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. Last Updated: 07/27/2016

Sending That 2-Meter Great Dane Back Home

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What do you do when you need to send two tons of condoms from Britain to Omsk or a planeload of chicken eggs from Belarus to the far eastern island of Sakhalin?

It's time for freight forwarding.

The condoms and the eggs — which were shipped after a Sakhalin poultry farm was wiped out by disease — are just some of the orders filled over the past 10 years by Armadillo, one of hundreds of freight forwarding companies operating in Russia. The company, which started out in 1991 forwarding extraction equipment for Texas oilmen to Western Siberia and Kazakhstan, has also shipped breast implants from Holland, a painting by Marc Chagall and a two-meter Great Dane for the wife of a Japanese diplomat.

"Together with a piano and other personal items, we safely dispatched the Great Dane from Moscow to Tokyo," Armadillo said on its web site Armadillo.ru.

As any Western company shipping cargo into Russia could testify, a freight forwarder is crucial for the safe and timely delivery of goods to local consignees. Such companies not only make up for the slow and unreliable mail system, but cut red tape at customs and ensure the delivery of goods to the far-flung regions.

Fees for freight forwarding are slightly higher than standard mail. For example, sending 20 kilograms of books from London to Moscow costs about $60 with International Cargo Service. Forwarding that shipment then to Vladivostok would cost 840 rubles ($30). International Cargo Service will help clear the books with customs at Sheremetyevo Airport. The cost: $100.

Bringing goods into Moscow — orders that were typically among the simplest deliveries — has become more difficult in recent months amid a customs crackdown on so-called gray imports. But freight forwarders say business is booming and expected to beat last year's levels.

Delays of up to a week are being seen by the Russian Logistic Services company, which specializes in moving foodstuffs and promulgates its ability to move goods directly into the regions without going through Moscow.

Nonetheless, the demand placed on its 100 staff at 10 branch offices nationwide is expected to be three times higher this year than in 2000, client manager Lena Bezrukova said.

She and other freight forwarders interviewed declined to provide details about their revenues or volumes.

Customs chaos has given Armadillo its share of grievances as well. February was "a slow month" due to the customs backlog, a company representative said.

Backlog or not, volumes still remain below those seen before the 1998 financial crisis — and the exodus of foreign professionals left in its wake, said Vladimir Subota, general director of Ferryman International, whose company deals with moving offices and personal effects.

"The situation isn't that bad, but put it this way: Everyone says that three years ago things were much better," he said.

Vinlund group's general director Peter Vins, though, remains positive about the local freight forwarding market and logistics in general in Russia.

"We have more work than we can handle," Vins said.

Indeed, due to the workload, he said he has had little time to think about the TransRussia Transport Logistics Exhibition being held this week at the Olimpiisky Sports Complex.

A range of freight forwarding companies will be strutting their stuff at TransRussia, which organizers call "the meeting place" for Russian industry and its trading partners. Last year the event was attended by more than 2,300 importers and exporters representing all elements of the distribution chain — from air cargo services and warehousing to port and terminal operators and, of course, the freight forwarding companies, who this year are expected to account for about a quarter of the exhibitors.

Another meeting place for customers and freight forwarders these days is the Internet, where tracking down a forwarder is just a click away. The exhaustive Russian-language site Perevozki.ru (www.perevozki.ru) lists more than 600 Russian and foreign firms in its freight forwarding section. The services offered by each are clearly displayed as an icon-based key, while an internal rating system shows a list of top-10 companies. For an English-language listing, the Freight Directory site at http://forwarding.to/russia/freight-forwarders-index.html provides an alphabetically arranged directory that isn't quite as broad as Perevozki's, but does include a separate list of Russian customs brokers.

There, one can find old-timers such as Soyuzvneshtrans, which has existed for over 75 years, or pick between the scores that sprang up in the early 1990s and have blossomed since. International Cargo Service started up back in 1993 when their business was run by "a few enthusiasts" out of a humble office in Sheremetyevo 2, according to the company's web site (www.ics.ru). The company is now a member of international giant Hellman Worldwide Logistics.

With growing volumes and expectations, times are looking up for freight forwarding, industry players said.

But, as with any sector in Russia, there remains a lot of room for improvement, said Igor Prokhin, project manager for the Coordination Council of Logistics, part of the Moscow Transport Institute.

"It will be two to three years before logistics in Russia gets to the standard of Western countries," Prokhin said.