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SECRET FORMULA OF DISTRIBUTION & LOGISTICS S P E CIA L S U P P L E ME N T
D I P L O M AC Y & CO M M E RC E 2017
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DEVELOPMENT OF TRANSPORT INFRASTRUCTURE IS THE BASE FOR GROWTH Establishing better connection with the region entails having a more efficient transport of goods and people, and because of its good position, Serbia could become the regional logistics hub
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eveloped transport infrastructure is the basis for boosting growth of any country, including Serbia and this region. With that in mind, the Ministry has been working hard on developing road, railway and water infrastructure. Absolutely all infrastructure projects that we have completed, as well as the new ones, as we complete them, will positively affect Serbia’s economic growth, increase transit through our country and connect us to the region. How much could the investors’ heightened interest for Serbian ports contribute to the development of river transport which is an opportunity than Serbia has been neglecting for such a long time? › The port sector is a central segment that needs development projects in order for the growth of this transport branch to be expedited. A well-organized port system raises a country’s overall productivity and competitiveness because if the port system is failing, you are going to have a serious problem with an efficient and competitive shipment of goods that are produced in that country. In the last three years, thanks to
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INTER VIEW
M I O D RAG POLEDICA State Secretary in the Ministry of Construction, Transport and Infrastructure
INTENTION
FINAL APPROWAL Our intention is to fulfill the users and manufacturers’ demands as much as possible. We expect the construction of the intermodal terminal to start in late 2017, right after we get the final approval for the EU grant from the IPA 2015 fund.
our hard work, we have rounded off the legal framework that should facilitate development of ports in Serbia. We are just starting to see the results of this work. In the upcoming period, I expect big European and global port operators to come to the Serbian market which will jumpstart the fast development of the water transport in Serbia. The construction of a new port in Belgrade is by far the most important project for the development of the port sector that should satisfy the market needs of a large economic area in the outskirts of Belgrade and the surrounding area, and connect this port to seaports in neighbouring countries. All of this is done with the goal of creating the leading multimodal facility in this part of Europe, as stipulated in the EU’s decree on the TEN-T network. According to the Ministry, how much could the construction of a corridor increase the volume and the revenue from road transport in Serbia? › Completing the construction of the Corridor, which will be the shortest and the fastest link to our country, will provide a strong impetus to development of transport, both passenger and cargo, domes-
tic and transit. The direct benefits from this project will be more toll money collected on the East and South segments of the Corridor 10. The indirect benefits will come from the increased transit. As far as the toll goes, once the South segment from Niš to the border with Macedonia is finished, the toll revenue will grow from the current 13 million Euros to close to 18 million Euros. The estimates have shown that the annual toll collected on the East segment, from Niš to the border with Bulgaria, would amount around 20 million Euros (bearing in mind that trucks would use this segment the most). Let me remind you that no toll is currently collected on this segment. You can clearly see from this data that we are striving to have the aforementioned transport segments fully functional as soon as possible. The annual toll revenue collected on the Belgrade-Preljina segment, once it is put in use, will be approximately 15 million Euros. We do expect some of the vehicles to still use the Ibarska motorway. Also, apart from these direct revenues, a developed transport infrastructure provides a clear contribution to development of tourism and other economic branches.
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How successful were activities on eliminating shadow market in obtaining international transport permits? › The problems with the way international permits were allocated is something that we have inherited and there were mostly due to the insufficient number of exchanged permits in individual contingents compared to the number of transport companies. Also, we discovered that the allocated permits had no expiration date, or the date by which they should have been returned so that proper control of their use could be carried out. The result of this was that the transport companies, whether they used or did not use the obtained permits, were in position to dictate demand and supply, and create artificial deficit of permits in certain contingents on the so-called black market. The existing solutions were such that carriers, that were not included in the permit allocation plan, had virtually no chance of obtaining permits for those contingents that were the most in demand. All of these problems have been suc-
cessfully resolved with the Decree on Changes and Amendments of the Act on Allocation of Foreign Permits for International Public Transport of Goods to National Carriers which came into force in September 2014. This act now stipulates the expiration date for permits. Also, the carriers now obtain permits in line with their real needs. Those carriers who are included in the predetermined annual permit allocation plans can now plan their activities accordingly knowing that permits have expiration dates. The carriers that are not included in this annual plan, or cannot obtain the planned permits or the so-called critical permits, can now obtain the permits that other carriers failed to use within the stipulated time thanks to the clearly defined procedures. Direct effects of these measures can be seen in the fact that the illegal use of permits for international transport has been significantly reduced, and the latent shortages of permits have been eliminated which gives us enough confidence to say that we have improved the system
The port sector is a central segment that needs development projects in order for the growth of this transport branch to be expedited
in use. The work on reforming transport economy is still not finished which is why our Ministry’s strategy and standing negotiation position in bilateral talks with the European partners are focusing on insisting on the permit system to be abolished and for the transport with Serbia to be liberalized. In the following period, the Ministry intends to simplify the work it does with national carriers in this segment by applying contemporary technology, on one hand, while, on the other, it plans to implement important and more efficient measures on supervising national carriers and their use of international permits by collaborating and networking with the databases of the Ministry of Interior, the Ministry of Finance – The Customs Administration, and the Ministry of State Administration and Local Self-Government. How much is having an appropriate transport infrastructure important for boosting economic development in Serbia and in the Balkans?
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› Undoubtedly, the completion of the Corridor 10, which has been over 30 years in waiting, will contribute to economic growth because this will be the main transport route through Serbia that will connect us to Western Europe via Croatia and Hungary, and to Southeast Europe via Bulgaria and Macedonia. We are going to finish this huge project next year. We have opened the Ljig-Preljina segment on the Corridor 11, which is
the most modern road to pass through the heart of Šumadija, and we are going to continue in the same manner. In the following period, the main projects will be the beginning of construction of the Surčin-Obrenovac segment on the Corridor 11, and completion of the Obrenovac-Ub and Lajkovac-Ljig segments. Furthermore, we are going to continue building the Belgrade bypass. Come next year, our citizens will be able to use a modern motorway stretching from Obrenovac to Preljine. There is no need to particularly emphasize just how important these projects are. In regard to railway projects, we are working on modernizing Serbian railways. We have started reconstructing the Belgrade-Bar railroad while the most important project in the following period will be the Belgrade-Budapest railroad that we are going to implement with Chinese partners. Speaking about the port sector and river potential, we are still going to treat this as a segment of utmost importance that needs development projects. Once the development of this transport format is expedited, we are going to have the base for creating the leading multimodal
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platform in this part of Europe. Today, large global manufacturers are shipping their products via logistics facilities so that their products would reach the end users in the fastest, the best and the most affordable way possible. Hence, the project of the construction of the first logistics centre in Batajnica has been drafted, which will have an intermodal terminal in its centre as a place where road and railway transport meet and where the trains carrying cargo containers from Adriatic ports and European towns would be received, reloaded, stored, or distributed to end users within the 100 – 150km radius via road vehicles. The entire transport and logistics chain would be implemented in accordance with the basic principles of logistics – “door-to-door” and “on time”. By doing so, our intention is to fulfill the users and manufacturers’ demands as much as possible. We expect the construction of the intermodal terminal to start in late 2017, right after we get the final approval for the EU grant from the IPA 2015 fund.
Once the works on the BelgradeBudapest railroad are finished, the maximum quantity of transported goods could reach even 20 million tons
What are the Ministry’s plans when it comes to increasing the quantity of cargo transported via railway for business clients considering that this segment also needs big investments? › In 2015, a total of 11.9 million tons of cargo was transported, while so far in 2016, it was a total of 11.6 million tons. Looking at this data you have to bear in mind the fact that, in the period from January to September 2016, there were 94 days of traffic interruptions, while the transport to and from Greece was at standstill from 1st January to 15th July, 2016, as a result of strikes in Greece and the migrants blocking the railway on the Djevdjelija border crossing. Bearing in mind the planned works on the railway infrastructure on the Corridor 10 and the Bar railway, which will cause occasional traffic interruptions, the plan for 2017 is to transport 12 million tons of goods via railway, while, in the years to come, the maximum quantity of goods that could be transported via the existing infrastructure would amount up to 15 million tons of goods annually. Modernization, reconstruction and construction of the Belgrade-Budapest railroad will be especially important in term of the share that railway transport has in the flow of goods in Serbia because
better infrastructure would increase the demand for transport of goods particularly if we take into consideration announcements that the transport of goods from the Piraeus port to North Europe could increase. Once the works on the Belgrade-Budapest railroad are finished, the maximum quantity of transported goods could reach even 20 million tons. According to the existing research and projections, between 10% and 15% of the road transport could go over to railway once the project is implemented and depending on individual regions in Serbia. How much room for Srbija Kargo a.d. to become more profitable has the reform of the Serbian Railways created? › Naturally, the reform has created room for improving the operations of all four railway companies, including an opportunity for Srbija Kargo to become more profitable. This company operates on an open railway market and is no longer using state subsidies. This, among other things, was one of the goals of reforming railway companies, i.e. to have more efficient operations which, in turn, will mean better services for citizens and companies alike. However, we need a better infrastructure in order to fully utilize the potential of the railways in Serbia. The Ministry has been working hard on this. So far, we have reconstructed and modernized around 100km of railways, mostly owing to the money from the Russian loan. The throughput and the transport capacity on the reconstructed segments have substantially gone up, while the commuting time has been shortened and railway transport safety increased. What we have to do in the following period is to finish the works on the southern segment Vinarce-Đorđevo and continue working on the Resnik-Valjevo (the Bar railroad) segment. We expect to start working on the Stara Pazova-Novi Sad stretch too, while the talks with the Chinese and Hungarian side regarding the implementation of the Belgrade-Budapest railroad project are pending. We have applied for funds with WBIF which we need to reconstruct and modernize the Sićevo-Dimitrovgrad segment on the Niš-Dimitrovgrad railroad (Phase I). The value of this project is estimated to be around 87 million Euros with 58% of the money expected to come from WBIF’s grant. ‹
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A YEAR OF NEW CHALLENGES AWAITS US The biggest change compared to the trend in the 1990s is that the product shelf life is now substantially shorter INTER VIEW
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e are talking to Deputy Director General and Logistics Manager of Gebrüder Weiss Serbia, Dejan Spasojević about the latest trends in the distribution and logistics sector in Serbia. What can you tell us about the latest trends in the distribution and logistics sector in Serbia? › The biggest change compared to the trend in the 1990s is that the product shelf life is now substantially shorter. Considering that stock has also been decreasing, the goal now is to have the fastest possible turnover of both. This poses new challenges in terms of providing different services. A few years ago, home delivery was a completely unknown term. Furthermore, social networks and online sales have brought revolutionary changes to logistics and distribution. What is the secret behind the success of the Gebrüder Company in managing transport and logistics? › The secret of success of the Gebrüder Weiss Company lies in four key values that we nurture in our business. The first one is sustainability, both in terms of environmental standards and finances. All services that we offer have to be sustainable, both for GW and for our clients. The next value is commitment which is something GW aspires to have in everything it does. Our employees are expected to be dedicated which, in the end, results in their utmost dedication to clients too. Then there are financial independence and stability as a safety guarantee for our clients. Last but not least, it is our service excellence as a result of our quality solutions that we devise with great care.
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What is your advantage over other similar companies, and what caused such a huge growth of your company? › Construction of new business premises is what affected our company’s growth the most. In 2015, we acquired around 10,000 square metres of additional premises on which we spent 8 million Euros. Last year, we opened our two hubs – one in Novi Sad, and one in Niš – which gave us a better territorial coverage. The advantages of Gebrüder Weiss over our competitors in Serbia are, first and foremost, the high business standards that we have transferred from developed countries in which we operate. GW is a stable and organized system which maintains close contact with its clients and understands their needs and special demands. Good knowledge of local markets coupled with all the advantages than an international company, which has its own IT systems and solutions, has, are important assets of GW. How did the European Commission rate the transportation sector in Serbia? › In its last progress report, in Chapter 14 which talks about transportation sector, the European Commission rated Serbia’s progress as medium. The logistics performance index (LPI), created by the World Bank, is more important to note though. Serbia was given an average LPI of 2.76 (one being the lowest, and five the highest). This speaks about the situation in the country’s transportation sector. The Commission also says that our legislation has been harmonized with the European one while the traffic safety has been rated as bad due to the growing number of casualties. What are the most important projects in road and air transport in Serbia?
D E JA N S PA S O J E V I Ć Deputy Director General and Logistics Manager of Gebrüder Weiss Serbia
PLANS
IMPROVING Further improving our existing network in Serbia, acquiring new clients and raising the quality of our services, which we promoted last year, are GW’s plans for the next period.
› These are definitely infrastructure works on completion of the Corridor 10 which is the most important project in Serbia that will improve the flow of goods. Also, the arrival of Air Serbia to the market has noticeably improved air transport, as did the construction of the cargo facility at Niš Airport which puts this airport on the map for cargo transport. In which way can the price of transport and logistics services in Serbia become more affordable, and how much does the export and import volume affect this cost? › In developed economies over the last decade, the calculation of logistics costs into a product’s retail price have fluctuated between eight and ten per cent. In the last two years, through better organisation and thanks to cheaper oil/fuel, this percentage has fallen to seven to eight per cent. Juxtaposed to this, in some transition economies the percentage of logistics costs in retail price exceeds 20%. This certainly doesn’t mean that the prices of logistics services are so much higher in transition economies. On the contrary, if we compare the prices of services in our country with the prices in the neighbourhood, we see that they are comparable, and if we compare them with prices in developed countries, we see that they are cheaper. The Serbian logistics market is dynamic and has pronounced competition. Reducing the share of total logistics costs in the retail price of a product can be achieved thanks to better supply chain management, improved inventory management, simplified and reduced administrative procedures, as well as through the highest possible level of use of the latest IT technologies and e-business solutions. ‹
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NELT’S INTERMODAL TERMINAL UPGRADES INTEGRATED LOGISTICS SYSTEM Nelt has been absolutely focusing on clients logistics needs. They can rely on latest infrastructure and expertise, which Nelt is constantly developing. Following the opening of a rail container terminal in main distribution centre Dobanovci, Nelt has rounded off its range of logistics services
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usiness excellence in the distribution segment, which makes Nelt an internationally recognizable company, is based on a developed supply chain from which the third-party logistics services division stems from. The expertise and the technology that Nelt has implementing while advancing its distribution process are now available on the logistics market. In this way, Nelt has created a proactive approach and maximum synergy when implementing solutions. Almost 25 years of experience in managing fast moving consumer goods are a sufficient guarantee for the flawless organization of integrated logistics services – from national and international transport and mediation in custom clearance to storing goods at various temperatures in both customs and non-customs warehouses, various extra services and packing services, co-packing and marking of high volume of products and delivery to over 22,000 locations. Nelt disposes of over 105,000 square metres of storage in ambient, cold and frozen regime, and 180 delivery vehicles which are used to manage 6,000 deliveries per day. Nelt handle over 2,500 SKUs in its warehouses. On Nelt’s premises, in Dobanovci, there are railway tracks which have recently made it possible for Nelt to establish the first privately-operated intermodal terminal (railway container terminal) in Belgrade. The initial storing capacity of this terminal is 400 TEU with a possibility of boosting this capacity to several thousand TEU. Nelt’s terminal is linked, via
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railway tracks, to all regional ports, as well as with other European ports and land terminals. The E-75 and E-70 motorways are only 6km from the terminal, Nikola Tesla Airport is 10km away, while the Šimanovci, Krnješevci, Stara Pazova and Inđija industrial zones are between 15 and 40km away. Inside Nelt's logistics centre there is a custom clearance office with a warehouse which offers support to different processes and flow of goods. Other services in Nelt are – processing of full and empty containers, i.e. receiving, handling, disposal, storage and dispatch. In order to provide full range services to the terminal's users, Nelt provides maintaining, cleaning and repairing containers and the necessary inspection services, while also having a large parking lot that can take 100 trailer trucks. There
Almost 25 years of experience in managing fast moving consumer goods are a sufficient guarantee for the flawless organization of integrated logistics services
are also additional services like charging and discharging of containers, the storage of goods under ambient or thermo-regulated warehouses, handling, and distribution to end users. The benefits of the intermodal terminal for Nelt`s clients are reducing the share that transport costs have in the price of goods, safer and better transport of goods from manufacturer to consumer and saving on fuel. The benefits for the society and the country are reducing the emission of harmful gases, less utilizing roads for transport and more efficient business. The terminal is open to everyone participating in import, transit and export business – from shipping companies and railway operators to logistics companies, freight forwaredes, manufacturers, brand owners and other distributors. ‹
Photo: Branimir Milovanović
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LEADING PROVIDER OF INTEGRATED SPECIALIST LOGISTIC
With specialists, facilities and sophisticated equipment we have the opportunity to provide excellent solutions for any heavy lift tasks and shipping
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ora Kečić-Specijalni transporti doo is a leading provider of integrated specialist logistic and forwarding solutions via road, sea, inland waterways, railways and air. Thanks to our extensive experience, mobile fleet, storage area and our knowledge of a various industry sectors, we are able to be flexible and to response to any requirement of our customers. Founded in 1948, Bora Kečić -Specijalni transporti doo has developed into a Serbian market leader in the special and heavy transports, and also became one of the best and the most reliable in the region. We cover the European market, as well as specialized transports in Russia and Asia. Our dedicated team of experienced staff for multimodal transports ensures appropriate solution for any OOG (out-ofgauge) cargo. With over 60 years of experience dealing with exceptional and oversized loads and 400 employees, “Bora Kečić” name became the synonym for quality, reliability and efficiency. Company is located in Železnik-Belgrade, with company space of on 60.000 m2 . With specialists, facilities and sophisticated equipment we have the opportunity to provide excellent solutions for any heavy lift tasks and shipping.
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BORA KEČIĆ- SPECIJALNI TRANSPORTI DOO BEOGRAD Stevana Filipovića 113 11250 Železnik - Beograd +381 11 2577 917 +381 11 2572 777 e-mail: spectransport@ borakecic.rs www.borakecic.rs
Besides of different type of trucks, our mobile fleet consists of the following vehicles: - Trailers and semi-trailers cover the following capacity up to 300t and modular trailers up to 680t. - Mobile cranes with capacity ranging: up to 280t (lattice boom) and 330t (telescopic boom) - Special wagon 32 axles and 600 tons capacity (will be finished in the next 6 months). Manipulation of cargo of up to 1000 tons using sophisticated hydraulic equipment (LUCAS). These are some of the major projects: 1. Multimodal transport of oil&drilling rig equipment from Turkmenistan to Elemir Serbia 2. International multimodal transport and transshipment of WTGs type V117, from Constanta (Romania) to wind-park Kula (Serbia) via port Apatin. WTGs height was 120m and blade’s length was 60m. 3. International multimodal transport and transshipment of WTGs type V117, from Constanta (Romania) to wind-park Zagajica (Serbia) via port Pančevo. WTGs height was 120m and blade’s length was 60m. 4. International multimodal transport of the biggest power transformer ever, 725
MVA, 370t of main body, from Gebze (Turkey) to power-plant Nikola Tesla B (Serbia) via port Derince. 5. Multimodal transport of two transformers 410 MVA and 300t each to power-plant Kolubara - power-plant Kostolac B in Serbia. 6. Multimodal transport of the industrial equipment for power plant Kostolac B. Chinese company dedicated this project to Bora Kecic Company, so 50.000 m3 have been delivered via port Constanta to the final destination in several lots. 7. Internation transport of elements for Project Žeželj bridge, Novi Sad, Serbia on relation L´Aquila, Italia – Novi Sad, Serbia. For this Project we performed more than 400 transports, from Taddei-EDIMO group in Italy. 8. Multimodal transport of elements for Project FIAT. We transported elements from Japan, produced by Komatsu to Kragujevac, Serbia (transport of 5 press-lines). 9. Multimodal transports of cargo shipped from ThyssenKrupp, China to Kostolac , within Project of building new mine called B3 10. For the project of delivery of 200 military vehicles (armored units) from Europe to Cambodia, Bora Kečić Specijalni transporti doo was the exclusive transporter and project organizer. ‹
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