INTERNATIONAL INSTITUTE OF LOGISTICS AND BUSINESS

«SILK WAY»

«THE BELT AND ROAD INITIATIVE»

is the global trend of economic growth. The role

of Kazakhstan.

Iskaliyev Yerkhat Serikovich, DBA, MBA, PhD

- Member of Institute “SILK WAY“ Board of Trustees - Director of Department "Transport and Logistics" Sovereign Wealth Fund"SAMRUK KAZYNA" JSC

- Member of Presidium Transport Union of Kazakhstan "KAZLOGISTICS"- Chairman of transport logistics Subcommittee under NEC “ATAMEKEN" Astana, 2017

This principle was voiced by the Head of State

during the 25th plenary session of the Foreign Investors

Council and is a competitive advantage of the project

"Kazakhstan - New Silk Way".

The basis of the new economic policy will be the

plan for infrastructure development, which is primarily

focused on the construction of transport and logistics

routes, which in future should adequately meet the needs

of the economy and population in the freight and compete

successfully in world markets.

One of the tools to ensure international standards

of logistics services is the implementation of the

"principle of 5S" - speed, service, cost, safety and

stability.

Kazakhstan as a facilitator of «New Silk Way»

President of the Republic of Kazakhstan Nazarbayev N.

2

“Kazakhstan must rebirth its historical role and become a

huge business transit hub in the Central Asia region, so called

bridge between Europe and Asia…

“This is a creation of single complex of international level,

based on key transport routes of Kazakhstan. The results of

realization of this Mega-project until 2020 year are value of

transit shipping through Kazakhstan must double grow with

continued achieving to 50mln tones”.

President of the Republic of Kazakhstan

Nazarbayev Nursultan

“The establishment of an "economic corridor of the Silk

Road" conforms to the fundamental interests of China and

Kazakhstan. I hope that both sides will take advantage of the

historic opportunity to strengthen the role of cooperation

between China and Kazakhstan in the promotion of cooperation

in the region through the Silk Road"

President of the People's Republic of China

Xi Jinping

The bridge between Europe and Asia

The meeting of Presidents of the Kazakhstan and China

3

The art of teaching the

success

consulting

research

implementationoutsourcing

training

CONCEPT OF THE

INSTITUTE

+ 7 7 0 8 5 2 0 0 0 0 9

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institute.silkway@gmail.com

Info.institute.silkway@gmail.com

Institute SILK WAY

institutesilkway

institute SILK WAY

Center for the development and

implementation of

SCM (Supply Chain Management)

and Innovation

School of Business

Research center "Silk Way"

International center for

investment attraction

Centre of Certification and Human

Resources management

www.e-academy.kz

www.e-forum.net

Education - Training - Certification for the following areas:

-logistics (warehousing, procurement, manufacturing);

-business (with advanced educational systems and technologies)

-service (restaurants, hotels, service improvements and increase

the quality of the front-line staff)

Short-term courses, workshops, seminars, online training, master

classes.

Complex optimization of the enterprise, production and logistics

audit, increase of production efficiency, warehouse, shipping and

transport optimization , project management, organizational

development of the company.

Research of forecasting, transport and transit, production, new

technologies efficiency in cooperation with scientific institutions of

Europe, Russia and China.

Managing financial instruments, assistance in projects structuring

and research, creating of business incubators, investors attraction

Certification of specialists in the field of logistics and transport in

accordance with professional standards (European Logistics

Assosiation, IATA, FIATA, IRU, IMO).

Educational programs are placed on the platform and designed in

collaboration with educational institutions, consulting firms and

business coaches.

Оn-line platform for forum and conference

Our partners

INTERNATIONAL INSTITUTE OF

LOGISTICS AND BUSINESS

«SILK WAY»

www.institute-silkway.com

Industry Engineering

Management CentreIntroduction of SEM (Systems Engineering management), technical

and technological improvement of a company, technical support

22

DYNAMICS OF THE FOREIGN TRADE

The neighboring countries external trade volume by 2020 year, bln USD

2011 2020

bln. USD

China ЕU 567 800

Russia China 83,5 200

Turkey China 24 100

Russia Central Asia 42 60

Russia China 22,5 40

The global transit air freight with the direction China – Europe

is forecasted to reach 17 mln TEU by 2020 (170 mln tons), in

2010 -11,7 mln TEU (117 mln tons).

The growth of freight - 45%.

Kazakhstan is aiming to attract 8% of this cargo flow (1,5 mln

TEU, 15 mln tons)

China

Russia

European Union

India

Middle

Asia

Kazakhstan

$739 billion $1 200 billion

2011 y. 2020 y.1,6 times

Growth of trading volume

Kazakhstan on the way of global trade

4

Moscow

RUSSIA

ICELAND

Krakow

Barcelona

Valencia

Antequera

Karagandy

Aktau

MONGOLIA

INDIA

AFGHANISTAN

PAKISTAN

MYANMAR

LAOS

THAILAND

PHILIPPINNES

Kaohsiung

Taipei

Daegu

Pusan

Hakata

St. Petersburg

Beijing

Tangqing

Birmingham

London

Orense

Cordova

SPAIN

Helsinki

Malme

Stockholm

POLAND

Warsaw

UKRAINE

Florence

Rome

Napoli

Guangzhou

Kharbin

CHINA

DalianSeoul

Qinghai

HangzhouChengdu

Milano

WuhanIRAN

IRAQ

ОМАН

YEMEN

SAUDI ARABIA

EGYPT

SYRIA

TURKEY

LYBIA

ALGERIA

TU

NIS

Medina

Мекка

Джедда

Kunming

Urumqi

KAZAKHSTAN – NEW SILK WAY

Zhezkazgan

Shubarkul

Kostanay

Poti

Auto/m, r/w

Alashankou

KAZAKHSTANNaushki

Zabaykalsk

Nakhodka

Sarakh

s

Bender-Abbad

Beyneu

ASTANA

Shalkar

Petropavlovsk

MUMBAI

RoutesDistan

ce km

Travel

time, days

North TARM (Lianyungang-Dostyk-Petropavlovsk-Brest-

Hamburg) 11 516 11-13

Central TARM (Lianyungang-Dostyk-Astana-Ozinki-Brest) 9 654 12-14

South ТАRМ ((Lianyungang-Dostyk-Sarakhs-Rаzi-Istambul) 10 989 20-23

North-South (St. Petersburg-Aktau-Amirabad-Bandar

Abbas)6 191 13-15

Chongqing-Duisburg 10 769 15

TRACECA (Lianyungang-Dostyk-Aktau-Baku-Poti-Istanbul) 10 648 20-23

Transsiberian (Nakhodka Petropavlovsk-Helsinki) 11 060 18-20

South Sea Route 23 000 45-60

Kashgar (China) - Osh (KRG) - Herat (Afg) 6 010 17-20

Ekaterinburg

Uzen

BereketKars

Ahalkalaki

Dostyk

Tra

ns

Ka

za

kh

sta

n

rou

tes

Saryagash

Makat

Гамбург

FRANCE

Paris

Gerat

Ozinki

JAPAN

S.KOREA

PHILIPPINES

TAIWAN

Malaysia

Siman

Shenzhen

Duisburg

Istanbu

l

KYRGYZSTAN

Chabakhar New-Delhi

Khorgos

Zakhedan

Ahvaz

Tehran

Mashhad

Astara

Khaf

UAEIndiaYemenOmmanQatarSaudi

Arabia

Iletsk

Aktob

e

Saksaulskaya

Shymkent

Jetigen

TAJIKISTAN

Almaty

Farab

GERMANY

BRES

TSlawkow

Gorgan

BAK

U

Khosravi

Amirabad

Abu-Dhabi

UAE

Dubai

Shanghai

Chongqing

Lianyungang

Constant

a

Tebriz

5

reverse traffi

Kunming

Bangkok

Yangon

Bender-Homeini

Kishinev

Praha

Helsinki

Saint Petersburg

Kandalaksha

TLC and hubs on the

territory of the RK

TLC and hubs in foreign

countries

Gravity cargo for

distribution

The direction of traffic

after the distribution

Murmansk

Arkhangelsk

Vanino

Ulan-Bator

Chita

Beijing

Vladivostok

Dushanbe

Ussuriisk

Changzhou

SeoulPyongyang

Pusan

Transcontinental corridor "Western Europe -

Western China"

Deli

Dhaka

Kuandzhu

Omsk

Alma-AtaUrumchi

Bishkek

Bucharest Rostov-na-Donu

AnkaraSarakhs

Turkmenbashi

Dubai

Tallinn

Klaipeda

ShymkentTashkent

Konstanca

Поти

Tbilisi

Kiev

Quryk

Amirabad

BakuGorgan

Bender-Abbas

Qaragandy

Astana

Aktobe

Aktau

Direction of reverse

traffic

Agent network

Ust-Luga

Ekaterinburg

Moscow

TLC and hubs in the

TC

Minsk

Berlin

Warsaw

Budapest Odessa

Transport and Logistics

Cluster

Novosibirsk

Krasnoyarsk

N.Novgorod

Novorossiisk

Kaliningrad

Ulan-Ude

Khabarovsk

Chingqing

BurgasSofia

DuisburgSemey

Dostyk

Khorgos

Istanbul

Samara

Tehran

Ashkhabad

Liayungang

Riga

8JSC «NC «KTZ»

Strategic positioning of Kazakhstan by 2020

20

A high potential in developing China – EU transit through Kazakhstan

6

Length Time Cost

Comparison of routes from

Chongqing to Duisburg

~ 20 000 км 45-60 days $5 600Via sea

Via

railway

through

Dostyk

~10 700 км.

21 days

16-17 days

(after optimis.)

$9 200

$8 100

(after

optimis.)

Via

railway

through

Zabaykal

sk

~ 12 800 км. 32 days. $ 11 200

Better deal

Eastern provinces of China may utilise rail transport over sea routes

7

Total LPI rating of Kazakhstan

Quality of infrastructure(ports, railways and motor

roads)

Simply organization of international

transportations

Competence in logistics (transport operatorsand

customsbrokers)

Possibility to monitorcargos

(SCM)

Kazakhstan

2,7577

Russia 2,57

99

27

Uzbekistan 2,40

118

65

94

23

91

82

130

92

27

116

72

5

Germany 4,44

6

Kazakhstan

2,76

Uzbekistan 2,45

Russia2,43

12 China 3,70

Kazakhstan

2,75 Kazakhstan

2,57

Russia 2,76

Uzbekistan 2,39

5

Germany 4,23

Singapore 4,14

1

Singapore 4,20

1 1Germany 4,28

1

Singapore 4,09

5

71

28

143

90

China 3,68

Kazakhstan2,86

1

G 4,

Singapore 4,05

10

Panama 3,34

40 Malaysia 3,45

Slovenia 3,20

33 44

8 Germany 3,86

Ukraine 2,74

80 84 Ukraine 2,49

92

31

114

87

China 3,90

Kazakhstan

3,0

Russia 3,15

1

2

Compliancewith cargo delivery terms

Singapore 4,40

6

Customs efficiency (speed, easy, predictability)

86

Uzbekistan 1412,05

31

114

China 3,32

Kazakhstan

2,52

Singapore 4,18

1

many2 Ger

4,12

116

3

54

95

61 Ukraine 2,96

95 Ukraine 2,55

130 Georgia 2,35

Georgia 2,17

128

Uzbekistan 2,83Georgia 2,80

117

Ukraine 2,59

Russia 2,45

Uzbekistan 2,36Georgia2,35

131

Russia 2,62

Georgia 2,44

112

Uzbekistan 2,32

Ukraine 2,30Georgia2,26

Russia 2,01

118

Georgia 2,08

146

China 3,66

Lithuania 3,63

29

China 3,75

Lithuania 3,57

27

Lithuania 4,14

17

Lithuania 3,49

31

Lithuania 3,6827 Lithuania

3,4228

30

Turkey 3,42

34 Turkey 3,49

31

Turkey 3,75

Ukraine 3,51

40 Turkey 3,41

35

Turkey 3,39

43 Turkey 3,18

36

China 3,62

Lithuania 3,49

36

Luxembourg 4,80

Germany 4,45

Luxembourg 4,24

Singapore 3,96

Sweden 4,38

ermany 27

LPI index of Kazakhstan indicates the development of logistics

Turkey3,31

8

21- Improvement in comparison with the

previous year

- Worsening in comparison with the previous

year

¼ Indices 2007 2010 2012 2014 2016

Place Place Place Place Place

Logistic performance index 133 62 86 88 77

1 Quality of infrastructure 137 57 79 106 65

2 Compliance of delivery terms 120 86 132 69 92

3Easy organization of

international commodity

deliveries

129 29 92 100 82

4

Possible to monitor

commodities throughout the

deliverychain116 85 70 81 71

5 Efficiency of the customs authority 139 79 73 121 86

6 Competence in logistics 126 73 74 83 92

LPI positions for 2007, 2010, 2012, 2014 and 2016

9

Speed

High speed and stable

timing of passing

through the whole

route

ServiceHigh level of service

allowing to minimize the

involvement of a

consignor in the process

of transportation

CostService cost cutting as

a result of cutting the

unproductive expenses

(minimization of

ineffectiveness)

Security

The security of cargo

provided by the

traceability of goods

through the whole

transportation route

Stability

Provision of key

parameters of the route

directed to increase the

effectiveness of freight

forwarding

13

JSC «NC «KTZ»

Principle of 5S logistics

10

1) Speed and Cost = key performance indicators and have the desire to

optimize the multi-directional, are the basis of competitive advantage in the

implementation of transit potential.

2) Service and Safety = must always gravitate in terms of the maximum

value, the improvement of these indicators will help win the "battle for transit"

as Kazakhstan is landlocked, the service, the political and economic stability

is the key to success.

3) Stability = important that all parameters were fixed and unchanging in

time and only tended to improve as much as possible (principle better

stability than the cheap) logistics business plans for 5 years.

5 S = Speed + Service + Safety + Cost + Stability

11

Creating effective intergovernmental commissions and working groupsfor the development of a uniform tariff policy for all members of theroute "New Silk Road"

Construction of transport and logistics centers, terminals, creating air,rail and road hub

Joint ventures, the combined company, coordinating councils andothers. Example: JV «YuXinOu (Chongqing) Logistics Co., Ltd» (KTZ, RZD,CHINA RAILWAY), integrated transport and logistics company, theCoordinating Committee for the development of the Trans-Caspianinternational transport route

Provision of logistics services of international standards, the introductionof modern logistics technology transportation and cargo handling,transportation technologies "just in time" and "door to door"

Mutual initiatives

Single tariff policy

Development of infrastructure

The development of logistics service

COMPETITION IS NOT ABOUT THE COUNTRIES, ROUTES AND TRANSPORT MODES– BUT BETWEEN LOGISTICS PRODUCTS!

Systematic issues of route "NEW SILK WAY"

21

Working capacityTransportation

volumeWorking capacity

Transshipment

volume

Production plan

Production capacity

Approach lines shipping

resources

Commercial operations

Spotting/picking

Total production process

Raw delivery variability

Line balance

Cargo owner’s territory Arrival station

Port

Departure station

Capacities

Working capacity

Locomotives

availability

Resources

availability

Working capacity

“Narrow places”

Running time and

scheduled work

Capacities

Technological

processes

Loading plan

Cargo classification

Production capacity

Terminal capacity

Raw delivery variability

Ship supply

Cargo line balance

Railway

Optimization and Coordination

Volume of shipments

and sales. Acceleration

of capital turnover

∑+ > ∑ Costs of additional optimizationservices

Logistician's opportunities

Complex supply chain management

Case: EURAZ– a comprehensive analysis of cargo flows be the method of “Ishikawa diagram”

18

Перевозчики

Low

High Develo

pm

ent o

f rela

tions w

ith a

carg

o s

hip

per

4PL - strategic vision of the development of the logistics

Provision of

infrastructure

Cargo transportation

(2PL*)

Freight forwarding

(Basic 3PL)

Contract logistics

(complex 3PL)

Integrated logistic

(4PL)

SC1 Consulting

Formation of logistic contracts

Logistics procurement strategy, supply

planning

Inventory optimization

Automation

& talent management

Terminals Warehouses

Rails, depots, etc.

Haulage

Rolling stockTrucks

Road networkМор. порты

Bulkers

TankersAircrafts

Airports

Selection of the best transport

routes

Order

management

Land forwarding

Supply

management

Railway transportation Sea transportation Air transportation

Warehouse services2

Land transportation

(last mile)

Land transportation

(main line)

Air and sea forwarding

1. Supply chain consulting 2. Including storage, packing/unpacking, sorting, monitoring of minimum level of inventory, etc.(*) 1PL – all logistic operators (up to transportation) company- cargo owner performs without involving of third party and based on own assets Source: Bryanston analysis

Expected effects of the introduction of SCM tools

from 24 to 37%

from 18 to 36 %

from 7 to 19%

from 5 to 15%

Growth of profit

Reducedcost and time fororder processing

Reducedwarehousestocks

Reduced production costs

Reduced papertransactions

Reduced costs forstocks maintenance

Improved servicequality

Reduced time for order

Reduced productioncosts

Reduced storage costs

Reduced planning cycle

INTERNATIONAL INSTITUTE OF LOGISTICS AND BUSINESS

«SILK WAY»

Republic of KazakhstanAstana, 010000Taulsizdik, 41,

Business Center SILWAYCENTERwww,silkwaycenter.kz

Member of Trustee BoardIskaliyev Yerkhat Serikovich

www.institute-silkway.com

e-mail: institute.silkway@gmail.comiskaliev.e@gmail.com

tel.: +7 /7172/ 55 79 06

mob.: +7 /708/ 518 13 03mob.: +7 /708/ 520 00 09

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