A landlocked country in the CIS Region, Turkmenistan has unique logistics processes. The Caspian Sea is its only access to a water body, through which it moves large volumes of cargo. Apart from vessels, the country relies heavily on road transport and is now curiously welcoming rail freight within the region. Though the journey towards the inclusion of rail freight as a serious alternative continues to be challenging, nevertheless, many small and medium-sized logistics companies exhibit interest.
To know more about the region and its various nuances, we spoke with At-abraý (Turkmenline), a logistics company based out of Turkmenistan, with offices all across Middle Asia. The conversation was joined by Balkan Annamyradov, owner and Managing Director of the company, as we spoke about establishing a logistics company in Turkmenistan, their work with large government bodies, challenges in the CIS region and the changing dynamics of logistics.
In conversation with Balkan…
NSRN: At-abraý is one of the largest companies in Turkmenistan, known for its wide range of services and optimized solutions. It has the experience of working with some of the biggest corporates as well, can you tell us something about the origin of the company, and some of the key achievements for the company in the journey so far?
Balkan: At-abraý was established in 2013. Initially, we started with land transportation with about ten flat racks for our customers that were mainly into agricultural produce. We were also the first ones to use temperature-controlled trucks to transport agricultural goods from Turkmenistan to Russia. We then increased the number of our flat racks to thirty in 2016. We have offices all across the CIS region, in Turkmenistan, Georgia, Turkey, Azerbaijan and Uzbekistan.
One of the biggest projects we initiated was to handle transportation for the United States Army in Afghanistan. We transported all types of temperature-controlled products for them. This transport was generally from Turkmenistan to Afghanistan. For the last five years, every week, we were transporting 15-25 trucks. Of course, with the Taliban takeover now, this movement has stopped.
So, our journey first began with temperature-controlled trailers and then we also began using containers for general cargo. Further, in 2016, we developed our ocean freight business as well, gained some port experience, chartered vessels and conducted projects for NATO. This was a really good experience for us, and it continued for five years. For this venture, we also initiated a Ro-Ro vessel in the Caspian Sea; this was largely done because we were dealing with large volumes and our trailers needed more support. We launched this service so that we could handle the increasing volumes without affecting our other customers and provide smooth transport for our project with NATO.
Apart from these projects, we also began transporting containers, which carried general cargo mainly to Afghanistan as well. We also had the idea to develop our own containers for our commercial customers and founded the company Turkmenline in 2019 and started to buy containers around local regions. All our containers are registered and have the BIC code. We got the code ‘TMKU’ for our containers. Most often, the containers that we bought from around the region were not new, but we refurbished them all and painted our brand on them, put on our BIC code and so on. This, of course, helped us start our multimodal and intermodal facilities. Overall, our projects with the US Army, NATO, United Nations, US Embassy in Turkmenistan, and American construction companies such as Caddell and others have been significant for us. So, we have the experience to work with many large organizations.
NSRN: At-abraý/ Turkmenline has strong capabilities in various modes of forwarding, particularly with land transport, it offers integrated freight solutions across various continents. How does it set itself apart in this competitive field of road freight which is dominant in the CIS?
Balkan: We generally conduct land transport for cargo transportation to Russia since we export raw agricultural materials to them and import finished food products. But generally speaking, for other countries, such as Turkey, Azerbaijan or other transit countries, we can offer a range of services through different modes, offering multimodal, intermodal, vessels and so on. For example, we can transport from Poti, in Georgia or from Turkey to European destinations through vessels, then put the containers on rail. We can also provide rail services to Turkmenistan, Tajikistan, Kyrgyzstan, Uzbekistan and so on.
We make sure that we give our customers alternatives; that way, they have options to choose according to their needs. When it comes to road transport, we have a very solid support team and offer transferability that way. We diligently report all the movements to our customers, we give them a report once in the morning and then once in the evening. Since we use tracking technologies for our trucks, we are able to report the accurate location of the cargo. Moreover, in our region, we do not face a shortage of drivers, which can be quite a problem in the West sometimes.
NSRN: Logistics companies usually struggle a lot while understanding the various aspects of operating in the Middle Asia regions. What do you think is the top challenge in this region and how can companies tackle that?
Balkan: When European logistics companies wish to enter Middle Asia, they first need to find reliable and trustworthy partner companies. Our region has many developing countries and too many people establish their own business in this sector without any capital, any trucks or contacts. They will establish a nice-looking website, create business cards and speak well, but are unable to do the required job.
So, the most important thing in the region is to find trusted partners before venturing into business for sure. A good partner can help you navigate the regions, the customs regulations and so on. One of the best places to find a trusted partner is to become a part of transport associations or trusted logistics networks like New Silk Road Network. Another thing to keep in mind is that the region from Turkey to Asia and from Turkey to Europe is completely different from each other.
NSRN: The Middle Asia countries have also been a critical component of the New Silk Road, especially with China looking to leverage rail solutions through the hinterland. How has the growth of rail freight influence the logistics industry in the region? What does the future look like for rail freight there?
Balkan: At the moment, the development is slower than what we would have liked. I often see the news of the China-EU rail going, but to me, I still think it is only done by bigger companies that are also big brands. For the normal companies, getting into the rail is still a bit slow. Also, in Turkmenistan, even if we use the rail, the rates are rather high as compared to a vessel from Bandar Abbas. Moreover, the transit time is the same. Sometimes we also face problems while handling rail with China because they are not very familiar with our customs documents at the border.
Last time, we tried to send some cartons to China via rail, but we faced many problems at the border regarding documentation and paperwork from our country. A solution for this has to come from different places; first, companies have to use rail and connect Middle Asia properly with China and Chinese companies. Then we need to voice our problems to the government authorities better and push them to make customs easier. Just to give you an example, generally, in CIS countries, we use different documents for import and export. But when using rail, this is not possible; that’s why smaller companies struggle a little more. For rail, it must always be the documents from the point of origin, the first documents. In comparison to rail, road transport has the freedom to use different invoices and documents throughout the way. That’s why rail freight is still very niche.
NSRN: Currently the world of logistics is experiencing what seems like the largest rate increase in recent decades, on top of that, container and equipment availability is also under pressure. What impacts did you see on your daily business and on the CIS market in general? How is At-abraý/ Turkmenline tackling this situation?
Balkan: Import volumes were affected, as we generally use containers to import cargo. The import was generally coming from China, so it affected the price, which was so high! It was an increase of almost $2000 from what we have usually known.
Since we don’t have any connection to the ocean or sea, except for the Caspian Sea, we don’t have too much volume to export. It wasn’t really a bad situation, except for the cost. There was also not too much trouble finding containers for our region, but the prices really stumped us. Since we have our own containers through our company Turkmenline, exporting was not a hassle and helped us through this situation.