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22 February 2019

Severstal Distribution increased the volume of cargo transportation by 70% in 2018

In 2018, the volume of cargo transportation organized by Severstal Distribution group of companies (distribution network of Severstal Russian Steel division) exceeded 2 million t of rolled steel products having increased by 70% compared to 2017. The Group of companies has increased the supplies with all types of transport used – water, automobile, railway and containers; 95% of supplies were performed by sea and river transport and by automobile transport.

Taking into account the significant increase of the volume of supplies to target markets in Russia and in Europe, last year Severstal Distribution was actively developing efficient customer solutions in the field of warehousing and transportation logistics. Among other things, the Group of companies extended warehousing capacities in order to store products directly in the customer regions to arrange timely supplies. Secondly, new delivery schemes were developed with taking into consideration increasing volumes of transportation as well as geographic and infrastructural features of target regions.

«This work is performed on a continuous basis, more specifically, in 2018, transaction costs saving in general and for Severstal Distribution group of companies attained approximately $2 million which enabled us to ensure economically relevant supplies to different areas including remote markets», Severstal Distribution Logistics & Production Director Artemiy Timoshenko said.

In 2018, Severstal Distribution group of companies doubled the volume of steel products shipped by water:  supplies to Russia increased up to 100 thousand t, to European markets – up to 1 million t. The volume of cargo transportation by  truck performed by Severstal Distribution group of companies on customer order last year increased by 30% or up to 0.9 million t.  

Sea transport is the main type of transport for supplying steel products to European countries – via Baltic sea ports: for big volume deliveries to the Eastern Europe and Germany, there are almost no other alternatives due to the railway gauge difference as well as to the lack of capacities of near-border terminals. At the same time, port infrastructure is very well developed in Europe and the system of rivers and channels allows for supplies by river transport deeply inside the coastal countries. In Russia, the enterprise is also developing deliveries by water – last year, the volume of such supplies increased by 2.5 times compared to 2017, however, at the present time, the potential in this field is limited due to the lack of infrastructure objects corresponding to the needs. This year, it is planned to make contracts with some additional ports in Russia and in Europe.

«We deliver rolled steel products to 12 target markets: to Russia (mostly the European part), to Belarus, to Ukraine and to 9 countries of the Northern, Central and Eastern Europe, therefore we are constantly looking for alternative ways of delivery. Thus, for deliveries to the southern part of Poland, to the Czech Republic and to Slovakia we are offering a combined scheme – delivery by rail to the temporary storage warehouse at the border between Poland and Belarus, with subsequent transportation by  truck. Another promising transportation mode is the delivery by containers allowing to reduce transportation and transloading costs as well as to avoid mechanical damage of steel products at transloading », Artemiy Timoshenko reported.