The 2014 reporting year was marked by an overall decline in industrial production throughout the country as well as a challenging economic situation. These factors had a significant effect on Federal Freight Company along with the entire market for the operation of rolling stock on the Russian railways network. However, thanks to a set of measures aimed at optimising business processes, Federal Freight Company managed to strength its position on the market.

In 2014, Federal Freight Company’s share of network-wide freight turnover increased to 15.0% of the overall network, while its share of overall shipment volume rose to 11.7%. Federal Freight had a 13.4% share of the overall freight car fleet as of the end of 2014. The volume of gondola handling by Federal Freight Company increased 9% in 2014 compared with 2013.

Federal Freight Company shipped approximately 161.9 mln tonnes of freight in 2014 (up 8.2% from 2013), or 2.5 mln railcar shipments. The biggest growth was seen in the segment of shipments in gondola cars owned by Federal Freight Company: 146.0 mln tonnes were shipped in 2014 (12.3 mln tonnes more than in 2013); freight shipments in tank cars increased 40% to 5.6 mln tonnes (from 4.0 mln tonnes in 2013).

However, the overall downward trend in activity on the freight car market had the greatest effect on the decline in the Company’s income and the negative financial results generated by Federal Freight Company.

For more details, please visit Federal Freight Company’s website at http://ru.railfgk.ru

The GEFCO Group is a global player on the transportation and logistics services market and operates on five continents. The GEFCO network includes 35 representative offices and 70 partners, including in key regions for the international business development of Russian Railways such as Central and Eastern Europe, the CIS and China.

The Company specialises in supply chain management (3PL services) as well as integrated services for the management of all logistics processes at client companies (4PL services), which are virtually non-existent in Russia right now.

The Company’s customer base includes more than 40,000 counterparties around the world, including transnational industrial corporations, many of which are represented on the Russian market (PSA Peugeot Citroën, General Motors, Renault, Ford, BMW, L’Oréal, Phillips and Electrolux).

As part of a policy to expand the group’s geographic presence around the world, GEFCO consolidated its positions on the Indian logistics market in 2014 by increasing its stake in the company Mercurio Pallia and also expanded its network in North Africa by opening a representative office in Algeria.

At present, GEFCO fully meets the logistics service needs of PSA Peugeot Citroën, from the strategic supply chain planning to directly transporting finished vehicles, components and spare parts. The companies signed a ten-year framework agreement in 2012.

As part of a partnership with General Motors and PSA Peugeot Citroën, a long-term contract was concluded for the provision of logistics services with General Motors under which GEFCO was granted the status of the exclusive supplier of 4PL logistics services in Europe, Russia and Turkey (production volume in these regions of approximately 1.2 mln vehicles per year).

In 2014, GEFCO launched a joint project with Volkswagen to provide vehicle storage services at the freight yard of the Doskino station.

GEFCO generated revenue of EUR 4.053 bln in 2014 (an increase of 1.5% compared with 2013).

For more details, please visit the GEFCO website at www.gefco.net

United Transportation and Logistics Company (UTLC) was registered in November 2014. The founders of the company were Russian Railways, Belarusian Railway and NC Kazakhstan Temir Zholy. UTLC has charter capital of RUB 39.7 bln.

During the initial stage, Russian Railways contributed its stakes of 50% plus two shares in TransContainer and 100% minus one share in Russian Railways Logistics to UTLC (for a 99.84% share of charter capital), while Belarusian Railway and NC Kazakhstan Temir Zholy made cash contributions of RUB 32.7 mln each (each company has a 0.08% share of UTLC charter capital).

During the second stage, NC Kazakhstan Temir Zholy is to contribute shares from its subsidiaries Kaztransservice and Kedentransservice (flatcar and terminal operators that are also located at the Dostyk and Altynkol border stations with China), while Belarusian Railway is to provide terminals in Brest and assets of Belintertrans, and the partners are to increase their stakes in UTLC charter capital to an equal level.

The same principles were employed when establishing UTLC as those used to develop international transportation corridors: common standards, common technology and a common tariff policy. UTLC aims to provide a full range of integrated transportation and logistics services in railway freight and intermodal transportation throughout the Common Economic Space with eventual entry to the markets of Europe and China.

The first outcome of the UTLC project was an agreement between the railways of Russia, Belarus and Kazakhstan to establish a common, competitive through tariff rate. Conditions have now been created to attract additional container shipments from China to Europe and vice versa.

In 2014, UTLC also signed a memorandum of intentions with GEFCO SA, which is part of the Russian Railways Group. Synchronising the two projects — the establishment of UTLC and the integration of GEFCO — will ensure a substantial synergistic effect due to the coordinated development of transportation assets and the replication of advanced logistics technologies in the Common Economic Space and also by attracting the customer base to the Asia-Europe transit corridor.

In addition, UTLC and DHL Global Forwarding (China) signed a memorandum of intentions to establish a strategic partnership for shipments between China and Europe. The companies agreed to cooperate in regular shipments with door-to-door container delivery between China and Europe in no more than three weeks.