Case Study – 02
Getting product into a brand-new market
Background
What a great challenge. A new market is opening up, the sales organisation has committed significant funds and is busily setting up a network but there was no physical route to market.
The problem
With sales forecast of 100k units pa, we needed to set up a shipping route, landing port and haulage network to deliver cars across Russia. Sales were expanding, product was hot and the existing grey market had proved to have good volumes.
The problem was that we had no port of entry and no partnerships with hauliers that would have the scale or the local knowledge to deliver that volume of cars. We needed a partner that could set up a port of entry capable of dealing with pre delivery preparation, efficient loading of trucks and deal with customs authorities.
The solution
We found a partner the perfect partner with the right connections through a process of market research which included multiple visits to Russia, meetings with Russian authorities and local business leaders. In addition, we needed our shipping partner to procure a vessel that could still deliver through the winter (ice class vessels are not as common as you think).
The success
We opened the first new vehicle port of entry in St Petersburg. We agreed a cost per truck rate and navigated our way through the complexities of Russian customs. In the first year of operation we imported circa 100k new vehicles and managed a 98% OTIF result.
Reflections
A completely new market for this organisation, and virtually no local knowledge in the team meant a steep learning curve. Not only in the physical and transactional aspects of importing product into this market but most importantly, the dealing with people from a different culture and a different political and economic point of view.
