First Cargo Company: Progress and Problems
31.07.2008 (11:06)
First Cargo Company OJSC accelerates rate of work, purchases rolling stock and summarizes results of the first half of the year. Salman Babaev, General Director of the company, tells about it in his interview to IA “RZD-Partner.Ru”.
– Mr.Babaev, could you tell about structure of the cargoes carried by the company? What are the results of transportation in six months of 2008? What about positive tendencies of the first half of the year?
– In the first half of 2008 the volume of First Cargo Company OJSC transportation exceeded 31.2 mln tons. Our company transported 10.3 mln tons of oil cargoes, 8.7 mln tons of coal, 6.7 mln tons of cement, 2.1 mln tons of construction materials, 1.7 mln tons of ore and 0.6 mln tons of non-ferrous metals. The volume of other transported cargoes amounts to 1.2 mln tons.
As to positive results of the half year, I can mention client base increase, professional management formation and establishment of the regional network which includes 14 branches in Russia and one representative office in Ukraine. Despite competition with private companies, First Cargo Company OJSC concluded several important contracts with Russian largest industrial enterprises: LUKOIL, Rosneft, TNK-BP, Mechel, Severstal, Kuzbassrazrezugol, SUEK, Evrocement, Inteko etc.
– What is the share of First Cargo Company OJSC in the total volume of most important cargoes carried along Russian Railways network?
– The share of coal transported by the company amounts to 5.2%, cement – 30.7%, oil cargoes – 8.2%, ore – 2.1%, construction materials – 1.7% and ferrous metals – 1.1%.
– Could you tell about the company’s plans on increasing its influence in high profitable freight transportation sector?
– The volume of the first class cargoes amounted to 66.7% from the total volume of transportation, second class cargoes – 29.9%, third class cargoes – 3.4%. We plan to decrease the share of first class cargoes and increase the volume of second and third classes.
– What is the ratio of export and import?
– The volume of internal transportation amounted to 21.1 mln tons, export – 9.5 mln tons, import – 0.5 mln tons and transit – 0.1 mln tons.
– Did you execute plans on rolling stock purchasing?
– Nowadays, we purchase new rolling stock according to the approved business plan. In the first half of the year we concluded contracts on 2,000 cement hoppers, 3,500 railcars for oil transportation, 4,000 gondola cars and 1,000 covered wagons. We received 2,700 wagons and put them into operation.
We carry on negotiations with Uralvagonzavod to conclude the four-year contract. 20,000 gondola cars, 2,000 oil cars and hoppers may be supplied according to this contract.
– What are the problems which the company faced?
– We can’t shirk difficulties on the development stage. There are no companies which control such a large park as ours. The First Cargo Company OJSC develops fast and we purpose to create an effective system of wagons management.
One of the main problems which all operators face including us is the constant growth of prices for rolling stock. For example, in April-June prices on wagons for cement transportation increased by 24%, on gondola cars – by 27%, it also concerns other types of wagons. We had to increase prices for our services to cover costs on rolling stock.
Interviewed by Tatyana Ovcharova
Print version
Russia is on track to import advanced technical approaches. It creates conditions to adopt engineering innovations as quickly as possible, bringing a qualitatively new level of security and comfort, energy efficiency and reliability. 
It is a surprise, but the current worldwide engineering industry does not engage its own manufacturers in designing new trains. It is outsourcing special companies. The French Alstom differs from others in this sense. Xavier Allard, Manager of Alstom Transport Design Department, tells us about the problems and trends in this engineering sector, and also how the "Allegro" design was created.
"Second Cargo Company” should be independent, instead of being part of RZD’s structure - stated Professor Semyon Rezer, President of "The Guild of Freight Forwarders", Doctor of Technical Science and the Honored Scientific and Technical Worker of the Russian Federation. He also pointed out some risks involved in creating “Second Cargo Company” and how these could be avoided. 
Operators still doubt in the rationality of park consolidation. Their fears cause complexities with maintenance of a turn of cars, and problems of realization of the scheme of interaction as a whole. The General Director of "VKM-TRANS" JSC Valery Andrushin has told about his vision of a situation.
Germany is one of the major foreign trade partners of Russia and a major investor in the domestic economy. However, supplies of goods and equipment from this country to the Russian Federation is connected with a number of difficulties. This is something we talked with Konstantin Piskun, the consultant on business development in Russia the port of Duisburg, German Chancellor Fellow.
