The company has developed and is implementing an efficient method to transport cargoes in order to reduce dependence on external factors, minimize business risks, and to create more convenient conditions for all grain market participants.
NIBULON, a producer and exporter of grain and oil crops, is one of few companies in Ukraine with a vertically-integrated business structure. The company ensures control over all elements according to the technological agricultural scheme “field-port”. Thus, this chain starts with soil preparation, winter crop sowing and ends with grain shipment at the export terminal and grain supply to its consumers. The technological sequence is the following: to cultivate agricultural commodities, to harvest, to transport grain by railway, road transport or by water to grain storages for storing and achieving sale conditions and, finally, to sale and to export commodities.
“Thus, NIBULON’s strategic task is to create a full cycle to promote its own agricultural commodities”, stresses Oleksandr Volkov, a head of NIBULON’s transport logistics department.
“It is important that the combination of all activity areas provides NIBULON with competitive advantages in comparison with the traditional practice of domestic producers and exporters. The company has a wide range of methods to achieve advantages.
One of these factors is a developed network of branches that ensure efficient work in different climatic zones and allow the company to carry out efficient purchasing and sales activity. The inland silos and transshipment terminals enable NIBULON to sign contracts for product delivery directly with producers in their regions without using third party services. NIBULON has a complete set of highly-productive import machinery, own truck fleet, not involving third party vehicles. The company’s analysts quickly gather and process information on the agricultural sector condition, thereby enabling the company to make quick and right decisions.
NIBULON’s leadership in grain exports is a stable fact in Ukraine. Constant presence in the grain market has formed strong commercial relations with foreign partners. This is confirmed by the fact that NIBULON can open marketing year and start its export activity earlier than other grain traders – immediately after harvest. High yields of commodities cultivated at NIBULON’s branches (more than 100 thousand tons), in addition to its own developed logistics infrastructure, play a key role.
The arrangement of grain transportation is of great value in the “field-port” agricultural scheme. “It is worth mentioning that qualitative and efficient analysis of the sector condition and appropriate practices give the desired effect”, notes Oleksandr Volkov. “All types of transportation are important in a single logistic chain; thus, NIBULON has never reorientated itself towards one kind of transport. Though, the priority task is to develop river cargo fleet as a cheap and ecological alternative to transport agricultural products on inland waterways for export”.
To reorient a part of transportation from railway to road transport in due time, taking into consideration the railway condition, can be an example of such flexibility. The company increased its truck fleet and transportation volume. Road trains enable NIBULON to form grain batches properly and to maintain the required product conditions – from the producer to the shipment aboard a vessel. Please note that NIBULON’s road transport is new and modern.
At the same time NIBULON is using all possible mechanisms to improve efficiency of product transportation by railway. In particular, the company supports the Memorandum among Ukrzaliznytsya and the Ukrainian Union of Industrialists and Entrepreneurs, the Ukrainian Grain Association, the Ukrainian Agrarian Confederation and other industrial and agrarian public organizations. The goal of the agreements is to create conditions for a stable and predicted development of the Ukrainian grain sector, to achieve the efficient cooperation of Ukrzaliznytsya with business when exporting grain and oil crops, thereby improving grain sector competitiveness.
“Our company immediately started to implement the Memorandum regulations and practically proved that Ukraine does not have a critical shortage of grain railcars, as they are used to saying now”, says Oleksandr Volkov, a head of transport logistics department. “Due to our efficient and well-coordinated work, we managed to reduce railcar turnover from 8-10 days (averagely in Ukraine) to 3 days. Using shipment routes is an opportunity to avoid idle time, to arrange round-the-clock efficient work without interfering with other market participants.
The river logistics development is the main direction of NIBULON’s activities that has a lot of advantages. One of its main advantages is to transport cargo by river that is twice or triple cheaper than by highways or railway. In addition, agricultural producers can choose where to supply products and save on logistics. “This confirms that the company aims at developing and improving its own logistics system”, argues Oleksandr Volkov. “Construction of the transshipment river terminals, NIBULON’s own fleet (9 tugs, 28 non-self-propelled vessels, construction of the series of vessels, highly-productive floating transshipment crane St. Mykolai, plus a dredger) guarantees diversification of grain movement according to the scheme “field-port”. In addition, grain transportation by water reduces cargo turnover and load on worndown highways, influences the environment positively.
Rational use of available resources is another component of NIBULON’s logistics system. The transport logistics department forms transportation tasks in such a way so that   transport when unloaded may transport fodder, building materials and other cargoes on the way back. In general, NIBULON’s logistics practice aimed at improving the economy efficiency continues to develop itself in order to strengthen NIBULON’s positions in the grain market.