Rohlig Suus Logistics is one of the largest logistics operators in Central Europe. The company specializes in managing logistics and global supply chains. It is involved in freight forwarding on the basis of transport by road, sea, air and intermodal carriage.
About estimates, opportunities and challenges, we talked to Dragos Boranda, Managing Director – Rohlig Suus Logistics Romania.
1. With almost 30 years of experience and an outstanding presence in Central and Eastern Europe, Rohlig Suus Logistics is an important partner for the Romanian business environment. How would you describe Rohlig Suus Logistics in Romania in figures?
Rohlig Suus Logistics is the largest Polish logistics operator in Central Europe, specialises in end-to-end logistics and global supply chain management. In our development strategy, we focus on diversification – both in terms of products, industries and geographies. For years, we have been observing the growing importance of Romania in the CEE region, which is why in 2020 we decided to open a branch in this country. The branch offers logistics services related to rail, sea and air transport as well as also started to develop the road transport. Our advantage is access to a wide base of partners. The key sectors to which we address our offer include the automotive, IT, retail, food and industrial sectors. Romanian branch is our youngest company with a very large growth potential. Especially in the field of road transport.
On the Romanian market, we have started to develop our white goods retail business in the Far East; volumes are growing and several industrial projects are already underway. The next important step is to invest and develop the contract logistics and groupage services sector, including the opening of a warehouse in Romania. The second strategic objective after contract logistics is the development of e-commerce and e-fulfilment services. In last financial year we have recorded an increase of 100%, compared with previous one.
Many companies that were present in the East began to expand towards South America, Africa, the Middle East or the aforementioned Central Asia. These markets are still very absorptive, despite the strong presence of Chinese companies there. This is why we invest heavily in the development of our company in Central and Eastern Europe. We are thinking about potential acquisitions in this region to grow faster. Although the difference between the level of costs in this part of Europe and the costs in Western Europe is decreasing, doing business in the CEE region still gives a certain advantage.
2. Does the business environment in Romania differ from the other countries where the Group is present (Poland, Czech Republic, Slovenia, Slovakia, Hungary)? Does the same business strategy apply?
Many international companies treat the countries of Central and Eastern Europe as one business unit. In many areas, these economies are similar – they have a similar history, ambition and development prospects. Of course, each of these countries has its own advantages, but the region can be perceived as one. We recognize this trend and the needs of our clients and we are gradually increasing our presence throughout the region, not only in Poland and neighboring countries. We focus on development both organic and through mergers and acquisitions.
The fact that the Romanian market is also important for Polish companies can be proved by their numerous representation on this market. Naturally, we want to support Polish companies in their presence on the Romanian market. Of course we also want to reach Romanian business and support them in domestic and international growth.
3. How did you end 2022 and what are your estimates for 2023?
Last year was difficult, one of the reasons was, of course, the outbreak of war in Ukraine. However, since the beginning of the pandemic, the entire industry has been operating in crisis mode. Despite this, we are doing very well, because thanks to a very diversified customer portfolio, geographical diversification and a very comprehensive range of services, we were able to quickly adapt to changes. But for Rohlig Suus Logistics 2022 was a good year – both in terms of financial results and the level of business development. Our financial year ends in March, but we can say that in individual business areas, volumes increased significantly or remained at the level of the previous year, despite a noticeable decline in the fourth quarter in some industries. In 2021, we generated revenues of PLN 1.978 billion (+71%). Maritime transport accounted for the largest share of our record growth. In the less-than-truckload (LTL) transport segment, volumes growth exceeded 30% year-on-year, while in full container load (FCL) segment grew by more than 15% year-on-year. We also recorded a significant growth exceeding 40% in air transport, 20% in rail transport and 9% in road transport.
2023 will be particularly demanding in terms of cost optimization and dealing with high inflation and rising business costs. As an organization, we have a “one step ahead” strategy. We believe that moments of slowdown or a smaller or larger crisis are for thinking about the development of the company. We believe that the economy operates in a business cycle and after a market crash there is always a rebound and you have to be prepared for that. We have conducted the acquisition of Expert – polish company, which provides last-mile e-commerce delivery services as well as value-added services such as bringing in or assembling delivered furniture or household appliances. We are thinking about further acquisitions on the markets of Central and Eastern Europe, we are strengthening ourselves organizationally to be ready for a period of economic recovery.
4. The present is facing with 3 big enemies: post-pandemic, the Russian-Ukrainian war and inflation. To what extent does the political-economic context impact the activity of Rohlig Suus Logistics in Romania?
The increase in fuel, gas and electricity prices hurt us the most. I mean not only the impact on transport itself, but also on contract logistics. In addition to energy prices, the prices of building materials rose sharply. Labor costs also increased. Suus’s answer to this challenges is diversification. Not only with regard to services (incl. offering all options of freights, contract logistics, providing 4PL services, and SUUS Advisory, i.e. helping our customers build a competitive advantage through supply chain optimization), but also geographical diversification, resulting in the opening of a branch in Romania
The countries of Central and Eastern Europe may become a hub for rebuilding Ukraine when the war is over. Goods from all over the world will be transported to our region for the reconstruction of Ukraine. CEE governments need to invest in infrastructure development to maximize the development opportunity once the war is over. Already, in some regions of Ukraine, the first steps are being taken to rebuild the infrastructure, and the commitment of all countries in the region can be seen in this action.
5. Transport and utility costs have increased. Have you passed on the increase to the customer or streamlined the business?
Without exception, every area of the economy has felt the rising costs of doing business. At Rohlig Suus Logistics, we have been building resilience for many years. Both through diversification and the implementation of further process optimization. Thanks to this, we were able not to transfer the entire increase to customers. However, there is no denying that the increase in costs in contract logistics or air freight is currently very high, which also affects the costs incurred by customers.
6. You offer complete logistics solutions – road, air, sea and rail transport, logistics and warehousing, even project cargo transport. How do you differentiate yourself from the competition?
We implement forwarding processes based on road, sea, air and intermodal transport, as well as contract logistics, customs services and cargo projects (transport of oversized cargo). The company currently employs more than 2,000 people in more than 30 branch offices in 7 countries (including Romania, Slovenia, the Czech Republic and Hungary) and manages more than 330,000 m2 of warehouse space. Such a large scale of business allows us to comprehensively manage our clients’ global supply chains.
Our over 30 years of experience and the comprehensiveness of our offer allow us to be advisors to our clients. We have a very good understanding of market realities, and we advise them solutions that are based on the actual infrastructure and that can be implemented in their business environment. We offer them e.g. mentioned Suus Advisory, but also LSD (Logistics Solution Design – designing personalized solutions for the specific needs of our customers), and VMI. Increasing costs and at the same time increasing customer expectations require the construction of flexible supply chains or the modification of existing ones. SUUS Advisory helps customers respond to strategic supply chain challenges. Therefore, we are not only a comprehensive logistics operator, but also an advisor in building supply chains.
7. The fact that Romania has not joined the Schengen Area is a big minus for Rohlig Suus Logistics? What other challenges do you face in our country? What are the main opportunities?
Over the years, we have already learned how to operate despite the challenges and adapted to market reality. We very much hope that Romania will join the Schengen Area very soon and consequently it will cut the time spending at border crossing. The biggest challenge in Romania is represented by the lack of roads infrastructure, which reduces performance in logistics. In terms of opportunities, Romania is still one of the fast growing countries in CEE, meaning that we attract a lot of investors, which need logistic services as well.
8. What is the company’s focus for the next few years, say 2025+?
Our largest market is Poland, but we are also focusing more and more on the CEE region. Development on the Romanian, Czech, Slovak, Hungarian and Slovenian markets is one of our strategic goals. As I said, many customers perceive our region as an unity, which is why development in each country is important and our offer is heading in this direction. We want to be the leader of the region.
Our strategy focuses primarily on the values that are most important to us – building a friendly workplace, sustainable solutions that support reducing the negative impact on the environment, as well as advising our clients on stable supply chains. We know that there is still a lot of work ahead of us, but we believe that by following the designated route we will be able to achieve it.
In business development, we will continue to focus on diversification, which turned out to be a “protective umbrella” for us during the recent crises. We know that this strategy meets its assumptions and not only protects our business, but also allows us to grow in times of economic slowdown. Of course, we are unable to prepare for many events, which has been clearly demonstrated in recent years. For this reason, we must be ready for changes and quickly adapt to the new reality. Only change is certain. We will also closely follow emerging trends and power shifts in geopolitics, which will also affect global supply chains
9. What do you imagine the transport and logistics industry will look like in 2030?
The pace of changes and their direction are determined by the regulations of the European Union on the one hand, and geopolitical changes on the other. Certainly, the key role affecting the logistics industry is currently the area of sustainable development. We notice an increasing awareness of customers in the ESG area. More and more often, companies ask us for information on the carbon footprint, our strategy and activities in this area, as well as for reduction targets, which we are currently working on setting. We hope that by 2030, low-carbon transport solutions will be available. Intermodal transport may gain in importance, in which road freight will be responsible only for the first and last mile. We are also observing changes in sea freight and moving towards the electrification of shipping. In air transport, the use of low-carbon fuels will certainly become more common, and contract logistics will be fully based on sustainable solutions.
Another trend that may shape logistics in 2030 is nearshoring. In our opinion, it should be understood today primarily as increasing the diversification of supply sources, i.e. one does not rely almost 100% on China, but finds suppliers closer to their markets. Relocation of factories is also an option, but these are lengthy processes.
10. Dragos Boranda, you have almost two decades of experience in the field. What has been the biggest challenge this industry has offered you?
I started a work in TSL industry organizing special transports, as project cargo. In this industry, you must constantly adapt to the client’s needs and you must learn to combine new services and solutions, in order to bring the project to a successful end. I would say that in our area of activity we must be very open to adaptability to the new market conditions, considering that they change very quickly. So the challenge is a constant one, and I learned to work with it and not against it.
Few words about Dragos Boranda
Dragos Boranda graduated in economics. He has been working in the logistics industry for many years. He started his professional experience in 2006 in a family forwarding company, where he worked in the area of project cargo and multimodal transport. In 2014, he joined the Gebruder Weiss group, where he held the following roles: Project Cargo Business Development, FCL Team Leader, Sea Freight Manager and Branch Manager of the Bucharest office, managing a team of over 30 people.
Photo Source: https://www.suus.com/ro-root