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20.11.2019

Il Mondo dei Trasporti, № 284/Novembre. Interview with Alexey Grom, Chief executive officer UTLC ERA. China a huge growth potential

The Eurasian Economic Forum in Verona held at the end of October 2019, was entirely focused on the relationships between the EU and the Economic Eurasian Community. During the event, UTLC ERA – the service provider for container cargo shipping on China-Europe-China routes jointly founded by the Russian (RZhD), the Belarusian and the Kazakhstan Railway – met with potential partners and Italian customers. In particular, the Chief executive officer Alexey Grom, “the number one of the company” through an interview addressed several topics of interests of the logistics industry related to the transportation of goods through the Eurasian corridor among which the strategy carried out by UTLC ERA to establish itself in the Italian market.

Mr. Grom, what is UTLC ERA's strategy for entering the Italian container shipping market? Is it opening a representative office, finding a new partner, or something else? Alexei Grom: We do not have a certain strategy that would concentrate on Italian cargo owners only, neither on French, Swiss, or German alone. We have a strategy that can be applied to any cargo owner who is active in the Eurasian trade and intends to use all of the competitive advantages of the rail transportation. When we come to certain countries, we try to adjust our business model and technology to local conditions. We pay more attention to those strategic spheres and industrial domains which in our opinion are more likely to enter into trade relations with China. In the case of Italy, these domains food, cars, and the textile industry. I am not ruling out the possibility that some other options might come up the potential of which we do not know right now. It is clear that in that case we would be willing to both develop a specific strategy for Italy as a whole and for individual Italian cargo owners in particular.

What do you think about the Italian freight transportation industry concerning its development potential, problems, and risks? Alexei Grom: In my opinion, the potential of the Italian market is huge. I cannot image the contemporary world without Italian products ranging from food and textiles to automobiles. The biggest fashion labels are directly connected to Italy as well. Given the fact that China has entered the world‘s luxury market segment and has started to consume more and more high-quality products, the Italian transportation industry’s potential for growth is massive. We see that both Italian trucking companies and the manufacturers have started paying more attention to segments of the logistic services that include maximizing delivery speed, improving transportation safety, and digitizing the trucking process. We are ready and open to work and cooperate with our Italian partners to reach the highest level of quality. For the growth of the transportation volume, it is important to look into the potential of the Italian cargo connection from Italy to China and from China to Italy. I am sure that the growth potential of this branch is enormous, and that both transport companies and cargo owners would profit from its development.

What European countries and partners does UTLC ERA have special relations with? In terms of transport routes and transported cargo, which ones, in your opinion, play significant role for Italy? Alexei Grom: I hope to believe we have good relations to Europe as a whole. I don’t think the term „special” applies here. I would prefer to call the relations open, based on a partnership, and aiming to achieve mutual benefits. It is clear that on our route we first pass Poland and Germany, and only then enter other European countries. So, one could presume that particularly with those two countries we have built special relations. But that is not the right approach because if there are eight countries involved in your transportation route, it is impossible to single out one as more special or more important. We should all work together to generate this kind of service that would prevent any slowdown of the transportation speed or impair the service quality. Therefore, I believe the relations should be open and based on both partnership and trust. At the end of the day, we need to believe that we can reach a high level of sustainable development. Every time we meet, we should try to become closer to each other, learn more about each other, figure out concrete advantages and challenges to overcome, and make plans for the future.

What are the customer or industry categories to which UTLC ERA pays special attention in Italy? Alexey Grom: We devote our attention chiefly to companies of the so-called "expensive segment." This involves industrial equipment, automobile components, and machines. At the moment, we mainly transport less expensive goods such as textile, pulp and paper, and chemical industry products. Our job is to pay attention to clients who give us entire trains for transportation or potentially add an extra container to any such train. This approach defines the product value and allows the implementation of the strategic plan that aims to increase the transport volume to up to 1 million TEU. Whether it is the food, textiles, chemicals, automobiles, and heavy and light industry: The doors are open to all industries and customers in both Italy and Europe.

Are there any new partnerships planned with Italian cargo suppliers? Alexey Grom: As to contracts, we are always looking for new Italian partners and customers from different areas. In fact, our main partners are both transport companies and direct cargo owners. We are ready to build up open and transparent relations to gain more customers. Thus, we constantly improve our services like increasing delivery speed and reducing delivery costs. You can see it clearly from the volumes we were able to achieve in 2019. During the Eurasian Economic Forum that will take place in Verona at the end of October and will focus on the relationship between the EU and the Eurasian Economic Community, we plan to meet our potential partners and customers from Italy. We expect to sign memorandums that will lead to actual contracts and new traffic volumes. Therefore, our focus is on our customers and on closing deals with them as quickly as possible.

Does UTLC ERA have its own railway park and fitting platforms? Alexei Grom: To organize services, UTLC ERA manages the second largest park of fitting platforms for 1520 mm tracks. When it comes to managing this park, our approach is to combine more effective and efficient ways, whether it is rent, financial leasing or ownership. Right now, the railway park consists of more than four thousand wagons. We are managing this park on the basis of rent and financial leasing. I do not rule out that if the situation changes, we will start forming our own park. This will happen if we find it profitable or find ourselves able to reduce costs for our customers

Source: Il Mondo Die Trasporti, № 284, November 1st, 2019, print.

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