The debate between whether to be a generalist and or a niche specialist has been going on for centuries. In the world of logistics, both types of companies exist, and each contributes in their own ways to keep the flow of trade going in our daily lives. As part of our special Belgium-focused edition, we speak with the Founder and Managing Director of ABL DISSACO, the New Silk Road Network member for Belgium, Mr. Renaud Stiers. ABL DISSACO is a classic example of being a niche specialist in a few significant areas, namely the CIS market and project cargo logistics.
His story unfolds across continents, highlighting a career that began with a quest for international experience. In conversation with Renaud…
Renaud: After completing my studies in Applied Economic Sciences at the University of Antwerp, my biggest wish was to move abroad for my first work experience. With that in mind, the first job opportunity I got was to move to Hong Kong for two years to set up an LCL product that catered to eastbound transportation, bridging Europe to Hong Kong and China. Setting that up took me one year and I was soon ready for the next challenge.
This next opportunity initially came with the stage set for Riga, I was supposed to manage a ship agency for P&O Nedlloyd in the Baltic States. However just after I signed the contract, the company secured a substantial logistics project for a global tobacco company, primarily focusing on establishing a large new factory in Almaty, Kazakhstan. My task here involved managing the eastbound transportation of rolled tobacco from Europe to Almaty, as well as the westbound journey and local flow of the finished product: cigarettes. In 1998, I relocated to Almaty and concurrently set up the company's operations in Central Asia, extending to Tashkent, Uzbekistan, and establishing a local office in Bishkek, Kyrgyzstan by 1999.
This tenure eventually led to a promotion in 2001, where I moved to Riga and assumed responsibility for offices in the Baltic States—Riga, Klaipeda, Tallinn, as well as the office in Minsk—for a year and a half. Following a shift in management, I ascended to the role of overseeing 15 offices across the former Soviet Union until 2004 within that Belgium company. Following that, an exciting opportunity arose in 2004 to manage ExxonMobil's SAKHALIN-I Project - one onshore and one offshore oil rig project in Russia - which I led until 2006.
Renaud Stiers; Picture Credit: ABL DISSACO
Renaud: After spending approximately ten years in the former Soviet Union, my wife and I realised that our children were reaching school age. We made the decision to return to Belgium, which was familiar ground for us, to ensure our children's education. Consequently, by the end of 2006, we relocated back to Belgium, convinced that our accumulated experience from a decade abroad could be put to good use.
Recognising the youth and immense logistical potential of markets in the former Soviet Union - Russia, Ukraine, Central Asia, and more - I reached out to an old colleague from Belgium who was my counterpart when while working in Central Asia. Together, Elke De Backer and I founded ABL in 2007. Our primary focus lay in logistics to and from the countries within the former Soviet Union and Mongolia, with a heavy focus on eastbound cargo. Initially, our clientele consisted of a few direct clients, and what’s worth pointing out too, we collaborated extensively with prominent foreign forwarders such as Geodis and Schenker. Despite their own established presence in Moscow and other former Soviet Union countries, they preferred collaborating with independent third parties for internal regulatory reasons.
Our launch in 2007 was met with considerable success due to the abundance of business opportunities and the lack of interest from other forwarders due to issues like corruption, lack of transparency, and problems with influential figures, often referred to as the mafias. Our extensive experience enabled us to discern reliable partners and navigate these challenges effectively. Consequently, we initially focused on the CIS business.
By 2015, ABL had grown to a team of six. We expanded further by acquiring DISSACO, a similarly sized freight forwarder established in Antwerp in the early 1990s. DISSACO primarily engaged in project logistics, especially with North America, the Middle East, and Asia. Our strategic decision to acquire DISSACO was aimed at diversifying our services since until then, our main selling proposition revolved around logistics to CIS countries.
The takeover allowed us to broaden our scope and mitigate risks, especially considering the political landscape in Russia with Mr Putin's constitutional changes allowing multiple presidential terms. This factor drove our acquisition strategy in 2015.
In 2016, we merged our names, becoming ABL DISSACO, and have continued our journey since then.
Renaud: Given our background in the oil and gas sector within the energy industry and our extensive historical experience in logistics within CIS and Central Asia since our inception in 2007, our uniqueness was evident. We were among the pioneers and subsequently became one of the primary forwarders focusing on this market segment. Over time, our consistency in approach and business philosophy toward Central Asia and CIS markets remained steadfast. Even after the 2015 acquisition of DISSACO, logistics to and from these regions continued to be one of our core activities.
While it's true that the market in Antwerp predominantly focuses on and holds expertise in African markets, for us, our location in Antwerp is simply a geographical coincidence. As Belgians with our homes based in Belgium and considering the central location of the port of Antwerp in Western Europe, establishing our logistic base and headquarters here was a no-brainer decision.
Expanding our scope in 2015 broadened our client offerings to include support in African markets. The logistical needs in Central Asia or the CIS share similarities with other regions, particularly Africa. Both regions often present remote locations and complexities beyond just port-to-port logistics. Most of our contracts from clients are typically based on DDU, DAP, or DPU terms and, therefore involve much more intricate operations and higher service requirements.
Regardless of whether we assist clients in navigating Central Asia or Central Africa, our approach remains consistent. Our focus lies in providing comprehensive customer service and valuable assistance, and these elements play a crucial role in serving our clients effectively.
We need to emphasise the advantages of our location in Antwerp, undoubtedly a global logistics hub. This strategic positioning has provided us with numerous facilities, particularly in handling breakbulk cargo and project cargo. While we are based in Belgium, our clientele extends far beyond national borders. We serve customers across Europe, including Holland, Germany, France, Switzerland, and even the United States. Our presence in Antwerp has definitely significantly facilitated the expansion and development of our activities.
Weathering Extreme Weather Conditions in Kazakhstan: Videoshots from driver admist snow storm and Thaw season
Video Credit: ABL DISSACO
Renaud: In the past two decades, I've observed significant and positive evolution within the CIS market across various aspects. This transformation is particularly evident in regulatory, operational, and attitudinal changes.
Firstly, there have been substantial regulatory changes in these markets. Over the years, we've faced challenges like intransparency and frequent alterations in regulations and legislation. However, there has been a noticeable shift towards a more transparent logistic market in the CIS. While laws were changing frequently 15 years ago, today, legislation is comparatively more stable—except for exceptions like the ongoing Russian-Ukrainian conflict and evolving sanctions. Despite these exceptions, there's been a trend towards a cleaner and more transparent business environment.
Secondly, in the logistics landscape 15 – 20 years ago, service providers in the CIS generally specialised in one specific service, such as handling only road haulage or air freight exclusively. However, there's now a more integrated approach, diversifying their services and specialising in multiple activities. Moreover, operationally, modern and reliable equipment is now prevalent, replacing outdated machinery which stopped working every three and a half minutes, which is a notable and positive change.
Thirdly, there has been a change in mentality, especially with the newer generation starting to take leading positions within companies. Unlike in the past, where the focus was solely on executing transports, the emphasis now extends to customer service. While this progress is still ongoing, it's a positive trend. Additionally, considering the immense size of these regions, spanning over 11 time zones from Europe to Asia, addressing significant climatic and geographical challenges has become more professional.
Lastly, in the 1990s, people primarily spoke Russian and, to a lesser extent, a local ethnic language (such as Kazakh or Uzbek). English language skills were not widespread, and some individuals only spoke German as their 'foreign' language. However, over the last 20 years, the younger generations have witnessed a rapid growth in their proficiency in the English language. Overall, from my perspective, the evolution of the CIS market over the last two decades has been largely positive across various fronts.
Renaud: Doing business with CIS countries has never been easier since the 1990s. It has always been challenging and unique, similar to many other markets. However, despite these challenges, I see immense potential, especially in terms of logistics, owing to the abundant natural resources in the region.
Kazakhstan, for instance, ranks as the ninth largest country globally in terms of land mass, housing about 16 million inhabitants and possessing a vast array of chemical elements, oil, and gas reserves. This abundance positions Kazakhstan as a potentially wealthy nation. Yet, its primary challenge lies in logistics—efficiently extracting and transporting these resources to other countries. Kazakhstan's dependency on moving these resources out of the country presents various options, including routes through Russia, China, the Caucasus and Turkey, and even gateways from the South via Iran or Pakistan.
Amidst these considerations, logistics providers must navigate factors like sanctions and geopolitical situations, such as the ongoing conflict between Russia and Ukraine. Our role as a logistics service provider is to find solutions for our clients, adapting to changing circumstances and exploring alternative routes when necessary.
The recent statement by the Kazakh President emphasising a multi-vector approach toward the global economy aligns with our approach as a freight forwarder. We, too, need a multi-vector logistical policy, adapting and finding solutions that meet our clients' diverse needs.
The market and potential for logistics to and from CIS countries remain substantial. As a logistics service provider, our commitment lies in understanding and addressing our clients' evolving needs, being flexible enough to think outside the box, and discovering alternative routes beyond traditional pathways.
Reloading of Cargo at the China-Kazakh Border; Picture Credit: ABL DISSACO
Renaud: Firstly, I do not think that the “middle corridor”, as it is called, is hype. This historic logistical gateway dates back to the Middle Ages and has maintained its relevance over time. Most recently, the EU, through initiatives like the TRACECA Program, has actively contributed to developing and emphasising this corridor. During logistical crises, such as the recent challenges with high sea freight rates between Asia and Europe during COVID-19 or the disruptions in the Red Sea due to conflicts with the Houthi rebels in Yemen, the significance of the middle corridor and the New Silk Road becomes evident.
The traffic volumes on this corridor surged during crisis time, demonstrating its importance as an alternative route. Its viability owes much to the substantial financial investment by Chinese railway companies and the government, however it is there to stay. The overland transport between Europe and Asia has proven its worth, standing beyond mere hype.
And, of course, there are other gateways that we have been using. So let's not forget in addition to the East-West corridors, there are also the North-South corridors. It extends from the Middle East, passing through Iran, Turkmenistan, Uzbekistan and up to Russia. However, this corridor has been at somewhat of a standstill and has faced obstacles due to various issues, including geopolitical tensions for example with Iran. Nonetheless, we should still keep this in mind, not to mention this is also a UN project. Additionally, the route through Pakistan via the Karakoram Highway serves as an alternative gateway to the CIS, while challenging, it remains viable.
Nowadays, we also see more and more cargo moving from Southeast Asia via land corridors to the CIS, for instance, from Vietnam to China and then to the CIS overland. As a consequence of the actual Russia-Ukraine war situation, much cargo passes via Turkey or Poti over the Caucasus region and the Caspian Sea into Central Asia. So, as per the last questions, there are all historic routes. The middle corridor is there to stay, but alternative routes via the Black Sea and Poti, or the Marmara Sea and Turkey, or Iran or China continue to play a significant role in reaching Central Asia.
Renaud: ABL operates as a licensed customs broker and is AEO certified with qualified staff on the team, although our focus isn't on selling customs brokerage as an independent service. Our customs activities are seamlessly integrated with our transportation, logistics, and warehousing services. Consequently, we provide customs services solely as an extension of our other logistic import, export, or warehousing services. This approach aligns with the complexity of customs services, a facet we aim to handle for our valued customers without marketing it as a standalone service in the industry.
Primarily, our customs activities revolve around supporting and enhancing our transport services. For instance, we operate a weekly inbound container consolidation service from the US, consolidated in Chicago and deconsolidated at our Antwerp warehouse. We then render our customs services for the incoming cargo on those containers. Moreover, we have an in-house consolidation service catering to Maghreb countries, particularly Morocco and Tunisia, with occasional operations in Algeria. Here, our colleagues also provide customs services linked to our export products to these destinations. Lastly, our team also extends customs support as an added value to the project cargo shipments that go via our hub in Antwerp port or any other European port where fiscal representation is needed.
While we possess our own AEO license service, we occasionally collaborate with third-party customs brokers when we find it more suitable than utilising our in-house AEO license service. This flexibility allows us to cater to the diverse needs of our long-standing clients without promoting our customs services as a standalone offering.
Picture Credit: ABL DISSACO
Renaud: The warehousing scenario at the Port of Antwerp reflects the broader situation across European ports concerning terminal and warehouse space, if not being more exacerbated due to its centrality. During the pandemic, Antwerp's warehouses were full, terminals were full and congested, vessels experienced delays, and detentions accumulated due to the inability to discharge upon arrival. Fortunately, this situation has normalised now.
Congestion at terminals and warehouses benefits no one; these spaces thrive on turnover and swift cargo movements. Thankfully, our situation has improved. Cargo rotations have normalized, aided by our successful in-house import service from the US, ensuring consistent cargo flows into and out of our warehouse. Similarly, exports to North African markets, including car spare parts and mining equipment, witness rapid turnaround times at our Antwerp warehouse.
Post-pandemic, local operations have seen a significant improvement. There are no lengthy waiting periods, and cargo movements in and out of the warehouse maintain a steady, swift pace. Overall, the situation has vastly improved since the pandemic, bringing relief to us and our operations. Thank God!
Reloading of Cargo at the China-Kazakh Border; Picture Credit: ABL DISSACO
Renaud: The unfortunate ongoing situation in the Red Sea is significantly impacting ABL's operations, especially in shipments and projects on the Europe - Far East trade lane. Our services connecting via the Black Sea and the Marmara Sea to Central Asia have also to an extent felt the crunch as several services from Antwerp go via the Mediterranean Sea which has seen reshuffled timetables.
However, as we often say crises breed opportunities. While closely monitoring the developing situation in the Red Sea, we are actively exploring alternative solutions for our clients. For example, in response to longer transit times and rising ocean freight rates of services rerouting via the Cape of Good Hope, there's a notable increase in redirecting cargo through the New Silk Road rail route between Europe and China. This emphasises the significance of closely monitoring situations and remaining open to alternative solutions. In times of unfortunate crisis, our priority continues to be serving our clients efficiently and effectively by staying vigilant and adaptable to any challenges that may arise.