Case Study


18 pages
September 2008
Reference: IMD-3-1929

This case describes a Russian shipping and transportation company, FESCO, from its early days as a state-operated shipping company, focusing on the Russian Pacific trade from Vladivostok, through to its privatization under the new majority ownership of Sergei Generalov, former Russian minister of fuel and energy. It subsequently diversified into rail services and terminals and expanded its shipping operations from the Russian Pacific to the Baltic and Black Seas. FESCO became a key logistics player in the rapidly growing Russian market. The case also focuses on how the ownership mix changed in order to raise the necessary capital for expansion.

Learning Objective

The learning objective of this case is two fold. First, the case shows how a particular shipping business – container shipping – might become further strengthened through integration with rail, terminals and other shipping line services. Second, the case illustrates how FESCO’s portfolio strategy remains vulnerable because of its dependence on the state of the Russian economy and legislators, despite an impressive on-paper diversification.

Field Research
© 2008
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