NLMK and Freight One to pilot transport outsourcing

Freight One will manage railway transportation operations at the Urals sites of the Division (NSMMZ and NLMK Metalware): it will lease the rolling stock from NLMK Group and manage the railway department shared by the two plants; as well as provide maintenance of track facilities and locomotives.

The project is expected to reduce the sites’ transportation and maintenance costs by at least 8%.

Sergey Likharev, NLMK Group Vice President for Logistics, said: «In line with Strategy 2017, the Group is implementing programmes which improve the efficiency of all production and business processes. One such initiative involves the outsourcing of a number of logistic functions. We have successfully implemented similar projects at the Lipetsk site. For instance, we’ve outsourced car transport which has reduced costs by 13.8 million rubles per year. The Freight One project is more complex as we are outsourcing railway transportation which is part of the production chain. We are certain that with a partner like Freight One we will achieve the goals we have set and, based on the results of our cooperation, and we will leverage this experience to roll this project out to other NLMK Group sites.»

Alexander Sapronov, Freight One Executive Director, said: «We are convinced that in providing this new service to the sites of Russia’s largest steelmaking company, Freight One will help optimize and improve their logistics. For us, further expansion of industrial logistics will secure opportunities for a more efficient cooperation with our key customers and become a reliable source of freight transportation development.»