What does a Customer need to know about the services provided by TELS Group of Companies?

First, we aim to satisfy customer’s logistics needs in accordance with their priorities.

Second, we are always ready to show our “inner workings” and all the aces to demonstrate our advantages.

TELS Group of Companies focuses primarily on the possibilities of the Groupage Services Department.

• To recap, groupage cargo services imply:delivery of a small consignment at the most reasonable price,
• delivery of a small consignment as quickly as possible,
• establishment of stable deliveries of small consignments “just in time”,
• delivery of any consignment requiring handling (marking, repacking, etc.) in transit.

The advantages of Groupage Services Department, TELS Group of Companies are presented below.

1. 48 experts in groupage cargo transportation.

48 professionals working solely with consolidated cargoes using well-established business processes with high efficiency and quality standards is, perhaps, a unique phenomenon among the forwarding companies in our region. This speaks volumes of a large number of groupage cargo transportations and vast experience in the transportation sector. The volume of services provided by Groupage Services Department, TELS Group of Companies grows annually by approximately 20%.

2. Almost any type of consolidated cargo to any region of Russia and other countries of the EEU.

We transport different types of goods from twine to complex equipment, medications and chemical agents; we also offer temperature controlled and dangerous cargo transportations. We provide “door to door” deliveries. Cargoes sent to destination regions are consolidated by compatibility and similarity of transportation conditions.

3. Large variety of delivery schemes in accordance with customer’s priorities.

The customer can regulate the delivery time and costs – faster or cheaper. The task can be limited by:

a) money, logistics budget

b) delivery time

We select the best transportation scheme guided by the task set by the Customer.

Basic delivery schemes:

• A “classic” consolidated cargo option implies the delivery of goods with reloading at a consolidation warehouse, when a vehicle going from a load point to the destination carries goods for different Customers, and it is the cheapest option suitable for the customers ready to plan transportation during 7 – 14 days.
  

When the Customer gathers the so-called “mono-delivery” (the goods placed at a consolidation warehouse are loaded into a standard truck only for one Consignee), the delivery time is around 10 days.

• A combined option implies loading of goods into a light truck with reloading at a consolidation warehouse and further transportation as part of a consolidated consignment to consignee’s warehouse (or vice versa: as a consolidated consignment delivered to the warehouse and further transported by a light car to the consignee). The average option in terms of time and cost takes from 5 to 10 days.
• An option with an individual light truck implies the delivery of goods to one Customer from the load point to the destination. This is the most expensive, but also the fastest option of delivery by road (taking from 2 days depending on the region of Europe).
  

Note: a light truck is a good option for speedy delivery of a small consignment as work and rest time restrictions do not apply to vehicles less than 3.5 tons, so they can go without compulsory transit stops.

• The most urgent option implies delivery by air. As a rule, it’s the most expensive delivery method.
  

Anna Vazhnik, Sales Manager of Groupage Service Department, TELS Group of Companies:

“The advantage of our business processes is in our ability to satisfy almost any customer’s individual requirements: should they need car registration number before loading, we will provide this information; should they require only empty vehicles for loading, we will do that; should they ask to come for loading by a certain time or should they need to speed up/delay the arrival, we will do that, too. We will develop individual logistics solutions and ensure stable operation of the devised scheme for customer’s special cargoes and requirements.”

4. Warehouse storage and cargo handling before importing to the EEU territory.

We provide a wide range of warehouse services:

• FREE storage at a consolidation warehouse for an indefinite period,

• weighing

• inventory,

• repacking,

• labeling,

• photographing, etc.

We label with EAC marking and provide operating guides in Russian for large consignments of about tens of thousands of items in the shortest time.

Last but not least, we provide a variety of additional services, such as insurance, assistance in customs clearance, etc.

CALCULATE CARGO SHIPPING

A highly qualified logistics provider can bring partner’s products to the world market.

Manufacturing is developing rapidly in China. The number of enterprises producing goods that are already competing with global brands is growing there, but before the products enter the world market and become well known, they cost much less than similar advertised products. Pro-active businesses are looking for such manufacturers to use the products for their own needs, further sale on the market or to manufacture their own end products.

“The oats are cheap, but the boats...”

At the same time, Chinese manufacturers often work only on the domestic market and cannot export – they don’t have export licenses and product certificates required for buyers and carriers, the packaging does not meet transportation requirements, etc. For export customers, the situation is often as in the saying: “The oats are cheap, but the boats are expensive”. It is not only about costs, but also about working hours necessary to overcome all the obstacles, as well as the risks arising when building new partnerships and logistics chains.

As a result, someone simply refuses “cheap oats”, someone pays the price, and someone manages to reduce the costs twice. Logistic contractor’s expertise plays a key role in that.

Below is an example of how TELS specialists supported by expert’s tips of Andrej Lisovsky, Head of Railway Transportation Department, TELS Group of Companies, solve a similar task.

Case. Transporting LED-panels from China by railway

Task. The customer contacted TELS Group to import a large consignment of LED panels from China to the Republic of Belarus.

Conditions:

• the supplier in China is not an exporter – they don’t have export licenses and the required certificates, they cannot prepare export documentation for their products;
• the customer has never imported from China;
• the cargo is fragile and expensive.

Andrej Lisovsky: “This order was special because the customer had never imported anything from China to Belarus. At the same time, the products were quite expensive, about 370 thousand dollars for two containers of LED-panels for illumination in a business center. As the consignor was not a verified supplier and the customer imported such cargoes for the first time, the latter suggested that we should perform door-to-door transportation”.

The customer excluded air transportation option because of the high cost; sea transportation was too long and risky. The best option was the delivery by rail.

Andrej Lisovsky: "Railway transportation from China is 1.5-2 times more expensive than by sea, but if the cargo value and the contract price are big, the logistics expenses increase the production cost insignificantly. At the same time, the speed of transportation increases about 2 times. Safety of goods transported by railway is higher than by sea – besides unforeseen delays, the container ship may get into a storm and the cargo may fall from it. Such incidents are quite often, while running off the track is extremely rare.”

To simplify the process for the customer and minimize their participation in organizational processes, TELS contracted transportation by railway and acted as a consignee at the station.

Andrej Lisovsky: “When organizing railway transportation, we can act as a consignor or consignee. What advantages does it bring to the customer? They don’t need to sign a contract with the railway and participate in the transportation process (sign numerous documents, pay related expenses, receive cargo at the station), the cargo is delivered directly to customer’s warehouse.”

The problem with export licenses (the Chinese manufacturer did not have them) was solved by TELS’s agent in China that had the required license and acted as a consignor.

Andrej Lisovsky: "Documents (invoices, packing lists, certificates of origin, etc.) are usually prepared by the consignor, sometimes the customer, not a transport company, helps them. In our case, neither the supplier, nor the customer could do this. We prepared the certificate of origin and almost all the other documents ourselves – some documents were prepared for the consignor as templates to be filled in and signed, some documents required only customer’s and supplier’s signatures”.

The customer was especially concerned about cargo safety – the goods were fragile, and supplier’s ability to ensure quality loading and reliable securing of cargo in the container were put in question. So the customer asked TELS to organize the loading of the goods.

Andrej Lisovsky: “We calculated the option implying the delivery of products to the warehouse of our agent in China where they would be loaded into containers. This option meant unreasonable expenses. We offered the customer another option to pack the goods at supplier’s warehouse under the supervision of our surveyor.

On the whole, the Chinese pack well. (It is common that goods cannot be loaded back into the container after the inspection of the Russian customs.) We convinced the customer that we would ensure quality loading and the goods would arrive undamaged. Besides, the customer received a detailed photo report from the loading site.”

Results

The customer received the cargo on time and without damage.

Thus, the transportation allowed:

• the Chinese manufacturer to reach a new level of an exporter;
• the Belarusian importer supported by a logistics contractor to develop expertise in foreign trade relations with the PRC.

This case is a vivid example of how a logistics provider not only acted as a carrier, but also became a full-fledged partner in the development of commercial success of two enterprises and contributed to the growth of global trade.

Yulia Ivanova, Head of Heavy and Oversize Cargo Transportation Department, TELS Group of Companies

Transportation of heavy and oversize cargoes is one of the most complex types of transportation, where knowledge, experience and the ability to solve non-standard issues are especially important. Expert’s sixth sense is, by the way, very useful in such matters helping foresee different risks, but as the experience has proved the sixth sense works only when there is good professional education.

A customer transporting heavy and oversize cargoes should know certain things in order to reduce the likelihood of unexpected events or unplanned costs. Several tips on what a customer should know to reduce the risks of unexpected events and help the logistics contractor organize the transportation of oversize cargo better are given below.

1. Check the information about the cargo for consistency.

Cargo characteristics specified in technical documentation may not be true to life, especially if the equipment, units or devices have already been in operation, and could have been modernized this or that way. The cargo must be re-measured with all the “sheds”, “canopies” and other parts.

2. Check the cargo for “dual use” and hazard class.

The unit is likely to be classified as a “dangerous cargo” (ADR) if flammable or toxic process liquids have been used during its operation. It is assumed that these liquids remain partially in it and can create danger for people and the environment during transportation.

Sometimes customs authorities can qualify the cargo as “dual-use” (can be used for military purposes), which will also add complications and limitations to export procedures. This usually applies to all kinds of special vehicles, but the industrial equipment can also fall into this category. We recommend consulting experts in such case.

3. Prepare for the fact that the shortest path may not be applicable for cargo transportation.

Transportation of oversize and heavy cargoes is always special as it requires a detailed delivery scheme taking into account individual characteristics of the cargo. The heavier and the more non-standard the cargo is, the fewer:

• ports can accept and reload it;
• vehicles can carry it;
• roads can be used to carry it;
• bridges, overpasses and other road structures can be missed.

It usually takes more time than planned to develop the route. However, the more detailed the route is, the faster all the required permissions will be collected and the more exact transportation time will be.

One of the remarkable transportation cases in TELS is the delivery of three containers for liquid nitrogen storage from Poland to the oil refinery in Belarus. The dimensions of the objects were 33 m long, 3.17 m wide, 4.15 m high. The weight of one container was 104 tons.

After a detailed survey of the routes, we found out that 3 (!) preliminarily routes suitable for direct delivery from Poland to Belarus had to be excluded consistently as road construction works were held there at the time. Only the fourth route implying transit transportation via Ukraine was suitable for cargo delivery.

Further, it was necessary to obtain the required permits for transportation of oversize and heavy cargo, coordinate the schedule of cargo movement with road services and traffic police of three countries. Sometimes this process takes several months. Professional preparation of the documents to apply and the established business ties allowed to reduce the time – the transportation started in a little more than a month since the documents had been submitted for approval.

The car carrying the cargo was almost 5 meters high. A number of technological solutions had to be developed for successful transportation on individual parts of the road. In particular, light towers and traffic lights were dismantled several times with their subsequent reinstallation. The construction of transport platforms was changed temporarily in order to carry the cargo under one of the lowest bridges along the route.

***

There are still a lot of unique features and “pitfalls” to be taken into account by a logistics contractor, so the last tip is to trust the transportation of heavy and oversize cargo to an experienced and reliable partner.

For anyone interested, I suggest watching a video where the main characteristics of a reliable contractor transporting heavy and oversize cargoes are discussed.

To learn more about heavy and oversize cargo transportation, send a request to or contact with questions –

Yulia Ivanova, Head of Heavy and Oversize Cargo Transportation Department, TELS Group of Companies

Tel: +375-17-210-49-31 (ext. 1056)

Skype: Julia.ivanova20

E-mail: j.ivanova@telsgroup.by

The main goal of any tender is to get the most profitable price for the purchase of goods or services, that is, buy the subject of purchase of the required quality at the lowest price. Tender has always been used as a cost-cutting tool, and so far, the price remains the key factor in tender evaluation. Nevertheless, goal setting and tendering practices are changing.

How has the goal and tendering practices for procurement logistics changed in the last 3-5 years? How do customers’ requirements for bidders develop? The specialists of Tender Department, TELS Group of companies shared this with us.

Objectives of logistic tenders

“Old” objectives

Many customer companies still use the bidding tool to achieve “simple” goals while purchasing transport and logistic services (TLS):

1. Purchase of low freight rates. Tenders are held for each transportation direction. A pool of carriers-winners is formed at the end of the bidding session, and load volumes are distributed between them for the tender period. Thus, the companies are trying to minimise the logistics costs by optimising logistic processes.


2. Marketing research of the market. The company holds a tender not clearly intending to change the contractor. The customer receives information about market offers and checks the correspondence of prices offered by the current contractor to the market level by means of the tender. As a result, the contractor may eventually change.


3. Expansion of the pool of carriers. A broader “subs bench” of logistic contractors gives the companies more confidence in stable satisfaction of their logistics requirements.


4. Bargaining chip toward current contractors. It allows to show current contractors their willingness to change them unless they “try hard” and / or reduce the prices.

“New” objectives

According to TELS experts, there has been a distinct evolution of tender objectives by large and part of medium customers over the last five years. Some companies hold tenders to achieve the following goals:

1. Purchase the package of services for reasonable budget. In this case, the freight rate in each direction is no longer a key subject of bidding. The customer tries to create a reasonable budget for the package of services, including customs clearance, insurance, marking, etc.


2. Stabilise budgets for logistics. While bidding and coordinating contracts, the customer fixes contractor’s obligations, which allows to keep the logistic costs within rigid limits in unstable market conditions.


3. Optimise the number of contractors. Having many contractors is not profitable in terms of labour costs – many contracts, many contacts and much cooperation. It is better to have 4-5 contractors covering a wide range of services who can be interchanged easily in certain problem situations.

Obviously, the “new” objectives of logistic tenders represent a more advanced approach to optimisation of business logistics:

• working hours in logistic management are reduced;
  
• optimisation of logistic budgets is delegated to experts without paying for logistic consulting services;
  
• logistic costs are planned more accurately.
  

Changes in tender practices

The main changes in tender practices for procurement logistics:

1. The number of tender steps has increased. Tender Department of TELS Group of Companies had used two-step templates until the middle of 2016: the first step usually implied the exchange of all the necessary information as well as the presentation of requirements and proposals; and the second step implied the final bidding and the agreement of the conditions.
   

The current standard is a three-step tender consisting, as a rule, of:

• the questionnaire period when companies request information from a potential contractor to make the list of bidders;


• preliminary bidding when the participants receive the requirements and make proposals; 


• negotiations with the likely winners of the tender, final bidding and the agreement of the conditions. Each tender is different in detail and each company has i own tender practice, but such is the basic scheme for most TELS’s customers today.
  


2. Requirements for insurance coverage have grown. Three years ago, the limit of forwarder’s liability insurance to customers at the level of 0.75-1 million euros was sufficient for the absolute majority of customers. Two years ago, the limit of TELS’s liability insurance to customers increased to 2.5 million euros to be able to tender for contracts with attractive customers. And so far, there have already been cases when the level was lower than required – the customers claimed a 5-million limit of liability insurance twice and a 10-million limit – once.


3. The requirements for information integration are strengthened. Electronic document management (EDM) is increasingly becoming an exacting requirement for the contractor. Such compulsory conditions emerged in tenders in 2016 requiring at first considerable efforts to customise information exchange system individually. Today, it is rather a technical issue not hindering customer relations, although any information exchange remains a project of individual integration with customer’s information system.


4. Tender periods are increasing. So far, a one-year tender period is considered “standard” for large companies purchasing comprehensive services, although some of them ask to provide the same rates for the second year aiming to reduce the frequency of tenders. Tenders for longer periods are becoming more and more frequent. This is especially popular with car manufacturers who have repeatedly organized tenders for a three-year period. In our market environment, it is often necessary to revise the rates during long contracted periods.


5. Expectations to have direct access to online tracking of cargo grow. Customer’s desire to have direct access to carrier’s GPS-navigation system to track their cargo is not a strict requirement yet, but such additional conditions are more and more often. When it is not possible, customers usually agree to access contactor’s information system to monitor the passage of cargo through checkpoints.

Markets also have their own peculiarities. For instance, it is important to have a Kazakhstan-based contractor for customers from Kazakhstan. They often ask for detailed lists of all the carriers who will be involved in the transportation of their goods, almost with car numbers and drivers’ names. It’s actually impossible for forwarding companies to provide such information months ahead since they work with a great number of transport companies with a large aggregate fleet of vehicles (TELS has about 120 thousand cars). Determining the driver and the car involved in transportation of goods 3-6 months ahead is something beyond freight forwarders’ practice.

Risks and opportunities for tender cooperation

The main benefits and risks of tender cooperation for freight forwarding companies are clear – along with load volumes obtained for the tender period they run the risk of reducing the planned profit due to the growth of carriers’ freight rates. Although it can be the other way around.

Strategic partnership for the customer and contractor implies mutual understanding of each other’s interests and preference of long-term relationships to “here-and-now” profit. If freight rates hover around 10-15%, the conditions are usually not revised as the parties build the risks in their budgets. The proposal to revise the rates changing significantly (20-30%) is considered appropriate. Such large price fluctuations are rare, although the most recent case dates back to the first half of 2017 against the growing freight market and the shortage of transport capacity.

Another risk is the shift of load volume “peak” periods, which has not been initially planned by a company-customer or about which they have not informed the contractor during the bidding. Freight rates are naturally much higher in peak seasons than the average annual rates included in tender agreements. It is more difficult to fulfill the obligations in such circumstances (with less carrying capacity available on the market) and the transportation margins decrease significantly down to negative. It is difficult to insure against such situations, so each case is handled individually.

***

The general conclusion is that tender as a cost-cutting tool has wide capabilities for achieving various objectives, but TELS experts recommend the customers of logistic services to use tender practice for comprehensive optimisation of business logistics using contractor’s knowledge and expertise.