S&D Logistics Ltd., a member of the New Silk Road Network representing Georgia was established in 2014 and are known for their forwarding expertise in the Caucasus region. Located in Poti, S&D Logistics distinguishes itself with a strategic focus on owning its own fleet of trucks, enabling reliable and independent operations.
Today, we speak with Ms. Victoria Lunga, who transitioned from managing a restaurant in Odessa to spearheading sales at S&D Logistics. Join us as we explore her insights into both the local market dynamics and Georgia's role as an important country along the New Silk Road.
In conversation with Victoria…
(Pic Credit: S&D Logistics Ltd.)
NSRN: Your career has been remarkably diverse, with significant experience in the hospitality industry. Could you share how you transitioned into the logistics sector and your role at S&D? How has your background in hospitality prepared you for the challenges in logistics?
Victoria: Indeed I began my career in logistics not too long ago, thanks to an unexpected opportunity that life presented to me. Two years ago, I moved from Odessa, Ukraine to Poti, I was however always on the hunt for something different and that way when I happened to meet the General Manager of S&D Logistics through a friend and despite knowing nothing about the company or freight forwarding prior to this, I took a chance and accepted the position in sales. However, my background gave me confidence in my ability to adapt to this new field. Sales, regardless of the industry—be it medicine, hospitality, or logistics—is fundamentally about providing excellent service. I knew I could bring my skills to S&D Logistics and make a positive impact. Since December 2023, I have been working as a Sales Manager at S&D Logistics. It is an amazing company to work for with good terms and benefits, a great office environment and most importantly, a very supportive team and CEO. My boss is the best I’ve ever had, and I genuinely love working for this company. I believe in our mission and feel that I am in the right place, not just for now, but potentially for the next ten years. Understanding the company's history and goals, I feel a strong connection and sense of purpose here.
My background is in the hospitality industry, having managed and owned my own restaurant in Odessa, Ukraine. This experience has given me a deep understanding of the importance of exceptional service. In hospitality there are no customers or clients, there are guests. A guest deserves the highest level of care and attention, far beyond just fulfilling their needs. It's about making them feel welcomed and valued, whether it's through the quality of food, the comfort of a pillow, or the overall ambiance.
Unfortunately, due to global circumstances, I had to leave Odessa and relocate to Georgia. Born in Poti, it felt like coming full circle. I feel happy to say that I have found an opportunity here that allows me to continue my passion for providing excellent service, albeit in a different industry.
NSRN: It is great to see how you have settled in at S&D Logistics so quickly and relate to the company history and mission. Could you share with us the inspiration behind the founding of S&D Logistics?
Victoria: The inspiration behind starting S&D Logistics stemmed from two main factors: experience and life circumstances. Our Founder had accumulated extensive experience working for one of Georgia's largest logistics companies. Over time, he felt ready to venture out on his own and establish his own company. At the same time, he had family responsibilities that drove him to seek a more independent means of providing for them. These factors combined to inspire him to take the leap and start his own business.
Since then, the company has grown significantly from its inception to where we are today.
S&D Logistics's Fleet; (Pic Credit: S&D Logistics Ltd.)
NSRN: What do you believe sets S&D Logistics apart from other companies in Georgia? As your CEO founded the company with a vision to innovate and improve upon his experiences with larger firms, what do you consider to be S&D's unique strengths and what makes it stand out in the market?
Victoria: The service S&D provides is unique in the sense that we focus on investing and using our own equipment. This mindset has been fundamental since the company's inception and will continue for the foreseeable future. Our founder's vision was to be an independent businessman, starting with just one truck and overtime expanding to 2... 3... 4 trucks. Today in Poti, we stand as a single entity with a fleet of 50 trucks and trailers, specializing in OOG cargo.
It is true that other major companies based in Tbilisi have expanded into cities such as Poti and Batumi, but S&D Logistics still stands apart as the sole company originating from Poti with its own fleet. Poti is our home and central hub, but our future strategy includes definite expansion plans. Specifically, we aim to enter less saturated markets to capitalize on new opportunities.
This fleet enables S&D Logistics to reach destinations anywhere, including Central Asia and recently, China. Just last week, we dispatched our 9th truck to Almaty, Kazakhstan, and after unloading cargo there, it will proceed to Khorgas, China. This marks our initial venture into the Chinese market, leveraging our own equipment and strategic capabilities. Our next step is towards Europe, though this may take another year or two.
NSRN: In recent years, Georgia has become a significant hub in the Belt and Road Initiative and the Middle Corridor, offering vast opportunities in the logistics market. Against this backdrop, could you explain what motivated S&D Logistics to enhance its market presence? What specific strategies did you employ to market your services? Additionally, what factors influenced your decision to join the New Silk Road Network?
Victoria: The global situation has had a significant impact on all sectors, including logistics. Before 2022, logistics in Georgia, especially in the port sector and for S&D Logistics, was thriving. We handled a steady volume of shipments and had consistent requests from shippers and customers both in Ukraine and Eastern Europe, minimizing our need for extensive sales efforts. However, the Russian – Ukraine war and Red Sea crisis changed this dynamic, prompting us to actively pursue new clients and broaden our market reach.
To achieve this, we strategically joined various networks. These memberships served as platforms to showcase S&D Logistics and the Georgian market, particularly Poti. In the logistics industry, traditional advertising lacks effectiveness; personal experiences, references, and networking are crucial. Joining these networks allowed us to highlight our presence and capabilities in Georgia. Many people aren't aware that Poti is the largest seaport in Georgia, as the focus is often on Tbilisi and Batumi. Another crucial aspect of our growth has been our specialized services in project cargo and out-of-gauge logistics. Not many companies in Poti have the equipment and expertise for these services, which has helped us attract new customers.
We then discovered the New Silk Road Network, which offered a flexible and strategic platform for us to find clients. This network aligns well with our location on the Silk Road, making it an ideal fit given the current global logistics landscape. We also noticed how it was the only network that had a website that was not just in English, but also Russian and Chinese, which was a signal for us that this is the right place to be for the Far East and Asian markets.
In short, our approach to finding new clients has been centred on leveraging industry networks, attending conferences, and participating in forums. These strategies have proven effective in expanding our reach and establishing valuable connections within the industry.
(Pic Credit: S&D Logistics Ltd.)
NSRN: Georgia, particularly Poti, plays a pivotal role as a gateway from Turkey to the CIS market, serving as a significant regional hub. However, competition is intense, involving not only local players but also Turkish companies using Poti for access to Central Asia. How do these competitive dynamics affect S&D's operations?
Victoria: Competition is strong and as you said, it comes not only from local companies, but also from neighbouring markets such as Turkey. These are challenges we must deal with every day.
Many small companies are being established daily here in Poti. The process to establish a company is simple; you just need to pay a small fee to the state to register. You don't need to own a fleet of trucks, have a physical office, or even hire staff. This simplicity allows anyone to establish a company, leading to intense competition and a chaotic market. When customers want to forward cargo from Poti Port to Yerevan or Baku, they seek the cheapest options available. These small companies can offer very low prices because they hire trucks and drivers without paying taxes, resulting in minimal profits and no overhead costs. Customers often choose these companies for their low prices, despite lacking services like tracking, responsibility, or proper documentation for customs clearance. This poses the main challenge for us.
Another challenge, though less critical, involves governmental issues. The government's assistance is crucial during crises like the Russian-Ukrainian conflict or the Red Sea crisis. Sea cargo volumes decreased, while rail transport increased, straining Georgian infrastructure. Overcrowded borders and inadequate roads highlight the need for government initiatives, such as ongoing road and highway construction programs promised to be completed by 2025. These developments aim to accommodate increased cargo volumes, driven by sanctions on Russia. Georgia plays a vital role in alternative routes, necessitating broader borders and enhanced infrastructure. Thus, infrastructure stands as our second significant challenge, complementing the intense competition we face.
The third challenge we face is with regards to personnel resources, particularly with our drivers. Since we operate our own fleet, hiring drivers becomes essential. However, these drivers often gravitate towards newly established small companies. This shortage of employees poses another challenge for us because these small companies can offer competitive salaries by avoiding certain operational costs. Scarcity of such skilled personnel is also a challenge we face in the Georgian logistics industry. Georgian logistics, like those in Central Asia, differ significantly from European logistics in terms of operations and mentality.
Looking at our current portfolio and the future, the key to our success amongst competition lies in two factors: firstly, having a highly capable team, with an exceptionally talented CEO; and secondly, owning our equipment.
NSRN: You mentioned that Georgia serves as a crucial entry point, given the current global circumstances. This presents significant opportunities yet, infrastructure remains a shortcoming to resolve. Can you elaborate on how Georgia's developments, such as new terminals and highways, are shaping up new opportunities for trade along this strategic corridor?
Victoria: Georgia presents promising long-term opportunities, thankfully. Historically, Georgia has always been an alternative route to the northern trade routes, it remains so today and will continue to be in the future. Particularly due to the sanctions on Russia, the route passing through Georgia has become increasingly popular. Here in our small city of Poti, we see numerous areas under construction for terminals, railway terminals, and container facilities—all currently being built or in progress, starting just a year ago. This signifies a promising future for Georgia.
Georgia offers three key options for freight forwarding: road, rail, and sea. We excel in multimodal logistics, handling cargo from the sea, forwarding it by rail and sea through the Caspian, and finally by truck to Asia—all passing through Georgia. Georgian companies, equipment, trucks, and railways play crucial roles in this process. Additionally, significant highway projects have been underway for the past five years, aimed at supporting our expanding ports.
Looking ahead, Anaklia Port, located 80 kilometres from Poti, is set to begin construction around 2025 or 2026, promising deeper waters to accommodate larger vessels. This port expansion aligns with the preparations of our highways to handle increased cargo volumes. Georgia holds a strategic position along the New Silk Road, preparing diligently for future demands.
Currently, Chinese ports are facing tight capacities, resulting in extended sea freight transit times to the Black Sea. An alternative route involves trucking from Chinese ports to Khorgas through Kazakhstan and into CIS and Caucasus countries, eventually reaching Europe—again, passing through Georgia. This route provides a viable alternative for Chinese goods bound for the European market, bypassing the congested African and Mediterranean Sea routes via Turkey and into Central Asia. In essence, Georgia remains an important hub and will have a critical role in the functioning Silk Road, poised for future growth and connectivity.
(Pic Credit: S&D Logistics Ltd.)
NSRN: The “Middle Corridor” route you just mentioned involves extensive land transit where cost has always been voiced as a major concern. It's often noted that lower-value goods find it challenging to use this route due to perceived higher costs. What are your thoughts on this?
Victoria: Yes, price is certainly a crucial factor in considering this option. If a customer prioritizes faster delivery and can balance time with costs effectively, then this option becomes viable. Currently, for instance, sea freight from Qingdao or Tianjin to Poti costs around $8,000. This sea freight alone takes approximately 70 days. Adding handling and delivery to Baku, for example, totals around $9,600.
Alternatively, choosing the road option from a Chinese port to Khorgas and then onward to Baku totals approximately $10,500. The difference isn't substantial; even if it's $1,000, it may not justify the lengthy sea freight transit time when costs are fairly close.
For shipments destined for Europe, the road option can cost around $15,000 for a standard 40ft container, but rail services offer a much cheaper alternative. At present, sea freight may not be the most supportive option for consignee shippers who prioritize timely deliveries and cash flow. The preference leans towards road transport due to the value of time—time is money.
NSRN: Coming back to the Georgian market, you mentioned that there is currently a lot of infrastructure development supported by the Georgian government. Are there specific policies that the government has developed to contribute to these developments and support logistics companies?
Victoria: Yes, especially regarding competition with smaller companies, the Georgian government has established a new association for transport companies and forwarders. Starting from early 2025, a new law mandates that all transportation and forwarding companies must register with this association to conduct logistics services. Companies need to demonstrate their credit and insurance policies, physical infrastructure, team details, and fleet information to qualify for registration. This governmental initiative significantly influences our market dynamics. With this association, companies like ours can better regulate market rates through discussions and roundtable meetings with association directors and headquarters.
Luckily, we have close ties with this association, allowing us to positively influence the development of the logistics market. This internal regulation enhances our Georgian market. Globally, the Georgian government also gives out permits foreign companies to use transit routes through Georgia, while imposing taxes and charging for these permits. These funds will also directly contribute to our national budget. This dual approach supports both our local market and international transit needs.
Establishing this association marks a significant step and demonstrates proactive government support for private businesses. While changes won't happen overnight, this initiative provides a more stable environment. Small and unregulated companies that don’t need to comply with various standards often disrupt market rates, compelling us to lower our prices to remain competitive, and lowering the quality of service. Regulations ensure service quality, insurance coverage, and financial stability across the industry, encouraging fair competition.
NSRN: There is an upcoming election later this year in Georgia. Is there a general concern in the logistics market regarding this? How does politics influence the logistics sector?
Victoria: Yes, absolutely. The upcoming elections in Georgia are a big deal for us in the logistics market. Elections definitely have a say in how things are run. Georgia, especially Poti, is crucial as a gateway to the global economy. Elections determine how logistics and the economy are managed because logistics is our main money-maker here. We export metals and import cars and all sorts of goods come in transit. Georgia is like a highway. So it all depends on who gets elected and how they regulate things.
Politics, government decisions, elections—they all influence how logistics are seen and supported. It's about how much attention and support logistics gets in parliament and from the authorities.
(Pic Credit: S&D Logistics Ltd.)
NSRN: Lastly, what is your long-term vision and dream for S&D Logistics? How do you envision its future success?
Victoria: I imagine us working from a big office with a strong team and having a real impact in the Chinese, Central Asian, and European markets. Our goal is very clear — to be a major player in these regions.
Our long-term vision is simple and straightforward — to rank among the top three or five companies in our industry. This makes us ambitious yet grounded! It's a significant goal that we believe is both challenging and achievable. We understand the responsibility that comes with being at the top, so our focus is on maintaining a strong position within this elite group. We see ourselves as leaders in our region, not necessarily always first but consistently in the top tier.
This vision drives us to improve our services, ensuring we remain competitive and impactful in the logistics industry.
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