24 March 2017

Logistics algorithm


Operation of grain-trading company entails non-stop flow of grain which starts from the field and finishes in the ship’s hold

Grain-trading companies are key players in the sphere of Ukrainian grain logistics. They purchase grain from farmers, process it, form lots, handle, and, finally export the grain. So, grain traders know about grain logistics’ bottlenecks firsthand. We discussed the problems of grain logistics with Oleksiy Tsurkan, Director General of Grain Elevators Division of Alebor Group of Compnies and Mykola Makhnevych, Director and Managing Partner of Boleko Transport Company.

Oleksiy, could you tell us what is the development outlook of Ukrainian grain market from your perspective?

— Crop yield of grains in Ukraine shows and annual increase by 18% in the average during last 12 years. If this trend goes on, by 2022 grain output will amount 97.1 mln tons and export volumes will total over 60 mln tons. So, in order to build strong logistics chain “field-seaport” for exporting grain or selling in domestic market, we established Alebor Group of Companies in 2009. For 7 years of operation within Ukrainian grain market it entered top-20 grain exporters list. Until recently grain traders haven’t faced so many problems with logistics, as far as grain export volumes were significantly smaller and high grain global market prices by far covered extra logistics expenses and handling costs. But against 2011 grain prices on global markets decreased about at a half. Thus, in order to keep grain production margins at appropriate level one should save logistics costs and develop promising directions of grain logistics infrastructure.

In particular, the first link of this chain is grain harvesting in the field, so called field logistics. This is a new service delivered to farmers. Mykola Machnevych, Director of one of our transport companies, will tell you about it in more details.

What is the most challenging problem of grain logistics in Ukraine, as for you?

— The most challenging problem is shortfall of modern silo facilities to store grain crops, as far as most silos in Ukraine have been built during Soviet Union times. Due to outworn technologies Ukrainian crops significantly lose in terms of quality. As of today we have two modern silo facilities – Vornovytske and Khrystynivske Grain-Collecting Station with total onsite storage capacity of 178 thousand tons for grain and oilseeds. Also we have Chesne Grain-Collecting Station within our Group of Companies, which is not very new one, but benefits greatly from its location on the roads leading to the Black Sea ports. Nowadays we work on increasing its capacities to 60 thousand tons. So, we are able to store totally about 240 thousand tons of crops at out silo facilities. I’d like to emphasize, that location of our grain elevators is a very important driver in terms of transport connections. Currently we can see significant increase in logistics costs stipulated by energy commodities prices increase and currency fluctuations. Thus, those silo facilities which are located close to fields of the biggest farmers and on the way of grain export flows, will benefit the most in terms of demand for silo services.

Could you briefly tell us about technical characteristics of your new grain elevators? What equipment do you use?

— We have three automated intake lines at our Khrystynivske Grain-Collecting Station with total intake capacity of 5 thousand tons per 24 hours. At Voronovytske Grain-Collecting Station there are also three automated intake lines with total intake capacity of 7 thousand tons of grain. We use Araj (Poland) and national KMZ Industries grain dryers which perform almost 10 thousand tons of grain drying per 24 hours. For grain cleaning we use Araj and KMZ Industries color sorters with total capacity of about 7 thousand tons per 24 hours. Silos are equipped with KMZ and Araj conveying norias. To perform grain shipment we have our private locomotive and two railway tracks at each grain-collecting station. Their total capacity of shipment is 100 railcars per 24 hours. All grain and oilseeds are stored in metal silo bins equipped with 24/7 grain condition monitoring automated systems of and active ventilation systems. Also we conduct systematic laboratory tests of grain samples, which are more informative than sensors’ values. That means we perform double control of grain quality.

What are your plans for long-term and short-term future development?

— In our future plans construction of one more grain silo facility is projected. It will enable the Group of Companies to reach total onsite storage capacity of 300 thousand tons of grain and oilseeds. And it will allow us to increase our annual export volumes to 2 mln tons. Alebor Group has developed very attractive offers for grain producers for new 2017/18 marketing year. But they concern primarily transport component of grain logistics, which is the competence of Mykola Machnevych, Director and Managing Partner of Boleko Transport Company.

Mykola, at the beginning of our talk we mentioned that one more link was added to the grain logistics chain of Alebor Group, namely, crop harvesting services. What were main drivers and how it is maintained from technical and material points of view?

— We inherited the problem of “battle for the harvest”: how to harvest the crops, where to carry it, how to store it. And the first stage of this battle deals with the process of crop harvesting in the field. Nowadays farmers incur the most losses because of harvesting machinery shortfall. They are waiting for weeks for a combine harvester available for leasing and loose high percentage of crops. After analyzing modern national grain logistics trends we offered our assistance to agriproducers. And, at the beginning of 2017/18 marketing year we reinforced machinery fleet of Boleko Company which now comprises 5 modern CLAAS LEXION 600 combine harvesters. Now our customers get rid of at least one “headache”; it particularly concerns small farms which can’t afford maintaining private combine harvesters.

How can you comment on the change of game rules for transport operators since 1 June 2016 when there was a restriction on heavy trucks movement on most of public highways came into effect?

— Basically, in my personal opinion, dimensions and weight control on public highways is necessary, and the main advantage of this innovation is further prevention of road surface damage, which is an urgent task while speaking about the present condition of main highways in Ukraine. I hope that setting up of the State Road Fund at the end of previous year will work. The funds will become targeted and it will be possible to spend them solely to roads repair and construction works. It is a very important step made by the government towards logistics systems support, in particular, grain logistics.

What is the machinery fleet of transport companies belonging to Alebor Group?

— As of today it comprises 100 modern MAN and DAF heavy grain trucks for long-distant transportation and 50 KAMAZ trucks to carry grain from the fields to silos. Availability of such powerful machinery fleet together with private combine harvesters added will ensure faster operations during the next harvest season. Loading of grain from the harvester’s hopper directly to the truck will allow saving valuable time and prevent from extra losses during transfer loads.

How do you track grain movement during road transportation?

— Each grain truck is equipped with GPS-navigator. GPS tracking system allows dispatch controllers to plan the route in advance and calculate estimated fuel consumption and time required. This system provides for 24/7 on-line monitoring of grain movement. It makes the driver to be more disciplined and prevents from route deviations and making unscheduled stops. This mode allows tracking fuel consumption and movement speed, and even driving style of each separate driver. Also it prevents from thefts of vehicles and grain in the process on the drive. So, we can state that we provide really safe and high quality service.

The Ukrainian Farmer, March 2017


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