Almaty logistics hub is a key element in getting goods to U.S. troops in Afghanistan03 june 2014, 11:49
There’s an old saying that an army travels on its stomach.
The message of the metaphor is that supplies are a crucial part of a military operation's success. And it isn't just food we're talking about -- it's a lot of other things as well.
Dozens of Kazakhstan businesses have prospered by providing U.S. forces in Afghanistan with tons of goods since May of 2009. That was the month the U.S. military began using the Northern Distribution Network because its Pakistan supply routes had become increasingly susceptible to Taliban attack.
In March of 2010 the international logistics company TWI opened an Almaty hub to coordinate the shipping of goods from Central Asian suppliers to Afghanistan under a contract with the U.S. General Services Administration, or GSA. The partners agreed the hub should be in Almaty because its position as Central Asia’s biggest commercial center means many suppliers are based there.
History buffs will find it interesting that TWI uses some of the same routes in Central Asia’s ancient Silk Road to move goods to Afghanistan.
The Almaty hub is not only providing eight locals with jobs, but it's also giving them an education they couldn't get anywhere else in how to run a world-class supply operation. That knowledge is important to Kazakhstan's future.
President Nursultan Nazarbayev himself has talked about how crucial logistics are to the country's development. In fact, Kazakhstan has been building regional supply hubs in addition to new transportation links such as roads and rail lines.
Luke Fochtman, who runs the Almaty hub, told me in a recent interview that TWI supplies "all sorts of consumer items" to the American troops in Afghanistan. These include items that help them do their jobs -- such as copier paper and toner cartridges -- and items that make living easier -- such as toilet paper, trash bags, plastic dinnerware and Styrofoam cups.
Luke Fochtman heads TWI’s Almaty logistics center. Photo courtesy of Luke Fochtman
Altogether, TWI is buying and shipping 240 to 250 items, Luke said. None are weapons or other military hardware.
TWI is getting most of the items from about 50 Central Asian and Caucasus suppliers, Luke said. "The U.S. government has a pretty broad initiative to buy out of the Central Asian states in order to reduce delivery lead times and take advantage of the developing supplier base," he explained.
About half of the Central Asian and Caucasus suppliers that TWI lined up are from Kazakhstan, with most coming from Almaty, Luke said.
In addition to Kazakhstan, the countries where TWI has sought suppliers include Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Georgia, Armenia and Azerbaijan
This chart shows the value of orders that TWI has made with suppliers in Central Asian and Caucasus countries since 2010 under a U.S. General Services Administration contract. Chart courtesy of TWI
Several suppliers have told Luke that the business they've obtained under their TWI contracts "has been a game changer," taking their operations to another level.
It's also improved their quality, led to them adopting international packaging standards and helped them do a better job of meeting delivery deadlines. The GSA insists that supplies to American military forces be of top quality, be delivered when they're needed and arrive at their destination in good shape.
TWI's shipping operation helps Kazakhstan transportation providers as well as manufacturers, Luke said. All of the trucking companies that carry the goods to Afghanistan are local, he said.
In addition, TWI has made employment part of its local-content philosophy, Luke said.
"Our approach has always been to hire locally within the region," he said. In fact, he's the only foreigner in TWI's Almaty operation.
Luke, who has a bachelor's degree in supply-chain management from Michigan State University in Lansing and a master's in global management from Thunderbird University in Phoenix, Arizona, said he's been lucky to find Kazakhs who were "specialists in the categories we wanted expertise in."
Rita Pershina, a logistics manager at TWI’s Almaty hub, uses a bar-code scanner to keep track of inventory. Photo courtesy of TWI
Most of the locals are in the field a lot, as is Luke, who spends 40 percent of his time outside -- both elsewhere in Kazakhstan and other countries in the region.
"We basically identify a product we need, get samples of the product, ship them back to the GSA for quality approval, then begin ordering them," Luke said.
When products can't be obtained in Kazakhstan, where feasible their parts are purchased overseas for assembly in the country, he said.
TWI has shipped more than 700 truckloads of goods to the 120,000 American service members, government employees and contractors in Afghanistan since its Almaty hub was established.
A truck loading at TWI’s Almaty logistics facility. Photo courtesy of TWI
Before the facility opened, some of the trucks heading for Afghanistan were only 60 percent full, Luke said.
The hub has allowed TWI to eliminate partial shipments by putting different types of goods from different suppliers on the same truck.
Consolidation saves on gasoline, oil and other transportation costs, and reduces the amount that must be paid to truck crews.
Luke said TWI dispatches five to six trucks a week to Afghanistan. Some go through Uzbekistan, others through Kyrgyzstan and then Tajikistan.
To reduce the chance that trucks will be hijacked or destroyed, they drive in convoys with security when they’re in Afghanistan.
"We've been quite fortunate," Luke said, with only one convoy being attacked.
TWI is a privately owned American company with a storied history.
Theodor Wille founded it in Hamburg, Germany, in 1844. The actual name of the company is Theodor Wille Intertrade but these days it’s often referred to by its initials.
The company's website says TWI "has been a leading procurement and logistics company specializing in operating across unconventional and expeditionary markets" for more than 170 years. "Expeditionary markets" includes combat zones, remote oil and gas camps, and other far-flung areas where a dependable supply chain is key to an operation’s success.
Inside TWI’s Almaty logistics facility. Photo courtesy of TWI
TWI It began doing logistics work for the U.S. military in 1998, a year before it became American-owned.
Its base is Zug, Switzerland, close to its Hamburg roots.
In addition to Switzerland and Kazakhstan, it has offices in the United States, Germany, Turkey, the United Arab Emirates, Iraq and Kyrgyzstan.
The Kyrgyzstan operation has supplied American troops at Manas Air Base, a staging area for the forces in Afghanistan, Luke said. Since 2006 TWI has provided food and other items to the troops in Manas. U.S. forces will leave the base in July when a lease agreement with Kyrgyzstan expires.
Luke describes TWI as a "lean and mean" operation with 210 employees worldwide.
In February 2013 the company bought Safar Oil, which provides equipment and supplies to oil and gas companies, including tools, valves, lubricants and consumer items.
The acquisition of Safar Oil gave TWI business in Kazakhstan and other countries that extended beyond its traditional base.
Besides traveling across the region on Afghanistan-related business, Luke travels to Aktau and Aktobe in Kazakhstan's oil and gas heartland on Safar Oil matters.
Although the United States is withdrawing most of its forces from Afghanistan this year, it is expected to maintain a military presence in the country for some time. President Barack Obama said recently that it would be about 10,000 troops.
Many of them will train and offer other kinds of assistance to Afghan troops.
As long as U.S. forces are in Afghanistan, TWI plans to continue obtaining supplies from Kazakhstan companies and using its Almaty logistics hub to consolidate and ship them, Luke said.