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Strategy

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Strategy

Our Mission

Our mission is to provide effective support to our clients by offering prompt, reliable and comprehensive containerised cargo delivery and logistics solutions.

Today, container business is among the most advanced and tech savvy segments of the freight transportation market. Our mission is to create additional value across the logistics chain, making container shipments safer, cheaper and more affordable for both cargo owners and consignors. This will in turn help reduce the transportation component in the price of the final product and therefore boost the efficiency and competitiveness of the Russian economy.

Strategic Goals

To increase the Company's market capitalisation through the increase of scale of business and its efficiency.

Creating additional value for our clients and partners is key to achieving the strategic goal of ensuring long-term sustainable value growth for shareholders.

The core vehicles for reaching the strategic goal are as follows:

growth of container transportation volumes as a result of:

  • enhancing customer experience;
  • simplifying and speeding up the transportation process;
  • expanding freight volumes by tapping into new market segments;
  • competitive pricing;

decrease in per unit operating expenses as a result of:

  • streamlining performance of the flatcar and container fleet;
  • reducing of empty runs by optimising container logistics
  • optimising the container terminal network;
  • introducing state-of-the-art information technologies,
  • Improvement of labour productivity.

 

Target Business Model

A vertically integrated transport and logistics group, containerised cargo shipper and supplier of select logistics services in Eurasia.

The Company ensures the delivery of its mission and strategic goal by developing a vertically integrated business model of a network container operator.

  • TransContainer builds its business in the container segment, the transport market’s most dynamic segment with a significant growth potential.
  • Wide network coverage of the business results from operating the largest fleet of flatcars and containers in the 1520 gauge market, running a network of railway container terminals in Russia and Kazakhstan, and administering a developed sales and service network that includes more than 100 sales offices in Russia and operations in 29 European and Asian countries. This helps to ensure the availability and reliability of container shipments for all categories of clients, and offers them the widest range of transportation and logistics services in the container market. The extensive network of routes also enhances the potential for optimising empty runs and increasing freight volumes.
  • Vertical integration of key transport assets, including flatcars, containers and rail container terminals, improves the control of intermodal haulage quality, and serves as an essential factor in increasing the rolling stock turnover.

 

Provisions of Current Company Strategy

Relying on the Company’s competitive advantages, approved mission, strategic goal, target business model and taking into account the rising competition and the expected economic growth in the projection period the Company has the following strategic initiatives.


Basic strategy scenarios, up to 2022:

Rail container transportation

Rail container transportation
Assumptions Implementation mechanisms

Relying on stable growth of the rail container transportation market in Russia and the CIS averaging 7.6%, against a background of a growing economy, consumer demand and production of high-value-added industrial products.

To optimise flatcar and container fleet structure depending on the current market situation.

To enhance the effectiveness of the Company’s flatcars and container fleet.

To increase the number of block-train deliveries.

To develop tank-container transportations.

Terminal business

Terminal business
Assumptions Implementation mechanisms

Growth of terminal handling in line with the rail container transportation market. Elimination of bottlenecks at the key terminals.

Continue to create terminal network with support base in the main RF’s transportation hubs.

Optimisation of the terminal business with low level handling capacity.

Equity participation in prospective terminal projects.

Sales and client service system

Sales and client service system
        Assumptions   Implementation mechanisms

The Company’s sales and client service strategy is based on realising the advantages of vertical integration and a wide geographic presence that enables the business to ensure container freighttransport accessibility on the 1520 gauge railways for all client categories.

Expansion of internet sales and IT products, enabling clients to place orders for transport freight forwarding services, pay for these services and receive information about the movement of a rail freight container, among other things, online.

In the sphere of international transportation, the Company’s strategy is aimed at increasing its presence in the primary areas of origin and termination of container traffic passing along the 1520 gauge railways, as well as simplifying customs and process procedures at border crossings where the Company’s terminals are located.

Proactive sales approach.

Increasing of the IT-technologies in customer’s services. (CRM)

THE EXPECTED RESULTS OF THE STRATEGY

THE EXPECTED RESULTS OF THE STRATEGY

As result of the implementation of the main directions of the strategic development the Company plans to succeed the following effects by 2020.

  • To strengthen PJSC TransContainer’s leading position in container transportation services on the 1520 gauge railways.
  • To become one of the top-three in the fast-growing tank-containers transportation market.
  • To ensure flatcars fleet productivity growth not less than 28% to the level of 2016.
  • To ensure the labour productivity growth not less than 58% to the level of 2016 (in physical terms).
  • To ensure the stable growth of the following parameters (in base scenario):
    • Net income/Adjusted revenue - 20%
    • EBITDA/ Adjusted revenue - 40%
  • To ensure the return on equity (base scenario) not less than 15%.