Text5: Joint Stock Company Russian Railways

In the past Russian railways were built as part of the national development plan for strategic and security reasons. The system entirely belonged to the Railways Ministry, a state within a state. It was completely owned, regulated and operated by the government. However, the funds from the government became insufficient to keep the railway in good operating condition. In response to the increasing needs of economy, the system was completely renovated.

Reforms started in September 2003 with the establishment of the joint stock company Russian Railways (RZD). The Russian Federation became the only shareholder of the company and delegated shareholder control to the Government.

Being a large monopoly of vital strategic importance, JSC Russian Railways is regulated by several governmental bodies with different functions. Thus, the Ministry of Transport and Communication is responsible for the regulation and licensing of the railway industry. The Ministry of Economics Trade and Development approves RZD strategic plans and the key budget parameters. The Federal Tariff Service answers for the tariff policy and electrification of the railway industry. The Ministry of Finance is responsible for taxation and subsidies.

JSC Russian Railways is the sole owner and operator of the railway infrastructure in Russia. The company's assets include track depots, stations, switching facilities and dispatch centres. The company has the largest freight rolling stock and operates all the passenger service rail assets. It has the largest locomotive fleet.

RZD is constantly expanding and upgrading its domestic and international services. The company provides maximum comfort and reliability for all passengers, including new rail-air links, luxury compartments and suburban transit trains.

The new high speed Sapsan trains are the pride of the company. The trains were developed by Siemens specialists with the involvement of RZD representatives and higher education institutes. The Sapsan trains fully comply with the Russian Federation safety standards. Their design ensures reliability, energy, efficiency, safety and comfort for passengers and personnel.

Nowadays RZD is successfully integrating into Eurasian transport infrastructure. Russian railways cooperate with European and Asian railways and have common routes with them.

Questions for discussion:

1. How were Russian railways managed in the past?

2. When and why was JSC Russian Railways established?

3. What governmental bodies regulate JSC Russian Railways?

4. What corporate structure does the company Russian Railways have?

5. What are RZD assets?

6. Why do you think RZD is a company of vital strategic importance?

7. What does the company Russian Railways provide for passengers?

8. Who worked on the project of the Sapsan trains?

9. Why do you think the Sapsan trains are fully reliable and energy efficient?

10. How is RZD integrating into Eurasian transport infrastructure?

 

Text 6. Railway Reforms in Russia

In 1991 the Soviet Railway System broke into the individual national railways of CIS countries. The Ministry of Railways remained the only structure in Russia to control state regulations and economic activities of Russian railways. However, severe competition between other transport modes and railways made the latter completely renovate their system. It became clear that successful reforms in the railway sector required separating regulation from business. In 1998, President Yeltsin approved a concept for the structural reforming of the Federal Railway Transport. It consisted of three different phases.

Phase I was completed in the autumn of 2003, with the establishment of the Joint Stock Company Russian Railways (RZD). The company assumed the assets and the functions of the former Ministry of Railways.

RZD primary mission is to satisfy the market demand in transportation services, to increase effectiveness of operations and to improve the quality of services. Much of this work is still to be done.

Phase II is close to completion. RZD is forming multiple subsidiaries for passenger service, non-core business and refrigerator transportation. Retaining its monopoly on infrastructure, locomotive fleet and freight business the company is phasing out cross-subsidies from profitable freight operations to passenger service.

Phase III is a subject to modification, depending on the industry condition. However, its task lies in selling operating licenses for selected passenger services and independent operators. RZD is planning to increase competition from private rail operators through partial privatisation of Russian railways or some of their enterprises.

Safe control and supervision of the national railway usage is ensured by the Federal Law of Management and Disposal of Railway asserts.

Questions for discussion:

1. What happened to the former Soviet Union Railway System?

2. What was necessary to do for successful reforms in the railway transport sector?

3. What concept did President Yeltsin approve?

4. What happened in the autumn of 2003?

5. What did Russian Railways get from the former Ministry of Railways?

6. What is the current mission of RZD?

7. What are the main targets of Phase II?

8. Why is Phase III a subject to modification?

9. What is the main task of Phase III?

10. What is RZD planning to increase?

Text 7. Logistics

Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is geographical repositioning of raw materials, work in process, and inventories. They are required at the lowest cost.

Logistics as a concept evolved from the military's need to supply the Armed Forces moving from their base forward. In ancient Greek, Roman and Byzantine empires, there were military officers with the title “Logistikas”. They were responsible for financial and supply distribution matters. Military logistics first appeared in the 19^th century. However, only in World War II logistics theory and practice became sophisticated. As the conflict was carried out with an unprecedented deployment of personnel, equipment and supplies, logistics played a central role in ensuring success for the Allies. Logistics as its own concept in business appeared only in the 1950s. This was mainly due to the increasing complexity of supplying business with materials and shipping out products in an increasingly globalised supply chain.

The main functions of a logistics manager include purchasing, transporting, warehousing, organising and planning. Logistics managers combine general knowledge of each function to coordinate the resources of the organisation. There are two fundamentally different forms of logistics. The first one optimises a steady flow of material through a network of transport links and storage nodes. The other coordinates a sequence of resources to carry out some projects.

Questions for discussion:

1. What is logistics?

2. What integration does logistics involve?

3. How can you describe the operating responsibility of logistics?

4. What did logistics as a concept evolve from?

5. What did the word “Logistikas” mean?

6. How can you characterize the role of logistics in World War II?

7. When did business logistics appear?

8. What factors caused the appearance

9. What are the primary functions of a logistics manager?

10. What are the main forms of logistics?

 

Module V: Ecology

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