TRANSPORT &
2018
REPUBLIC OF SERBIA MINISTRY OF CONSTRUCTION, TRANSPORT AND INFRASTRUCTURE
MANAGEMENT
Interested? Try one - 14 days free! To schedule your free Palomat pallet dispenser trial: mail to  info@still-ltc.rs or just give us a call  011/ 30 76 636
INTERVIEW
MIODRAG POLEDICA Secretary of State at the Serbian Ministry of Construction, Transport and Infrastructure
Better Transport Infrastructure Accelerates Economic Growth
The European Commission decided this March to adopt a tenth freight corridor, entitled the ’Alpine-Western Balkan Corridor’, which represents a great success for Serbia, as the only non-EU state to be traversed by one of a total of 10 rail freight corridors. It is also an example of the positive evaluating of the policy of the Serbian government and the Ministry to connect Serbia to key European transport routes
T
his month we spoke with State Secretary Miodrag Poledica about the transport and logistics plans of the Serbian Ministry of Construction, Transport and Infrastructure. • The Berlin Process has opened up one of the most important lines of cooperation within the region and with the EU: the construction of transport capacities. How much strategic progress has been made on this front? - The Republic of Serbia is very active within
4 |
163
| M AY
the framework of the Berlin Process, where it is working on all measures that will enable bilateral issues to be resolved, economic cooperation improved and a sound basis for sustainable growth to be established. Through meetings between prime ministers in Berlin in 2014, Vienna in 2015, Paris in 2016 and Trieste in 2017, the Berlin Process has focused mainly on the economic dimension of connectivity, in the area of transport and energy infrastructure (Connectivity Agenda), where there were the most tangible projects and initiatives.
Within the framework of the connectivity agenda, the EU finances projects that are of undoubted regional significance by providing major grants from EU funds: IPA (Instrument for Pre-accession Assistance), WBIF (Western Balkan Investment Framework) and CEF (Connecting Europe Facility), while sometimes these funds are provided in combination with other sources of financing, such as the EIB, EBRD, World Bank and the budget of the Republic of Serbia. The projects identified are those that are located along the main routes of the EU’s
TEN-T network and simultaneously represent the EU’s Core Network Corridors. Under the auspices of the Berlin Process, “soft” measures have been defined that the Western Balkan participants should implement between themselves, but also with EU member states, in the field of infrastructure and economic development. For the Republic of Serbia, national soft measures relate to the implementation of measures enabling the border control of trains via a one-stopshop, with the aim of shortening the times that trains are retained at border crossings. When it comes to regional soft measures, they relate to the opening up of the railway services market, enabling intelligent transport systems, coordinated maintenance of transport infrastructure, reducing the impact of climate change on infrastructure etc. Moreover, regional soft measures also encompass the defining of a network for the implementation of European freight corridors under the EU- Rail Freight Corridor-RFC Regulation, which the Republic of Serbia is involved in with regard to the
establishment of a new tenth freight corridor, dubbed the Alpine-Western Balkan Corridor. • When should a list be compiled of the most important freight routes which Serbia is currently working on or intends to work on, which projects would you single out in particular? - The priority projects for the Republic of Serbia,
with neighbouring countries regarding the route of the future Belgrade-Sarajevo highway, i.e. the Belgrade-Timisoara Highway, with which will will complete highway links with the entire region. When it comes to railways, the priorities include the intensification of construction of the Belgrade-Budapest high-speed rail link (works are underway between Belgrade-Stara
With the help of the European Union and other donors, we expect significant funds to be invested in our infrastructure projects during the EU pre-accession phase of the Republic of Serbia which are significant for the region, and thus also the EU, are completion of the remaining sections of highways E-80 and E-75 (Corridor 10), completion of the construction of the Belgrade Bypass, further construction of Highway E-763 to the border with Montenegro (Corridor 11), launching phase one works on the Niš-Merdare (Pristina) section of Highway E-80, reaching agreement
Pazova and Stara Pazova-Novi Sad), the earliest possible launch of the electrification of the Niš-Dimitrovgrad railtrack, with the installing of bypass tracks around Niš (a financial contract was signed in January 2018), reaching agreement for works on the reconstruction and modernisation of the remaining sections of Corridor 10, covering a distance of around
M AY
|
163
| 5
370 km, as well as the continuation of works on the reconstruction of the “Bar rail route”, along the section from Valjevo to Vrbnica (Montenegrin border), covering a distance of around 210 km, and other works. In addition to this, preparatory activities are also planned on the modernisation and reconstruction of the Belgrade-Šid-Croatian border rail track, covering a distance of around 80 km, considering that a significant increase in passenger and freight flows is expected along this route. These mainline tracks form part of the railway Corridor 10, which is the most important rail corridor not only for Serbia, but for this part of Europe generally, given that it forms part of the indicative expanded TEN-T core European transport network. The fact that Serbia is one of the countries with a key transit character creates the opportunity not only to increase the volume of goods transportation, but also to build new logistics zones and attract investment in zones located alongside the main corridors. • The European Commission has allocated significant funds to support projects aimed at connecting transport infrastructure in the region. What will they primarily be used for in Serbia? - Considering that we’ve made progress with the construction of the road infrastructure network, the strategic goal in the period ahead will be the reconstruction of the rail network, in accordance with the recommendations of the European Commission and the conclusions of the Paris Conference, with the aim of reducing carbon emissions and shifting haulage from roads to environmentally cleaner transport systems and intermodal transport. As strategically important projects, we can highlight the Velika Plana-Niš project, for which technical documentation is being prepared using EU funds. Apart from this project, we would also highlight reconstruction and modernisation projects on mainline rail routes from Belgrade to the border with Croatia and from Niš to the border with Macedonia, along Corridor, 10 and the section of the Bar rail route from Valjevo to the Montenegrin border. • How would you assess the Ministry’s cooperation with international financial institutions on the implementation of Serbia’s transport and logistics plans? - Strategic documents have defined devel6 |
163
| M AY
opment plans for the construction and improvement of transport infrastructure, the implementation of which requires funds from international financial institutions. Given that Serbia represents a favourable investment destination, cooperation with international financial institutions is heading in the right direction and we don’t currently have problems with the implementation of projects, as we had in the past. It can be considered that we are probably the only country in the region, but also further afield, that successfully manages various sources of financing in the implementation
as well as the maintenance and management of Belgrade Nikola Tesla Airport JSC was signed on 22nd March 2018 with the most favourable bidder - Vinci Airports from France. The Nikola Tesla Airport concession will enable Belgrade’s airport to develop even faster, in order for Serbia to become a regional hub for air traffic. The value of the concession’s “up-front fee” is 501 million euros, while investments in development over the next 25 years will amount to 730 million euros. The annual fee totals approximately 10 million euros per year for the duration of the concession. • Where do you see room for applying public-private partnerships on infrastructure projects? - The application of public-private partnerships enables the reduction of fiscal pressure on the budget, the acceleration of infrastructure investments, improvement of services and reductions in their prices, with the partnered sharing of risk in realisation, and later also in project exploitation. The Ministry is exerting efforts to find ways to sustainably finance all infrastructure projects that are important for the development of the Republic of Serbia either through secured funds in the Serbian budget or through loans from international financial institutions. There are certainly projects with a very high investment value. One such project is construction of the Highway E-761 section from Požega to Boljar-Montenegrin border. In construction terms, this is the most difficult part this corridor, covering a distance of 107
We expect the greater application of public-private partnerships for the implementation of projects in the construction of logistics centres, container terminals, ports and railways of transport and logistics projects (EIB, EBRD, World Bank, EU IPA funds, WBIF, CEF, bilateral agreements with Russia, China, Azerbaijan and Kuwait, as well as combinations among them). • In your opinion, what will the introduction of a concessionaire in the management of Belgrade Nikola Tesla Airport mean for the further development of air transport in Serbia? - A 25-year concession agreement, with development through construction and reconstruction,
km. Along the route of this corridor there will be 97 bridges (total length of 27 km), 58 tunnels (total length of 19 km) and four major junctions. The value of construction is estimated at 1.51.8 billion euros. A document on this project was signed on 29th March 2018 with Chinese partners, with which it is planned to define a model for the financing and construction of the Požega-Boljar section. The joint work with these Chinese partners will be based on the public-private partnership model. ■
“CARGO-PARTNER” CORPORATE
Global Operations – Local Decisions
cargo-partner is an international transport and info-logistics provider with 2,780 employees around the world. The company generated a worldwide turnover of 700 million euro in 2017 and has been recording ever-improving business results in Serbia for the past 14 years
I
n addition to a comprehensive portfolio of air, sea, land transport and warehousing services, cargo-partner also has a wealth of IT experience. The company strives to constantly find new, simple and comprehensive solutions to optimise the entire supply chain for a long list of prominent clients. • cargo-partner was founded over 35 years ago and has been present in Serbia since 2004. How did the company develop and gain its strong position on the Serbian market? - We began our expansion in Central and Eastern Europe at first, and then branched out to Western Europe, North America, North and Southeast Asia and the Indian Subcontinent. Although we operate globally, we are absolutely committed to local operations, market conditions and customs, which is epitomised by our motto “we take it personally”. We grow and develop together with our clients, follow them to their key markets and develop tailor-made solutions for their needs. We started operating in Serbia 14 years ago and today have offices in Belgrade, Novi Sad, Kragujevac and Subotica. In December 2014 we started operations in our own warehouse in Dobanovci This modern logistics centre extends over an area of 8,000 square metres, capacity of 20,000 pallet places, 18 trans-shipment ramps and one ramp for oversized cargo. • You rely on the latest achievements and new technologies to streamline your operations.
How has cargo-partner reacted to the challenges of digitalisation? - We took the first large steps at the turn of the millennium, when we started working with the supply chain management platform SPOT. Today, we use SPOT to manage all aspects from order management to shipment tracking, warehousing, documentation and reporting. All cargo-partner locations worldwide are connected via this platform, enabling us to communicate easily and efficiently, with comprehensive monitoring and automated data exchange. Globalisation and digitisation have significantly expanded our range of responsibilities. Logistics is no longer about simply delivering goods from A to B. Today, the focus has shifted to intelligent information management, or in other
• cargo-partner is among the companies showing a very high level of corporate social responsibility. In which ways do you care about the protection of the environment? - Environmental protection is one of our most important corporate goals. At all our offices we take care of energy efficiency, recycling, waste sorting and prudent use of equipment and consumables. With the construction of our energy-efficient, timber-based iLogistics Center at our headquarters near Vienna Airport in Austria, we took a significant step towards achieving our ecological goals. A total of 4,200 cubic metres of timber was used in the construction, resulting in a CO2 reduction of 8,400 t. The warehouse will be operational as of the middle of this year.
In addition to international transport, warehousing and distribution, cargo-partner offers also a value added services such as picking, packing, repackaging, labelling and other, all as per customer’s needs words: “info-logistics”. With our IT solutions, we support our clients along the entire supply chain and ensure that the right information is in the right place at the right time. Thus, we can make transport and procurement processes more efficient, avoid emergency transports and achieve a better utilisation or transport and storage resources.
The first conclusions from this project have already been incorporated into the plans for the construction of our new iLogistics Centre in Sofia, which will open in June. We strongly believe in the importance of investing in innovative transport and logistics technologies, and we look forward to further similar projects in the future. ■ M AY
|
163
| 7
CORPORATE IVAN MILIĆEVIĆ, MANAGER OF LOGISTICS BUSINESS DEVELOPMENT AT NELT GROUP
Integrity Leads To Success
Nelt Group has been a leader in distribution and logistics on all markets where it operates for a quarter of a century. The group’s success relies on knowhow, experience, high-quality personnel and the innovation that it has shown from the start in all segments of operations. Nelt has big plans for the next five years
T
he specialization and differentiation of logistics services, maintaining operational excellence and understanding customer needs, is the way to develop all segments of business, including logistics. This is also the basis of Nelt`s strategy for growth and performance on markets.
• You are among the few Serbian companies to record constant growth on the domestic and international markets for the last quarter of a century. What were the key moments during the past 25 years? - During 25 years in distribution and logistics business, Nelt has built its way to success – through knowhow, dedicated work and acquired experience. A quarter of century behind us, testifies about the focus, effort and commitment of a large number of people. Also, there have been many key moments. Just as in the life of an individual, the key moments in the life of the company are the forging of strong partnerships that change and form us. Viewed from this perspective, the partnership with Procter & Gamble, way back in 1996, had a major influence on us. However, the start of cooperation with Kraft Foods, now Mondelez, in 2000, and Wrigley in 2001, were no less significant. Equally important is the establishing of partner8 |
163
| M AY
ships with SSL companies, Dr. Oetker and Philip Morris International, while from the recent past we are particularly proud of the partnerships established with global logistics giants - COSCO from China, CMA CMG from France and DACHSER from Germany. We are continuing our shared journey, setting new expectations and remaining open to new experiences. • Many would be envious of the list of clients with which you cooperate. What are the basic postulates that form the basis of
a winning mentality, innovation, a long-term perspective and personal responsibility. We are focused on each other and are fully aware of personal responsibility; we recognise and believe in the strength of all of us at Nelt, but also in the strength of our partners. We know that we are as strong together as each of us is individually in the chain. These are universal values that, thankfully for us, people recognise. • You stated recently that key development factors are, among others, digitisation
Care for employees, a winning mentality, innovations, a long-term perspective, personal responsibility are the values that led us to the leading position on the markets on which we operate your cooperation with the world’s largest companies? - Integrity is the keyword, and along with that we are also consistent in our stance that we must always handle our work in the best possible way at any moment. The values that led us to the current position are clearly articulated. Those are care for people,
and automation in the scope of business processes and warehousing. To what extent does your business rely on technological innovation? - I mentioned one of the values that was embedded in our business code from the very beginning. Innovation. Digitisation and automation are expressions of innovation that
are brought about by the spirit of our times. In previous years we introduced the SAP ERP system to all the markets of the Balkans where we operate, digitised the management of warehousing processes by introducing the Warehouse Managment System GOLD, and pioneered implementation of Pick by Voice technology. In the process of delivery of goods, we have relied successfully on dynamic routing for years. Our IT sector has formed a permanent team of internal SAP experts, who cooperate regularly with external teams of experts. We no longer view improvements as innovations, but rather as part of regular daily operations. • Given that you have expanded your business significantly in geographical terms, how do you harmonise the varying technological standards that you come across in, say, Africa and Europe? - Sustainable operations and focus are key to
- Nelt is part of this society, while it operates on two continents and eight markets. We strive to be a very active partner of the state wherever we are present. Although we rely primarily on our own resources in our growth, which is to some extent our operational ID
NELT CENTRAL DISTRIBUTION & LOGISTICS CENTRE IN DOBANOVCI, BELGRADE
All spheres of our lives are immersed in technological innovations which, provided an adequate approach exists, make our lives easier. Without a focus on these processes, today’s logistics are not possible our approach, which also implies a high degree of adaptation to the complexities brought by different markets. Our efforts are certainly focused on transferring good practises, which we have adopted on all markets, but experience tells us that merely copying solutions usually doesn’t lead to the desired result. This is where innovation appears, and in order to be innovative you must have focus. In that spirit, a special business unit for Africa has been formed within Nelt Group. • You have announced investments of €15 million in 2018 for the development of new services and the expansion of warehouses, office space and your fleet. How interested is the state in using budget resources to support successful Serbian companies like Nelt, which employs more than 3,000 workers?
of each of us. As a company that employs people in the region, we exert every effort on a daily basis to impact affirmatively on the atmosphere, to support regional initiatives that should carry us forward. One of these is the recently formed Western Balkan
card, we certainly have expectations in terms of support and partnership with the state. Apart from that, Nelt also participates actively in the work of the National Alliance for Local Economic Development - NALED, and is one of the founders of NALED’s Fair Competition Alliance . • To what extent does the tense political situation in the Balkans hinder the development of economic cooperation in the region? - Knowing the times in which we live is essential to sustainability, because there are many global and regional challenges. On the other hand, nobody is immune to events that, it seems to us, we cannot influence. We believe that these are challenges that we are overcoming successfully. I will return to the personal responsibility
Transport Association, of which we have high expectations. • Nelt has long since outgrown regional frameworks of doing business. What are your plans for the next five years? - The growth we have so far achieved has served to highlight the challenges arising from internal and external complexity, and this has also impacted on the clear defining of further directions of development. Within the Nelt Group we have formed distribution, logistics and Africa business units. Focus is the most important factor of success, and also forms the basis for nurturing an organisation that is motivated, efficient and effective. Our priorities, alongside achieving sales and operational goals, are the expansion of logistics capacities, such as the construction of new warehouses in Belgrade and Sarajevo, the improvement of technology at the Intermodal Railway Terminal in Dobanovci, and the strengthening of logistics teams at our companies in Macedonia, Montenegro and Bosnia-Herzegovina. We are also preparing to enter a new markets in the neighbourhood. ■ M AY
|
163
| 9
ALTI LOGISTIKA, BELGRADE NIKOLA JEVTIĆ, MANAGING DIRECTOR, ALTI LOGISTIKA, BELGRADE
Driving By Added Values
Using the right synergy of experience and knowhow, they reached the top in just two years , and there they intend to stay
F
ounding the company was preceded by a thorough market survey, analysis of the competition, drafting of a strategy and business plan, all of it indicating that despite a seemingly saturated sector, there was still room for another company that would work differently and bring new value systems into the field of logistics. Unlike many others, our beginning was not difficult. The secret may be that we were ambitious, but realistic. We recognised that our opportunity lies in increasing the existing values of doing business and adding one more - a moral one, as our people would say – a human value, and then “the sky’s the limit”. Our customer relationship management at this point is well developed, says Nikola Jevtić, Director of the Alti Logistika Company, to Cord. Our credo is not B2B, but H2H - human to human. This applies both to our relationship with business partners - clients and with our employees. Work must be done with quality, and interpersonal relationships must be nurtured, says Jevtić. In a practical sense, management activities that shape the climate of the organisation, human behaviour in work, and dedication to the organisation must be the default in the relationship with business partners, i.e. clients. This kind of approach sets us apart from the competition and results in us achieving top-level success regarding quality of service. The rule in Alti Logistika is that reactions and processing times are rapid, information is always to be discovered before anyone 10 |
163
| M AY
else does so, because time is an irreplaceable resource and an indicator of success. Particular attention is given to cooperation with the SME sector. Their needs for our services are not great, but they are constant, and their number is constantly increasing. They were, and always will be a stable part of Alti Logistika’s business, says Jevtić. Alti Logistika provides full logistical services, international transport, customs representation, warehousing and distribution. The emphasis is on international road transport in Eastern and Western Europe, Russia, and
The path of company development has been precisely set a long time ago. A target and a budget have been designated for each year. During the first year we wanted to position ourselves on the market and achieve a positive result, and this was a year outside the comfort zone of doing business, in accordance with the times. During the second year we repeated our success from the first, but to a greater extent, thus setting a basis for mid-term plans. After two years we have achieved significant growth, and we intend to maintain it in the future. Dur-
To be successful in logistics means the business represents both an economic and an ethical dimension in equal measure. Just and fair treatment of business partners, clients, as well as employees is particularly important, because it represents higher moral standards for doing business than those provided by laws and regulations
Turkey, but they also respond to any specific client requests. Contemporary logistics is not merely the distribution of goods from point A to point B, it requires competent experts that will plan, organize and implement the entire operation with constant control of the flow of implementation. This kind of approach to business partners lead to us receiving the epithet of an organisation with equal standards of quality of service both towards small, as well as large organisations.
ing this year, in addition to organisational and human resource development, we plan to introduce contractual logistics. We also have plans for our own logistics centre, when the time is right. The “Alti Logistika” company had a well-regarded presence two years in a row at the “Transport and Logistics in Southeast Europe and the Danube Region” conference, and received the “Brand Leader Award” twice. ■
M AY
|
163
| 11
NEWS
AROUND THE WORLD DIGITAISATION
Where Is The Road Freight Industry Headed? Digitisation is impacting on every industry, and road freight is next. The business-as-usual approach is no longer cutting it, due to its largely analogue, inefficient nature. Digitisation will fundamentally transform the road freight industry, yet third-party logistics providers (3PLs) are still relying largely on analogue processes, managing the freight business in a highly inefficient manner. This attracts new market players that effectively leverage digital technologies: Emerging Digital Freight Platforms receive a lot of attention, as well as major venture capital funding – approximately $2.8 billion in the last five years. This shows that investors are speculating on the “uberisation” of yet another industry that is clinging to an outdated mindset. The new market entrants, however, still need to overcome some shortfalls to live up to their promise.
LOGISTIC
EU Market Demand Remains Strong After a moderate to stable beginning to 2018 in many countries, current market conditions suggest that demand for cargo space will gradually rise again in the coming months. However, there are uncertainties whose impact on the overall development is difficult or impossible to estimate. The impact of the continuing shortage of drivers reached its latest peak in the second half of 2017. Regionally, Central and Eastern Europe are particularly affected by a sustained lack of logistics personnel. So far, it has been France, Germany, and Belgium that have particularly monitoring compliance with the clause in the “European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport” (AETR) concerning where drivers are to spend their weekly rest period. The new regulation stipulates that it can no longer be spent in their vehicles. Once the European Court of Justice reaffirms this clause and declares it to be lawful, a significant increase and extension of controls to the other EU countries is to be expected.
For decades, 3PLs have been planning, coordinating and matching shippers’ transport demands with hauliers willing to take on the loads. But, the way things are moving now, the future might paint a different picture: Tech companies have started to enter the market, establishing virtual marketplaces for freight, so-called Digital Freight Platforms (DFPs). These DFPs focus mostly on small and medium-sized shippers, offering brokerage business, which is based on ad-hoc contracts for specified volumes, at a known time, and for a known originto-destination pair. Here, the new DFPs’ disruptive potential becomes clear as they present an efficient alternative to traditional middlemen-activities: They provide greater transparency on prices, an easy-to-use system and a faster, paperless process. So far, traditional 3PLs are better equipped to cater to this market segment. The new DFPs introduce a valid business model it has much more potential than has been exploited up to now. The role of 3PLs as middlemen in transport has never been challenged as much as today. To overcome market inefficiencies, a digital transformation of the road freight industry is the only way forward. The fact is that digitisation will be an integral part of the industry’s future fabric. Whether it will be the new market players overcoming their challenges and disrupting the industry after all, or existing market players applying digital marketplace technology in the future – it remains to be seen which scenario will become a reality. Blockchain is a wildcard in all of this, able to drastically alter the future outlook. For now, it is clear that proactively pursuing digitisation is an urgent prerequisite to stay relevant in this industry.
12 |
163
| M AY
INDIA
GreyOrange unveiled Butler XL
Robotics and supply chain automation company GreyOrange unveiled, at the 16th edition of LogiMat 2018 in Germany, its expanded range of Butler robots capable of managing a variety of payloads weighing from 100 to 1600 kilograms. The goods-to-person Butler™ system lets warehouses run high-speed operations by automating inventory storage (putaway) and order fulfilment. It has been deployed in distribution centres in Japan, Hong Kong, India, Europe and the Americas for industries such as 3PL, e-commerce and retail. The robotics systems handle a variety of items including apparel, home furnishing and personal care, reducing cost per shipment and enhancing productivity of warehouse operations by more than four times. The new Butler XL’s versatility is ideal for handling bulk inventory in factory warehouses, omnichannel fulfilment centres and large distribution hubs.
STEVAN GADOL, DIRECTOR AT FERRY AGENT D.O.O. (LTD.) CORPORATE
Responsibility & Efficiency Lead To Success Ferry Agent is a specialised road haulage company from Serbia. Alongside freight forwarding, it offers clients warehousing services for all types of goods, customs brokerage and clearance of goods within 24 hours of the arrival of a shipment in Belgrade
O
ur clients have information about the movement of consignments at any moment and know when goods will arrive at their destination. It is important to us that they feel secure in working with us, because that sets us apart from the competition and gives us an advantage • You are focused on the demanding UK market, where you have operated since the company’s establishment. How have you managed to achieve a leading position in less than 10 years? - We achieved a leadership position by approaching each client with the same attention and energy, not differentiating in any way between small and big clients. Both are equally important to us. In addition to that, I
Client satisfaction has always been our top priority. The slogan “the client is always right” has been our guiding star and that’s why our clients have always shown trust in us, returned and served as the best recommendation for our dedicated work. It will seem unbelievable to some that we have achieved this great success with almost no marketing base, rather only thanks to dedicated work and the recommendations of satisfied clients. • You organise transportation of all types of goods, from deep frozen foods requiring a special temperature regime, through excisable and perishable goods, to ordinary commercial products. How long are your transit periods and delivery times? - Yes, you’re right. We organise transports of
We have become members of the British-Serbian Chamber of Commerce, while the Chamber of Commerce & Industry of Serbia has included us in the club of successful small and medium-sized enterprises in Serbia, which – alongside satisfied clients – is another indicator of the quality of our work think that the responsibility we show in our work, which is our basic principle, has also set us apart from others and brought us great results. This means that each client received from us everything that we promised and that we have fulfilled every contractual demand, even if that came at our own expense.
a wide range of goods, just as you stated. We always strive to utilise the best logistics solution to provide the shortest possible transit period for each client. For partial truck load (PTL) and groupage services, we organise three to five departures on a weekly basis, with a delivery deadline of up to seven days, which
represents an extremely short transit period. For full truck load (FTL) services, the transit period is up to five days, and on average we deliver goods from the UK within a deadline of five to seven working days. • Can your customers also count on the warehousing and customs clearance of goods? - Yes. We have leased/service warehouse space in London, as well as at “Kvantaš”, near the Belgrade Terminal, which we use for the needs of clients who don’t have their own warehouse facilities. We also provide brokerage services in customs procedures for clients who needs customs clearances for their goods. We perform both activities as an inclusive service, and as part of our overall logistics services. • Are there any other advantages that provide clients with additional security when transporting goods? - We have a haulage liability insurance policy, so our clients are additionally insured, without any additional costs, against any possible shortcoming that might arise from our side. We assume direct communication with suppliers and customers in the organisation of transport, so in this way we unburden the client of the need for additional communication, and also ease our own work. ■ M AY
|
163
| 13
CORPORATE DARKO LAZAREVIĆ
HEAD OF INSURANCE TECHNIQUE, PRODUCT DEVELOPMENT AND UNDERWRITING
Transport Without Risk
Milenijum Insurance offers a range of products for all the needs of clients working in transport and logistics: insurance of goods in transport (CARGO), insurance of civil liability in road transport (CMR), and motor third party liability and Casco motor vehicle insurance
F
ull protection of shipments can be achieved through contracting both CMR and CARGO insurance. They are complementary, and their use protects the vendor, the buyer and the transporter, transferring the risk of damaged goods onto the insurance company. Today’s international trade cannot be imagined without modern tools like insurance of goods in transport serving as support for the main business activity.This type of insurance provides all participants in international trade with certainty and provides for unfettered everyday business operations, minimizing business risk. There are two different types of insurance - insurance against civil liability in road transport (CMR) and insurance of goods in transport (CARGO). With CMR, the subject of insurance is civil liability of road transport providers 14 |
163
| M AY
for proven full or partial physical loss or destruction of items actually received for transport. In practice, this means that the insurance company will reimburse all amounts the insured party must pay as compensation for damage to goods received for international transport for which the transport provider is liable. Transport provider liability is established in accordance with the provisions of the Convention on the Contract for the International Carriage of Goods by Road - CMR. In order for a transporter to be liable for damage to, or the destruction of goods received for transport and to reimburse the damage to the owner of the goods, the following conditions must be all met: * That there is full or partial physical loss or destruction of items actually received for transport.
* That the transporter has transported the goods in a manner contrary to the rules of the Convention. * That the owner of the goods proves that the transporter is responsible for the damage caused. The subjects of insurance of goods in transport (CARGO) are all items being carried or transported by rail, road, river or lake, aircraft and mail at the risk of the insured party – the owner of goods in international transport. Insurance of goods in transport covers loss or damage to the insured item due to fire or explosion, traffic or navigational accident of the vehicle or craft, earthquake, flood, avalanche, lightning strike, storm, theft or failure to deliver the entire consignment, or fall of the insured item during loading or unloading from the vehicle. Insurance can also cover risks such as various forms of damage to goods (items) during loading and unloading or due to damage to the packaging, tearing of bags, breakage, spillage or leakage of contents, malfunctions etc. Insurance
coverage also encompasses the costs of saving insured items. The international rules for interpreting trade terms (INCOTERMS) are the basis for insurance of goods in transport. To apply these rules, the parties to the contract must reference them in their contract, and they apply solely in the relationship between vendor and buyer. Each clause contains detailed provisions on the obligations of the vendor and of the buyer regarding the goods subject to international sales. With CMR the subject of insurance is the liability of the transporter for damage caused to the goods they received for transport, while for CARGO insurance the subjects of insurance are the goods being transported. There is a subjective element with CMR - a certain degree of guilt by the transporter - and the compliance of their behaviour with the rules of the Convention is assessed, whereas with CARGO insurance this is not the case. The insurance premium for CMR
insurance is lower than for CARGO insurance. This economic factor is often decisive for an owner of goods in not using CARGO insurance, since it increases the total cost of goods, with the owner taking on the risk of destruction of goods. He must be aware of this.
Milenijum Insurance offers a range of products for all the needs of clients working in transport and logistics. Several types of insurance are on offer: Civil liability insurance for road transport operators (CMR) and insurance of goods in transport (CARGO), offered by
Milenijum Insurance focuses on meeting the requirements of our clients at the highest level, as confirmed by the fact that we are a leader in responsiveness for claims handling Full protection of shipments is achieved through contracting both CMR and CARGO insurance. They are complementary, and their use protects both the vendor and buyer (CARGO), and the transporter, transferring through CMR the risk of damage to the received goods onto the insurance company, protecting them from insolvency.
Milenijum Insurance with the same success as motor third party liability and Casco insurance of motor vehicles. The professional team of Milenijum Insurance is always ready to provide current and potential clients with any and all information, details on the most favourable conditions, and prices of their services. â–
M AY
|
163
| 15
CORPORATE CESTRA D.O.O.
Consultancy In Transportation That Drives Development Transportation networks, as important lifelines linking communities and goods, are indispensable for the smooth functioning of society
T
he appropriate planning and design of a transportation network is a crucial step in reaching sustainable growth in developing economies. Cestra has been recognised as a creative team dedicated to the provision of solutions for today’s challenges in the transportation sector. WHO WE ARE Cestra is a name behind which stands a team of enthusiastic professionals ready to confront challenges in the field of transportation. The primary objective of our company is to supply the client with professional services of the highest quality. Our technical competence is constantly maintained and expanded in order to respond to the development of disciplines and the latest technologies.
WHAT WE ARE DOING Cestra provides a multidisciplinary group of experts in transport infrastructure engineering in all relevant transport sectors (roads, railways, airports, terminals) for governments, private enterprises and contractors, on both large and small-scale projects. The team has carried out small and large projects worldwide, including in the Western Balkan region. Cestra has extensive knowledge and the right tools for consultancy in transportation and assists with all aspects 16 |
163
| M AY
of transportation planning and design - from strategic visions, plans and financial plans, down to support in practical implementation. Consultancy services in transportation are provided to a multitude of public and private clients - from private developers, municipalities, regional and national government organisations/authorities, to the many different institutions of the EU, International Financial Institutions and other development agencies. INNOVATIVE APPROACH Cestra provides services that combine knowledge of the latest technologies with sustainable development trends in
WHO BENEFITS FROM OUR SERVICES Cestra has to date operated in Western Balkan countries (Bosnia-Herzegovina, Serbia, Croatia, Albania and Montenegro), Belarus, Denmark, Hungary, Slovakia, Nigeria, Angola, Kyrgyzstan, Kazakhstan and Tajikistan. WHAT WE HAVE DONE Among many high-profile projects and tasks successfully completed, we at Cestra are always proud to mention projects like the E80 Highway, the Design of the DobojTuzla-Brcko Railway, reconstruction of the Scepan Polje-Pluzine Road, the Montenegro Coastline Priority Bypass, Motorway concession in Republika Srpska, the Traffic Safety Study for State Roads in Serbia, Section III
Cestra provides services that combine knowledge of the latest technologies with sustainable development trends in developing solutions that can withstand the emerging impacts of climate change developing solutions that can withstand the emerging impacts of climate change. Tailormade solutions present cost-effective engineering measures and technologies that are all designed to ensure the robustness, redundancy and resilience of transportation networks.
of the Inner Semi Ring Road in Belgrade, the concrete dual carriageway flyover in Lagos, and many others. Each of our assignments, no matter how big or small, is undertaken very professionally and with care. We will be happy to provide you with more information at www.cestra.rs â–
VLADIMIR TRIFUNOVIĆ, DIRECTOR AT SKY PARTNER R.S. LTD. CORPORATE
Ready For Increasing Passenger Numbers Sky Partner operates at Belgrade Nikola Tesla Airport to ensure that airlines and passengers are safe and serviced in a timely manner on the ground, that luggage arrives on time, that safety is maintained during boarding and disembarking... The volume of work is rising, but the quality of service is not falling, on the contrary
T
here is currently no company better equipped than us to respond to the future volume of work at Nikola Tesla Airport, which is set to increase dramatically. Although our growth strategy is planned independently of the new concessionaire, we believe we will develop much faster alongside them • Your company, Sky Partner, is engaged – alongside the operator of Nikola Tesla Airport and Air Serbia – in ground-based aircraft services. Can we, as flight passengers, even see the work you do? - We take care of those initial or final segments of your journey – we ensure that airlines and passengers are safe and, more importantly, served in a timely manner on the ground, just prior to connecting the aircraft and the “finger”, the aviation bridge. We take care to make sure your luggage arrives on time for you, that it follows you if you have a connection. We are responsible for your safety during boarding and disembarking and, generally speaking, we struggle with the same torments of coordination and counting aircraft as air traffic controllers. All those people in florescent vests that you see through the windows of the plane are our highly educated and responsible staff. They are personnel who love their jobs and who, whether it’s raining or snowing, work to get you through the airport building or onto your plane as soon as possible. • You are the only operator in the Balkans to have an IATA ISAGO certificate in the field
of aircraft ground handling services. How important is that and why? - This certificate represents the gold standard of service quality and testifies to the fact that we are a company that runs its operations in a defined, lasting and planned manner. The process for obtaining all certificates, and in particular the ISAGO certificate, or the process of synchronising our organisation with those particular IATA rules, is a long-term job, because their plan and programme must
airlines from Australia to South America, or whether it’s due to the expected increase in traffic at Nikola Tesla Airport. If you have completed aviation education to secondary-school level or higher, and currently find yourself surplus to requirements, I’m sure you will be needed in a few months, because we are expanding, responding to the needs of the market, and people have always been, and will remain, the most important element of our business.
We predominantly hire people trained in the profession, i.e. people who have completed secondary and higher aviation education. We encourage everyone who’s interested to visit our site, www.sky-partner.rs, and send us their CV
be passed through various sectors of our company to ensure that the level of service, training and operational implementation will always be consistent. • Will the increase in passenger numbers to date, coupled with the announced increase in the number of flights, lead to an increase in your volume of work and the hiring of new personnel? - Sky Partner currently has 85 employees and we are constantly expanding – whether that’s due to the needs of our highly successful Centralised Load Control services, which we conduct from Belgrade in real time for
• Your contract for ground handling services at Nikola Tesla Airport runs until 2020. Will the concession agreement with company Vinci Airports lead to some changes in your operations and plans? - We cannot comment on the business plans of the future concessionaire, although we have exceptionally good cooperation with the Vinci Consortium. Our parent company has cooperated for many years with Vinci and there’s no reason to believe that will be different in Belgrade. Vinci will need support in our domain of activity that is professional, efficient and fast, and it can only be provided with that at present by Sky Partner. ■ M AY
|
163
| 17
CORPORATE DUŠAN GARIBOVIĆ, GENERAL MANAGER, SRBIJA KARGO JSC
We’re Restoring Confidence In The Railways
In just six months, the new management of Srbija Kargo (Serbia Cargo), a national operator in the transport of freight by rail, has managed to reduce company’s debts, increase its volume of operatiobs and achieve good financial results without even raising prices. They have ambitious plans for this and the coming years
F
or us, there are no strict working hours, free weekends and holidays, because we are striving to await the completion of the reconstruction of rail infrastructure with new and modernised locomotives, with refurbished wagons and new, rejuvenated staff. • The renewal of our rail transport infrastructure would lead to a significant increase in the amount of goods transported by rail. What would it bring your company, as the most serious operator in this region? Are you already preparing for that eventuality? - Everyone would benefit from the reconstruction of rail transport infrastructure, considering that there haven’t been serious infrastructure projects, reconstruction or modernisation for 40 years, and that rails in Serbia are on average 49 years old. Srbija Kargo, as a national operator, provides all possible support to its colleagues from “Infrastructure”, even though those infrastructure works currently interfere with the regular, daily organisation of rail haulage operations. Thanks to their understanding and the relevant ministry, there is no complete “transport standstill”, rather work is carried out in so-called ‘windows’, so we manage to transport planned quantities of goods during times when the railways are not closed. 18 |
163
| M AY
Srbija Kargo is taking important and serious steps in order to be ready to welcome the new infrastructure with the required load capacities and optimum torque of trains. We have just, with the consent of the European Bank for Reconstruction and Development, successfully completed negotiations with Siemens on the purchase of eight new multisystem locomotives. This relates to a 2010 tender that has not been implemented to date, and we are finalising it with a shortened delivery deadline
enterprise, but the state doesn’t furnish us with a single diner. On the contrary, we contribute 50 per cent of our annual profits to the budget of the Republic of Serbia and we strive to ensure that amount is as high as possible. Apart from that, we also take care to hire young people as our most important personnel, thus we currently have 100 trainees, and by year’s end we will accept another 70 rail technicians, who will be transformed into railroad engineers after a year.
There is daily communication between Srbija Kargo and the rail cargo companies of Croatia, Montenegro or Macedonia, which also communicate mutually. There are ever fewer outstanding issues between us, which is good both for our countries and for overall cooperation in the region
and substantial financial concessions. Those locomotives are ready to be driven in Serbia, Croatia, Hungary, Austria and Germany, and with all electrical systems that serve these railway infrastructures... We are trying to make saving and generate income wherever we can, so this year we will use our own funds to overhaul 1,100 freight wagons. We are a state-owned
I am very proud of my team, which has achieved great results in just six months, because we are leading Srbija Kargo as our own home. • Is road haulage losing in the race against rail due to the ever-increasing waiting times and lengthy columns of lorries at customs checkpoints?
- Trains can never be held at borders for as long as lorries, nor can a lorry transport the amounts of freight that a train can over the same timeframe. Moreover, all of these haulage trucks, apart from polluting the environment, destroy roads with their weight, slow down roads and endanger passenger traffic. Road transport is losing the race against rail primarily due to these reasons, and only in the end due to holding times at borders. Product from the Smederevo Steelworks used to be transported 100 per cent by train, while today that figure is only 20 to 30 per cent, as road transport experienced expansion in the meantime. The reverse process is now underway, such that many goods, as we would say, are returning from the truck to the wagon. The railroad is a must, and Srbija Kargo is making sure it is just that; that it has an active role in the market, runs a commercial policy and does everything to ensure rail transport costs are lower or on a par with road transport. If that were the case, everyone would opt for rail transport, because trains can transport incomparably more freight than lorries over the same period of time. Although conditions are in our favour, we don’t wait for clients to approach us on their
the volume of transport and thus recover the money we would receive by increasing prices. We made this decision due to the fact that foreign operators, in combination with private operators, are more competitive than us. They have a better starting position than Srbija Kargo, which is burdened with a difficult legacy in terms of the number of employees, collective agreements, obligations towards constituents from the time of the unified Serbian Railways. Preliminary results and an overview of the situation after three months show that we are
At this moment, we “hold” 96 per cent of goods haulage, and we guard every percentage point jealously and responsibly. Even our competitors now understand that Srbija Kargo is being run by responsible people who operate in market terms, and not by inertia own - rather we are developing a commercial service that actively offers our services to businesses, explaining why that is good for them and what both they and the Serbian economy gain. • Naturally, all haulage companies are striving to increase the amount of goods they transport, but you are doing that without raising prices. Is that part of your basic strategy? - We’ve chosen a tougher and more challenging route of opting not to raise the price of transportation services, despite some rail administrations in the region have opted for this measure, justifying it with inflation and growing costs. We have decided to increase
operating positively and that the volume of transport is satisfactory, while negotiations are underway for the transport of serious quantities of goods. All this shows that our decision was the right one. We are reducing procedures, while we’re also endeavouring to change people’s attitude towards the job. As such, for example, it shouldn’t happen that five days elapses between us receiving an enquiry and sending a response, rather that should be done within a maximum of three hours. With this in mind, by the end of this year we will complete our SAP information system, which will fully integrate all information on Srbija Kargo’s operations, and in parallel with
that we are also working on specific IT solutions, procuring new computers etc. • You cooperate successfully with rail administrations from the neighbourhood. Is that the right way to increase rail’s share in the goods haulage market? - xWith the instructive experiences of national operators from the surrounding countries, which were struggling more than a decade ago, under free market conditions, with competition that naturally attempted to take over as much of
their work as possible, we have established intensive cooperation with colleagues from the former Yugoslav republics, Bulgaria and Hungary. We realised that it is in our interests, both individually and collectively, to establish synergies, agree on active, even to make daily moves that enable us to ease our operations and make those of the competition more difficult, and in order for us to redirect significant quantities of goods from roads to rails. And not only that... Srbija Kargo, along with our Ministry of Construction, Transport and Infrastructure, and along with colleagues from Croatia, Bulgaria, Macedonia and Hungary, is doing everything possible to reduce the holding times for trains and goods at borders. We strive to avoid the doubling of procedures on either side of the border and to introduce shared stations, but this is hampered by the fact that Serbia is not a member of the EU. In the coming year, we will have the joint Tabanovci station, where the customs, phytosanitary inspections and railroads of both Serbia and Macedonia will be located, which will shorten retention times of trains at the border. ■ M AY
|
163
| 19
ARRIVA
Bringing The Highest Standards In The Transport Industry
I
n Serbia, Arriva provides public transport services in Belgrade, Niš, Kragujevac and the Braničevo District, conducting international, intercity, suburban, city and charter bus transport with 320 buses, covering 19.3 million kilometres annually. During the course of the last year, the company hired over 100 people, expanded the fleet with seven new city vehicles and two tourist vehicles, and introduced the first vehicle with a EURO 6 engine to be produced in Serbia. The company now has 880 employees, providing them with the necessary training, a safe and stimulating work environment, as well as the opportunity to develop and improve. Within the company operates a travel agency of the same name, with offices in Belgrade and Požarevac. One of Arriva’s goals in Serbia is to provide customers with the highest quality service, which includes the highest standards of safety and continuous improvements in reliability, making passenger transportation as easy as possible through various models of investment and strategic partnership. On that occasion, the company launched construction of a new business facility in Požarevac, which will ensure even more effective coordination between all 20 |
163
| M AY
cities where Arriva provides transport services. The total value of this investment amounts two million euros and the facility itself will incorporate the latest equipment that meets the highest European and ecological standards. This facility will enable better working conditions for employees, whilst at the same time creating a healthier environment for the local community, thanks to separators for wastewater treatment. Within the framework of this investment, it is also planned to build new roads in the area where the facility will be located, contributing to better local infrastructure. As a global leader, Arriva introduces new transport means in correlation with the Mobility partner of choice strategy. In Slovakia, the company began offering 70 bikes for hire at seven locations in the city of Nitra, while Arriva became the first bus operator in Serbia with a bicycle carrier, as well as the first to implement the latest vehicle tracking software. Arriva also introduced one more novelty to the domestic market – a search engine of the driving network, with the possibility of buying online tickets via the company website. The motive for improving this important segment of business is precisely to make
Arriva is part of Deutsche Bahn, a world-renowned provider of transport services and logistics that is one of the largest operators in Europe, making 2.2 billion journeys annually. This company provides transport services of the highest quality in 14 European countries, including Serbia, where Arriva has operated since 2013, and quickly become the first choice for travel in the country it easier for users to buy tickets, offering personalised sales where users choose their destination, as well as previewing exact departure times, service available 24/7, and the possibility to buy tickets via any device: computer, phone or tablet. The company’s expertise in various transport markets and its strategic approach are also reflected in the financial results of Arriva Group, which showed revenue growth of 4.9% in 2017 – bringing total revenue to more than €5.3 billion. This growth has enabled the company to invest nearly €400 million to fund improvements to passenger journeys in all 14 countries where Arriva is present, including Serbia, where the company has been operating for five years. With further investments, Arriva aims to contribute to the improvement of bus transport services and to create a sound basis for growth and business development on the Serbian market. This is in line with the company’s long-term goal of becoming a leader in the passenger transportation sector in Serbia, through direct investments, strategic partnerships and implementation of the highest standards of quality. ■
ZARIJA FRANOVIĆ, EXECUTIVE DIRECTOR (CEO), “PORT OF BAR” CORPORATE
We’re Protecting Our Leading Position
The Port of Bar, “Luka Bar”, is a leader in setting new standards of quality, professionalism, reliability and competitiveness in the field of port services for the handling and storage of liquid and bulk cargo in the region of Southeast Europe, and it wants to retain this status
W
e are led by one of the key principles of the business strategy – “continuous improvement”. We invest in equipment, machinery, the technology of work, staff training and environmental protection, in order to position ourselves as a port of regional significance. • You received the prestigious Brand Leader Award. Can there be more and better than this? - I’m extremely proud of this award. Apart from representing recognition for our work, it also obliges us to work more and better. I have in my sights (that I am aware of) evident potential for the further improvement of work technologies, increasing labour productivity, modernising equipment, reducing the harmful impact of transhipment operations on the environment...
goods, making the Free Zone fully functional... You have a big job ahead of you... - We have already started getting to grips with this big job – intensive activities are underway aimed at increasing the level of utilisation of the potentials of the Free Zone of the Port of Bar, with the goal of bringing tangibility to the stated intentions of companies interested in investing in the development of production and trade activities, in accordance with the provisions of the spatial-planning documentation for the territory of the port. Fortunately, we have the full support of the Government of Montenegro and the relevant ministries and institutions in overcoming difficulties and many years of accumulated problems. The entire Port of Bar is a Free Zone, and the rate of utilisation of its capacities stands at 72 per cent. In recent months,
Increasing the level of utilisation of the Port of Bar’s potential is slowed due to the inadequate quality of infrastructure connections with the surrounding region (*countries)
The basic component of the general improvement plan is a continuous advancement in the knowledge and skills of employees, all with the goal of positioning the Port of Bar as a port of regional significance. • Apart from working on the growth of cargo handling, you are also concentrating on changing the structure of cargo, bringing in new
we have been very much focused on the Free Zone, because it is extremely important – not only for the Port of Bar, but for the city of Bar itself, and for the state of Montenegro as well. • Do the existing personnel structure, technical equipment and organisation of work at the Port of Bar comply with stringent international standards?
- The personnel structure and technical equipment are still not at a satisfactory level, though a lot has been done in the last few months. Alongside intensive work on maximising the value of existing potentials, activities are also underway aimed at increasing the capacity for the transhipment and storage of dry bulk cargo (silos for bulk cement), the capacity for handling and storing liquid cargo (petroleum derivatives, acetic acid), capacities for loading and storing natural gas etc. We have made significant procurements of new equipment and machinery, and we are currently doing a lot to improve the electrical, water, road and rail infrastructure of the port area. We are investing heavily in developmental capacities. • What do you expect from the announced construction of the South Adriatic-Belgrade Highway? How much would that mean to you? - Increasing the level of utilisation of the Port of Bar’s potential is slowed due to the inadequate quality of infrastructure connections with the countries of the surrounding region . We expect a lot from the construction of the Bar-Belgrade Highway, which should eliminate existing restrictions. Of course, this would also satisfy conditions for improving connections with ports along the Danube and the network of pan-European transport corridors. ■ M AY
|
163
| 21
LOGISTICS
B y K U S H A L N A H ATA
Technology has disrupted every industry, and supply chain is no exception. With the advent of digitisation, the logistics and supply chain industry is getting a complete makeover. As logistics becomes the backbone of every industry like retail, e-commerce, consumer goods, and healthcare, the business world today is aligning its strategies with respect to the ongoing and upcoming logistics trends, such as robotics, artificial intelligence (AI) and machine learning algorithms 22 |
163
| M AY
Trends That Will Revolutionise Logistics In 2018
O
nce-futuristic technologies like Google Glasses and drones are already helping to improve speed and bring more convenience to customers. With the recent technological advancements, companies are aiming at improving their delivery happiness score and enhancing the customer experience. Based on our observation of the past two years, following is a look at the trends that will revolutionise the logistics industry in 2018. BLOCKCHAIN Blockchain and AI first certainly made their presence felt in the logistics industry this year. With the security and transparency blockchain offers, it offers an impenetrable way to store and share transactional data, while improving credibility with foolproof transactions.
For example, if customer’s ID proof is available digitally through a blockchain structure, it cannot be fudged by him at the time of delivery. Similarly, it’s possible to map the unique blockchain-enabled registration number of every vehicle against the delivery job IDs. By 2021, as much as 25% of the large global companies will be piloting or using AI and blockchain-based automation in transactional procurement. DELIVERY OF CHOICE If the customers were not already spoiled for choices in terms of buying portals, products and crazy discounts, they will also have the option to choose among logistics providers to receive their shipment by. There were only a handful of e-commerce companies offering this feature in 2017 but the trend will pick up in 2018.
This could be a game changer for logistics companies, as they can no longer afford to be in the background. They have to compete against each other with differentiated, customeroriented services. ELASTIC LOGISTICS Elastic logistics refers to the flexibility to expand and shrink capabilities to align with the demands within the supply chain during a given timeframe. Flexible automation solutions increase the agility and elasticity of the logistics infrastructure to cost effectively meet market fluctuations. It is not a “one size fits all” solution. However, it provides a customized answer to requirements like cost control, warehouse management, geographic restrictions, distribution channels, priority deliveries, and much more. Interplay of demand and supply defines the day-to-day operations in the logistics and supply chain industry. To handle the changing demand and the fluctuations in orders, logistics companies are making their operations elastic to plan the capacity according to the requirement. More and more companies will be outsourcing their fleets through third-party logistics providers (3PLs). With optimal utilisation, companies can
product, at the right time, in the right condition, in the right package, in the right quantity, with the right documentation, to the right customer, with the correct invoice. And in 2018, getting the orders not just right but perfect will be even more important than it is already. DRONES AND SMART GLASSES With automation and mobility being part of the support system to compete with and hopefully stay ahead of the competition, smart glasses and drones will help drive logistics performance to next level. Backed by augmented
Overall, the logistics industry is moving towards simplifying the most cumbersome processes by eliminating mundane and repetitive tasks to create a more effective organization while satisfying their customers’ wants and needs deliver on-time while keeping their costs intact despite the rise in demand. Elastic logistics, in short, can help by: • enhancing customer experience, • adding real-time visibility, • connecting all business processes, and • providing agility and scalability. PERFECT ORDER DELIVERIES Another trend that continues to increase in prominence is the quest for perfect orders. The complexities of last-mile delivery make the odds against fulfiling a perfect order overwhelming, but as companies are discovering, perfect orders are the ultimate measure of customer satisfaction. Perfect orders are the percentage of orders delivered to the right place, with the right
reality, integration with smart glasses will make deliveries easier by hands-free route searches, face recognition for error-free deliveries and personalised deliveries. With the rise in unmanned aerial vehicles and smart glasses adoption, the operational efficiencies of first- and last-mile logistics can be increased, along with flexibility and the speed of delivery in complex and congested metro cities. DATA-DRIVEN LOGISTICS DRIVE ANTICIPATORY LOGISTICS By anticipating demand and studying the data patterns, companies can predict product demand, and thereby plan and align their operations well in advance. In the ever-changing marketplace, staying ahead by delivering service is the key and data-driven logistics
will help enhance the future of logistics. Companies will adopt Big Data algorithms, data visualization techniques and smarter analytics to boost process efficiency and service quality by shortening the delivery times. However, the big change in 2018 will be that companies will use geography-based search trends to anticipate demand of certain products in a region and ship in advance. So, for instance, if a lot of people in New York are searching for a new book due to be launched next week, some extra copies can be shipped to the nearest hub to make the most of this opportunity.
SUSTAINABLE AND PROFITABLE SUPPLY CHAIN Logistics companies have been tying up their business and sustainability goals. With an objective to reduce carbon emissions, companies are adapting best practices that are helping them reduce their carbon footprints. The Paris Agreement and the World Economic Forum have been warning about the alarming rates of carbon gas emissions. According to the World Economic Forum, companies like UPS, DHL, SABMiller and Nestlé are among the top companies focusing on sustainability, with some revenue increases as high 20% while cutting down supply chain costs as much as 16%. In order to achieve efficiency and reduce carbon emissions, companies will collaborate with logistics companies that offer intelligent auto-routing and smarter operations. Overall, the logistics industry is moving towards simplifying the most cumbersome processes by eliminating mundane and repetitive tasks to create a more effective organization while satisfying their customers’ wants and needs. ■ M AY
|
163
| 23