Cost-effective Transportation
Samsung Electronics Co. seeks to innovate transportation logistics services using the Trans-Siberian Railway (TSR).
Samsung Electronics and Russian Railways signed a memorandum of understanding (MOU) for collaboration on the TSR Project in Moscow on October 17 (local time).
With the latest MOU, Samsung Electronics will shift from marine transportation to rail transportation via the TSR when transporting materials and end products from Korea or China to Eastern Europe.
Since January this year, Samsung has been delivering the components and materials produced at its plants in China to the Kaluga factory in Russia, where TVs and washing machines are manufactured, through the TSR and the Trans-Manchuria Railway (TMR).
Compared to the existing marine transportation, the railway system shortened the lead time from 50 days to 18 days and saved logistical costs, according to the company.
Additional routes included in the MOU are routes to European countries as well as Russia. When Samsung's manufacturing facilities in Korea and China deliver products and materials to Vladivostok, Russia, by ship, the containers will be transferred via the TSR to European countries such as Slovakia, Hungary, and Poland.
Compared to the existing marine transportation, this route will drastically reduce the lead time from 35 days to 18 days. Shortened lead times will bring Samsung Electronics more benefits, including stable inventory control and immediate and efficient adjustment when product models change as well as logistical cost reduction.
This project exemplifies practical business collaboration which incorporates the concepts of Russian ‘New Eastern Policy’, Chinese ‘One Belt One Road’, and Korean ‘Eurasian Initiative’ and utilizes Eurasian logistics networks.