Russian logistics. (Matrix International Logistics Inc.)

A "riddle wrapped in an enigma," until you find a path through the maze of bureaucrats with seemingly quixotic decisions. Ron Cruse of Matrix International talks about his experience.

In 1995, the Russian Federation suddenly decreed that all inter-republic rail scheduling had to be approved by Moscow.

There was no warning of this edict, since the Russian bureaucracy does not tip its hand in regard to decisions that affect the Commonwealth of Independent States (CIS).

The ruling stopped all rail traffic for two days, a delay especially onerous for a U.S. shipper of containers that had been caught and 'frozen' on a siding.

Matrix International Logistics Inc., an American logistics service company based in Alexandria, Va., had responsibility for the stalled cargo. "We learned that there was one guy in Moscow with the power to sign all of the new forms requesting approval," said Ron Cruse, Matrix's president.

Within hours, more than a thousand petitions inundated that bureaucrat's office in a Stalin-era building near the Kremlin. "It was a labyrinth," Cruse recalled. "Long, endless corridors, no signs showing the way to visitors."

"We had the new form, properly filled out, that would start our shipment moving again. The question was how to get it to the appropriate official and have him sign it quickly."

Sergey Kuzminykh - director of Matrix's Russian subsidiary, Matrix St. Petersburg - polled his logistics staff in Moscow, which came up with a very Russian solution.

Through informants in the office building, Kuzminykh's people learned that the bureaucrat "only worked one or two days a week, and had stacks of requests piled up on his desk," Kuzminykh told American Shipper.

"What did we do? We found the cleaning woman for his office, and asked her to put our form on top of the pile on his desk."

Within a day, permission arrived for the shipment to proceed. And in the weeks that followed, the rest of Matrix's transit requests cleared as swiftly.

Local Help. "It just kills U.S. shippers to know that they are at the capricious whim of such a system," Cruse said. "More of them are obsessed now about beating the game, because markets in the CIS are expanding so much."

Many companies that were cautious in 1992-95 about shipping into the CIS "have decided that the benefits outweigh the risks," he said. "They are finding that's it's best to ship with a 'touch' that's indigenous, and the only way to do that is to use reliable, in-country logistics teams."

Matrix currently handles CIS-bound goods from 175 clients, 50 of them multinational corporations. It has moved 20,000 individual shipments to the CIS in the last four years.

The company works for clients as diverse as Westinghouse, Hughes Technical Services, Bechtel Corp., the U.S. State Department, FMC Corp., Arthur Andersen, General Electric, Honeywell, Sierra Nuclear, and Occidental Petroleum.

In the CIS, Matrix St. Petersburg has a total of 100 employees working at offices in St. Petersburg, Moscow, Minsk, Yekaterinburg (in Russia), Kiev, Mariupol, Zaporizhzhya (in Ukraine), Baku (in Azerbaijan), Almaty (formerly called Alma-Ata, in Kazakstan), and Bishkek (in Kyrgyzstan).

(Note to readers: the government of Kazakstan has recently decided to drop the 'h' from its name, previously spelled Kazakhstan. Kazakhs are now Kazaks.)

The company has plans for additional offices for Khaborovsk and Nizhnevartovsk in Siberia.

Night Shifts. "Before Russia opened up in 1992, we had 35 people working in Alexandria. Today, we have 65-70. Our new hires are involved with Eastern Europe and the CIS. Most employees are what we call project or program coordinators. They actually are moving shipments, getting status reports. All have to be extremely computer-literate," he said.

"With my limited computer abilities," Ron Cruse admits, "I'm unhirable by my own company today."

Because Russia is eight hours ahead of Eastern Standard Time, most of Matrix's Russian-fluent staff return to their offices in late evening for an hour or so.

"It's become a habit for them," Cruse said. "We're all obsessed with the puzzles and problems in the CIS.

"Every month, something disastrous happens in their bureaucracies. Our clients know it isn't our fault, but nonetheless, if shipments are stopped or things aren't happening right, you have to overcome it.

"Every pitfall is going to snare you at least once. The republics have all changed their customs dramatically. Half of our CIS meeting every Friday afternoon is devoted to what has changed in the last seven days."

Matrix gets updates from its CIS subsidiary and from clients.

"We have hundreds of bits of information flowing in here every week to our coordinators. We try to disseminate what the tips mean, because there is usually never any formal notification of a rule change in the republics," Fruchterman said.

"You hear first about new forms from the grapevine around the ports and trucking centers. Then, there may be a confirmation in news stories published in Russian-language papers and the English-language Moscow Times," said Cynthia Srisuwan, Matrix International's supervisor of certificates and licensing.

"We have a special software program that we wrote and copyrighted which will also do documents in other languages. We had to do that for Cyrillic, for so many of our forms sent to the CIS must be in Cyrillic," she said.

Early Days. Ron Cruse admits "there was a single, gnawing memory that was responsible for my flying into Russia as soon as it opened up in 1992, after the collapse of the Soviet Union."

"That memory had to do with an earlier period of my life, before Matrix, when I worked in and out of Saudi Arabia. This was in 1981-85, when the Saudi buildup was reaching its end."

"By then, all of the Saudi relationships had been made. The most powerful Arabs who had a say in logistics had bonded with American or English or German companies. I thought to myself, 'oh, to have been here first, on the ground floor of all this.'"

"That's what drove me to Russia. Matrix, in '92, had clients who wanted us to assess what was possible there."

"The West has this 'riddle- wrapped-in-an-enigma' mindset about Russia that is not very conducive to doing business there," Cruse said. "Today, the lure of …