When Maksim Shkil, a student of the Lviv Academic Gymnasium, was delivering mineral water around the Lviv region on vacation, a long journey could be already predicted for him.
Later, in the same company, Maxim will be in charge of sales, and will drive 186 thousand km a year around the country, a rare taxi driver could manage it.
With time, this way will become the “realway” for Shkil. Today he is at the top of the company, thousands of cars of which carry millions of tons of grain around the country.
To found the First Logistics Company (FLC) and several other successful businesses, for example, Audi dealership, its owner forged his iron character from a young age.
For example, the fact that his father owned the company where he worked as a loader and then as a forwarder was hushed up. Only having tested his son at a common labor, Shkil Sr. entrusted him with the management of sales.
Then Maxim made his way without the help of his father. Successfully hard studying, which gave the future businessman a higher linguistic and legal education, was led him to a granite quarry. It was the first company he created.
The construction boom of the 2000s required a lot of broken stone. It had to be exported in huge volumes, including other countries. The problems of the Ukrainian railway prevented this, mildly speaking.
And the owner of the quarry solved the problem of transportation once and for all, having disassembled it, as he says, “into molecules”. As a result, he created a transport empire from the usual logistic department.
On the Right Foot
The table in Shkil’s office is always clean. He visits it rarely, but right on target. “The office work takes me a maximum of two hours,” he says. “Then, traveling on business takes another 2-2.5 hours a day.”
You can do work anywhere, Shkil is sure. Because now we have smartphones, Skype and other means of communication.
The FLC has 10 representative offices in Ukraine, and it is just impossible to communicate with everyone at the same time, the main thing is streamlined management.
But Maxim’s office is not an empty place. Its walls are decorated with oil canvases with the views of his native Lviv, and watercolor pictures of his children, girls 6 and 8 years old.
The elder one is a quiet type, the younger one is restless. Usually, she gets every weekday of her dad started. “Emilia gets up at 6 am and wakes everyone up. At first, I come to her to say “good morning,” says Shkil. “Then I prepare my gym bag and food for a Muay Thai workout.”
“Since the founding of the First Logistics Company, we have been working with almost all international companies
present in the Ukrainian market.”
Maxim disarms everyone with his sincere kind smile. You can’t say that four times a week he becomes a formidable fighter on a tatami.
“For me, this is a release of negative energy,” Shkil reveals the secret of samurai peace. You can’t take out your discontent on friends, subordinates or family.
When there is no workout, and he also does cross-fit and stretching, Maxim with his wife and children try to arrange family breakfasts. Anyway, at 9.15 Shkil in the workplace.
The most intense stage of his day begins, the management of a huge economy, moving simultaneously in all directions of a large country.
In the middle of summer, there is a hot season for farmers, and therefore for the FLC. Elevators are filled with grain and its products, receiving points, export contracts are concluding. And the FLC sends goods to Ukrainian ports and border crossing points.
“Since the founding of the “First Logistics Company, we have been working with almost all international companies present in the Ukrainian market, including American ones,” says its owner.
The company can satisfy the demands of the leading grain traders and manufacturers, the FLC has 40 its own cars and about 1 thousand are in long-term subleasing.
There are no elevators or stations in the country unfamiliar with the FLC
The largest customers of First Logistics are MHP, Kernel, CHS Ukraine, NIBULON, the EpiCentre K group of companies and almost all of the leading companies on the agricultural market. Over 200 customers in total.
Once a month or two, manufacturers hold tenders for logistics companies, and at this point it is important for farmers to choose a reliable logistics company.
If the tender is won by the firm that once let them down, they will even agree to a higher price, but for the partner who fulfills the obligations.
Why the FLC is such a partner, Alexander Pirogov, the operational director of the First Logistics Company, explains convincingly.
“We have branches and representatives working in all regional centers without exception,” he says. “The people there already know all the elevators and shipping stations. If some elevator is being built, we are already analyzing the upcoming work on it. ”
There are no elevators or stations in the country unfamiliar with the FLC, says Pirogov. This is not surprising: “First Logistics” prefers to hire specialists who have already worked in the “Ukrzaliznytsia” (UZ).
Pirogov is one of them. After the Kharkov Railway Academy, he worked as a foreman at the UZ. This was a great recommendation for getting a job in the PLC. Having started here as a regional manager, in four years, Pirogov was promoted to operating director of the company.
For the FLC staff is important to know the principles of operation of UZ from big to the smallest details because it transports 70% of agricultural cargo, and it owns the entire infrastructure, in conditions of which private companies have to work.
Nevertheless, 30% of private carriers shows a growth trend, in recent years, Shkil is sure, due to better service. But while the logistics business has to play by the rules of UZ, and for this, the iron will is needed.
“As for the roads, today we live and work in the post-Soviet space yet,” says the owner of the FLC. “And the state of the Ukrainian roads is one of the worst among the post-Soviet countries.”
The problem of a shortage of rolling stock, locomotives, and poor operation of the stations has been rooted for years, but it is wrong to blame only the current management of UZ for everything, the owner of the FLC believes. They cannot resolve all the problems at once.
“The current Ukrainian railway logistics need to focus on two things,” says Shkil. “The purchase of rolling stock and the modernization of the existing traction.”
In addition, in the main sections of the track, the average speed of the train today is 30-40 km/h, and this speed needs to be increased by means of system solutions because it seriously affects the turnover of cars.
In the high season, the “First Logistics” has in turnover 4-4,5 thousand cars per month. This indicator depends on the stable operation of marshaling yards, shunting locomotives.
“Unfortunately, it is getting worse every year,” notes Pirogov. Therefore, the turnover is not growing, and in order to increase efficiency, private business is forced to increase shipments and its own fleet, and to improve service.
But even in such conditions, the FLC increases traffic volumes by 20-25% annually.
The Train Started Moving
However, the new leadership of the UZ, despite the burden of historical problems that have fallen on it, is trying to work with the business.
For example, instead of the manual, they introduced an automatic rolling stock distribution system. This excludes the corruption component from the process.
Carriers now work in market conditions, and to improve service, they only need to increase their rolling stock and have a reliable dispatch center.
“As soon as an application arrives, for example, from a holding, we can respond to our counterparty within 15 minutes”
Moreover, private traders can now increase their fleet, again thanks to UZ, adds Shkil a little of a good thing in all these bad road problems.
“Ukrzaliznitsya” introduced a daily rate for renting its cars, and made the price almost commercial: 780 UAH against 1000-1100 UAH per day at logistics companies.
Previously, the difference was as much as 1200 UAH in favor of UZ, and customers went there, even despite the shortage of cars, the head of the FLC emphasizes=
But today, a manufacturer thinks carefully what is more profitable: to conclude a contract with a private carrier, that would fulfill it at UAH 200-300 more expensive, but on time, or with the UZ.
In general, with such pricing policy UZ has enabled private logistics companies to develop, Shkil sums up.
Center of Attention
Now a lot depends on the ability of logistics companies to conduct business, FLC leaders believe. For example, its operational office in Vinnytsia is a center that automatically plans, coordinates all the shipments around the country with the road, prepares transportation documents, keeps registers.
“As soon as an application arrives, for example, from a holding, we can respond to our counterparty within 15 minutes,” says Pirogov, “about the readiness of the elevator, the volume of goods, the availability of rolling stock, the condition of the access road, the nuances of the station’s operation.”
Simultaneously with the analysis of the implementation of the order, the office prepares the certification for any contract requirements: GMO protocols, safety indicators, veterinary and phytocertificates.
“As a result, when the customer arrives at us with a cargo, we are ready for everything, and he starts his journey with all the documents needed,” Pirogov adds.
To understand how the founder of the First Logistics managed to build a perfect mechanism, you need to know the background of the company and the nature of its founder.
People Made of Granite
“From my childhood, I had a great desire to earn money,” says Shkil. “Later, I realized that I got great pleasure from work. My parents taught me to work hard. Every summer on school holidays, I worked as an ancillary worker at a construction site. ”
Maxim’s entrepreneurial talent was seriously revealed at the mineral water plant when he increased sales there by 10 times in one year. The sales manager at that time was only 20.
Probably, only the young age did not allow the father to give his son a share of the plant. However, he was ready to start his own business.
To finally turn this page, Maxim went to conquer Kyiv. After a persistent search for “his” project, he chose granite, in the early 2000s its fields were being developed in Ukraine.
Shkil acquired several granite plots in the Zhytomyr region. The place was not the best. It the Chernobyl zone, nobody to hire, and bad-established access roads.
But on the other side of the scale was the “crazy” profitability of broken stone production, 200-300% for 1 ton.
“The cost was 30 UAH/t, and the selling price was over 70 UAH/t, Shkil recalls. “One dollar cost 5 UAH at that time, and we earned $ 10 per ton. Today, there is no such profitability in this industry.”
Together with his partner from Germany, Walter Zaharias, they revived the actually abandoned enterprise “Bekhovsky granitniy kar’er”.
There were many problems there, but the most acute was logistics, which Shkil undertook. To figure out who is who in the market of transport services, it took him 90% of the working time.
And to arrange transportation without a special staff was impossible. This is how the First Logistics Company was born.
“I suggested this name, maybe because of my desire for leadership in everything and the habit of doing my job efficiently,” Shkil recalls. “At some point, while developing the company, we completely fulfilled the needs of the “Bekhovsky granitniy kar’er” in rolling stock, and realized that our “First Company” had a big potential.”
Up and Down
The FLC market share is growing every year. A rare company in Ukraine as such a volume of rolling stock, as the FLC. Now it is rapidly replacing leased cars with their own, new ones.
Shkil considers such tactics economically far-sighted. There is simple math. The cost of 1 used car, like that of UZ, is up to $30 thousand, and they have served for a quarter of a century. They can ride without problems, at a maximum 5-10 years more.
A new car, even though it costs $ 50 thousand, has a service life of 30 years, and even 35 with a prolongation. In addition, an old car, unlike a new one, has less than the declared capacity of 70 tons. But, for example, only 62 tons of corn can be loaded in it.
In addition, modern multi-cab cars are equipped with much better protection against theft.
“A customer needs to understand that our company lives by fulfilling the tasks that he sets in the logistics field,” the FLC head explains the company’s philosophy. “that is, our company shares and cares about them.”
It is also important to tell honestly about all possible problems with transportation so that the client could go to someone else and diversify his risks.
By the way, business is always a risk, especially in Ukraine. The FLC owner protects himself from risks, having several other businesses.
At the same time, Shkil makes risky decisions with no hesitation. In the FLC, they do not think over each step for months, getting rid of the bureaucratized processes as much, as possible.
“An ordinary employee can contact me, come to my office and discuss any production issues. And the personal issues too, financial aid or a medical treatment,” says the owner of the FLC.
The trusting atmosphere is very important for the First Logistics, and this is one of the rules of success for Shkil himself.
“When you are going up, look carefully at those who are going down”
The phrase: “I said that because I am the owner”, in his opinion, is unacceptable. You need to understand and be able to listen to the leaders of your departments, sometimes making decisions that are not financially effective but are correct for the atmosphere in the team.
“It should be like in a family,” Shkil specifies. “If people feel this, they will do their best for the company.”
You can not lie and work with people who are insincere, who do dirty business, it is his another immutable rule of doing business. You need to know how to choose partners.
And it is desirable to help everyone who appeals to you, employees, friends, acquaintances. It seems to be a simple commandment, but it also affects the promotion of business, the head of the FLC is sure.
“Your help creates synergy outside the company and around you,” he explains. “Everything in life is interconnected, not by chance.”
At least, no money and no success can allow a businessman to break moral taboos, Shkil is convinced. One way or another, everything will have to be paid for – if not by you, then by your children.
“One of my friends, who used to head the regional court for more than 20 years, told me the words that I’ll never forget,” concludes the head of First Logistic Company with wise advice. “When you are going up, look carefully at those who are going down.” Because the tables can turn around very soon.”