infringements. The Federal Customs Service stated that it will require additional guarantees for TIR shipments to ensure that customs duties are paid.

– Russia wants to discontinue TIR carnet transport in the Russian market and replace it with its own transit declaration methods. I believe this to be a political move that has been decided at government level.

Nurminen News 2/2013

The Federal Customs Service would not have taken such a step without a mandate from the government. It seems that Russia wants the income from TIR carnets to remain in the country instead of having them be collected by a Swiss organisation.

After the change takes effect, international transit declarations in Russia must always include a guarantee that the Federal Customs Service can collect directly from the guarantor’s account if the shipment does not reach its destination. With the Federal Customs Service having direct access to guarantees, the problem of overdue debts will be automatically eliminated. Transport providers may seek a refund through legal avenues, but in practice the funds will already be held by the state at that point, Leontiev explains.

The TIR agreement was signed in 1975, and some of its provisions are hopelessly outdated. Nevertheless, it is an international agreement that is binding on its signatories.

However, the more recent customs regulations of the Customs Union of Russia, Belarus and Kazakhstan are in conflict with certain provisions of the TIR agreement related to transit declarations.

– The truth is that legislation at national level stands little chance of competing with international agreements. Had the Russian authorities gone about it the right way, they would have examined the TIR agreement’s provisions pertaining to its termination or annulment, and acted accordingly. That was not, however, what our officials decided to do. In the words of former Prime Minister Viktor Chernomyrdin: “We wanted the best, but it turned out as always,” Leonchev says.

Changes to take effect in December After 1 December 2013, which is when the change takes effect, the TIR carnet system at the Russian border will be closed and replaced by new Russian transit declaration documentation. Logistics providers are powerless against the situation, as there are no available options other than purchasing the required additional guarantees.

– Russia’s own transit declarations obtained at the border are likely to be substantially more expensive than TIR carnets. The operations are monopolised and there is strict criteria for which organisations are

In the same boat

Fact box Yuriy Leontiev • Director of customs forwarding company OOO Telk • Academic background: engineering and economics • Previously worked for Rostek • Born in St. Petersburg, has lived in Vyborg for over 20 years • Worked as a professional fisherman after graduation • Hobbies: work and travel.

allowed to issue additional guarantees. In practice, Rostek and the insurance company Arsenal are the only operators that meet the criteria.

With Rostek’s future hanging in the balance, you could almost say that Arsenal has a monopoly over the guarantees, Leontiev explains.

After 1 December, logistics companies have a few different alternatives to satisfy the new guarantee requirements: they can register in a customs transport registry maintained by the Federal Customs Service of Russia, obtain a general transit declaration permit from customs, or purchase additional guarantees from Rostek or Arsenal. Registration in the customs registry and the general transit declaration permit both require the applicant to be permanently domiciled in Russia.

Registration also requires the applicant to pass a background check, which involves examining whether the company has unpaid on-the-spot fines payable to Russian customs.

On-the-spot fines are easily and frequently handed out by the customs.

A general transit declaration permit requires a bank guarantee or cash security and must be applied for with the Federal Customs Service through a complicated procedure.

In addition to the general transit declaration permit, each individual transport unit is also required to have a certificate of guarantee to be allowed on Russian roads. Customs forwarders such as OOO Telk provide assistance with this process. For OOO Telk, the TIR change presents a potentially lucrative business opportunity. As a private individual, Yuriy Leontiev sees the matter somewhat differently.

– The benefit of the new system is that the proceeds from transit declarations will now remain in Russia.

However, it will make road transport more expensive, which will inevitably be reflected in higher consumer prices. Prices will rise and Russian consumers will have weaker purchasing power. It seems unavoidable that this will lead to inflation. The Russian government has fought inflation for a long time, but this move looks to undermine those efforts, Leontiev says.

Finally, we have to ask whether there is any truth in the stories of the wild Russian customs business, with massive amounts of money moving around and not much value on human life?

– In Russia, there was a period before 1917 and again in the early 1990s when everyone was aggressively seeking to accumulate capital. People were looking to make money by any means necessary. This also applied to customs in the early 1990s. The situation has balanced out since then, but of course there are some exceptions.

Today, most operators aim to operate in an honest and transparent fashion, as dishonesty tends to be more costly.

Perhaps someday, we in Russia will have a similar business culture to Finland. We have learned a lot from our Finnish friends. For that, I am grateful to them, Leontiev says and takes another call. s

Highlights

1

TIR, or Transports Internationaux Routiers, is an international customs transit system.

TIR shipments are transported under seal from the country of origin to the destination country without the standard customs formalities at borders. The practice speeds up international goods transport. The customs duties of transit countries along the way are replaced by an international guarantee.

2

Work on the TIR

transit declaration system began after the Second World War with the support of the United Nations Economic Commission for Europe (UNECE).

The first TIR agreement was signed in 1949 between a small number of European countries. The success of the provisional agreement led to negotiations on the TIR Convention, which was approved in 1959 by the UNECE Inland Transport Committee and entered into effect in 1960. The first TIR Convention was revised in 1975 to take into account the practical experiences of the system by that time as well as utilise technological developments and changed customs and transport regulations.

3

There are currently

68 signatories to the TIR system on four continents, including the EU. Over the past decade, some three million TIR carnet documents have been issued globally. s

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References

Nurminen Logistics

The US-based AGCO Group is the world’s third-largest manufacturer of agricultural equipment. Nurminen Logistics is a trusted logistics partner of Valtra, a subsidiary of the AGCO Group, when it comes to different projects since 2010. In its terminal in Vuosaari, Nurminen Logistics containerizes tractors that come by rail from the Valtra factory in Suolahti. From the terminal tractors are shipped to their destination countries. In June this year Nurminen shipped 48 tractors from Dalian, China to Kotka.

After further processing in few different locations in Finland, tractors will be shipped to their destinations, mainly to Russia. In June Nurminen Logistics also handled the forwarding and transport of 20 tractors from Dalian to Durban in South Africa.

“I am very satisfied with Nurminen Logistics’ services. The approach to containerization work has been flexible and professional even when schedules are tight. In addition to transport solutions, Nurminen Logistics has a great deal of expertise in global customs services.

Sami Pulli Dealer Central Manager Valtra/AGCO Group

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According to Nurminen “At the Vuosaari indoor rail terminal tractors were driven off the wagons, the rear wheels were removed and the front wheels were replaced by iron wheels for transport. As the height of the container’s doorway is lower than the inside of the container, the container had to be lifted to fit the tractor’s cabin inside. Purpose-built container lifting equipment was used for this purpose in containerization. This is how we operate: we develop tailored solutions to ensure that our customers’ valuable cargo gets to its destination safely and in perfect condition. In global operations it’s also extremely important to have reliable partners.” s Timo Niemi Key Account Manager, Nurminen Logistics

Read more references: www.nurminenlogistics.com

”” According to the client

Pavel Novozhilov and Larisa Zolotova from Nurminen Logistics’ St. Petersburg sales department, the latter of whom also makes an appearance in the video, are watching the shoot in the attic of a house in Helsinki.

Russian actor, Roman Hardikov, stars in the video as a man faced with the challenges of daily life.

Watch our videos!

Nurminen aims to achieve continued success by differentiating itself with excellent customer service and the ability to find creative logistics solutions when they are needed. Last spring, we shot six short videos starring the same people that deliver our services to you in real life. We wanted the videos to combine the day-to-day life of an ordinary person and the services of a B2B company. What was the result? See for yourself and give us your feedback on the videos in connection with voting for the best article on our website at www.nurminenlogistics.com.

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Nurminen Logistics provides high-quality logistics services, such as railway transports, terminal services, forwarding and special and heavy transports. The company has collected logistics know-how from three centuries, starting in 1886. Nurminen Logistics’ main market areas are Finland, the Baltic Sea region, Russia and other Eastern European countries. The company’s share is listed on NASDAQ OMX Helsinki.

Nurminen Logistics’ stakeholder magazine Editor-in-Chief: Laura Jokinen. Editor: Jana Korobtchenko. Editorial Board: Laura Jokinen, Jana Korobtchenko, Risto Holopainen, Fedor Larionov, Janne Lehtimäki and Hannu Vuorinen. Big cover photo: Jaakko Martikainen and other photos Nurminen Logistics. Centrefold graphics: Sebastian Söderlund.

Layout: Indicio Oy. Printed by Libris Oy. ISSN 1797-8963.

Head Office Satamakaari 24 FI-00980 Helsinki, Finland Tel. +358 10 545 00 Fax +358 10 545 2000 info@nurminenlogistics.com www.nurminenlogistics.com