Raben Group’s Damian Krzywosądzki on capacity crunches and improving subcontractor relations
The sharp fluctuations in demand in the last 18 months have proved to be a challenging time in the logistics industry. While lockdowns saw ecommerce boom, the end to lockdown brought about sizable shifts in demand that arguably placed even more focus on capacity. Now, with the pre-Christmas peak on the way, major players in the industry are faced with an even stiffer test of securing enough capacity to meet their customers’ demands.
Among the big names keen to rise to this challenge are the Raben Group, whose recent acquisition of BAS Logistics will help provide more capacity in the Benelux region.
To discuss what Raben Group is doing amid the scramble for capacity, how the company is seeking to boost its relationships with subcontractors, as well as its recent announcements and future plans, we spoke to Damian Krzywosądzki, Group Business Development Director at Raben Group.
Thanks for taking the time to talk to us at Trans.INFO Damian.
Despite all the challenges 2020 presented, Raben ended the year with revenues exceeding 1.26 billion Euro. Although 2021 hasn’t exactly been a walk in the park for the logistics sector, things do appear to be looking more positive as we approach Q4. Do you expect to eclipse your success of last year?
2020 was not easy – not only for Raben, but for all transportation companies and all the LSPs on the market. However, in 2020, we managed to achieve 5% more revenue compared to 2019. It was a good achievement on our side.
This year we are also facing challenges but a little bit different. The capacity of the LSPs market is the biggest topic. We have been concentrating on two key areas: one is securing the business of our customers, and the second is putting a lot of attention into future needs of customers in upcoming months.
At Raben we have healthy split of customers’ portfolio. We service FMCG customers as well as technology, retail, automotive, chemical industries and others. When we concentrate on further strengthening cooperation with our core customers and securing their businesses, then we have to deliver services of the highest quality. I would say we are successful at this, we are looking into new possibilities on the market. We observe the market closely, and we can see that the volumes in the B2C sector are really booming. This trend is also reflected in our own network.
In the first half of the year, when looking into the volumes of Raben and other key players on the market, the figures were really good compared to 2020 – especially in the B2C sector.
The main goal for us this year is to improve growth and revenue, and in these terms, 2021 is looking good for us despite all the difficulties.
Back in July of this year, Raben announced the acquisition of the BAS Group, bringing with it, 50.000 m2 of warehouse capacity and BAS’ own fleet of trucks and trailers. Was a desire for more capacity one of the factors that influenced your decision to acquire the company? What other benefits do you feel the acquisition will bring to Raben Group?
It’s a significant step for our Benelux operations. As it is well known, Raben started off in the Netherlands in 1931, so the company has 90 years of tradition.
Therefore, it’s not surprising that when the opportunity popped up, we finished the acquisition of BAS logistics. The goal of the takeover is to strengthen our position and network in the Benelux region.
BAS logistics has its locations in the West, Rozendaal and Etten-Leur. This gives us new possibilities when it comes to the development of our network – not only in the Netherlands, but also in Belgium and Luxembourg. Naturally, it is something that we have taken strongly into consideration.
For example, BAS Logistics gives us new possibilities with regards to connections from the Netherlands to Italy, because they have intermodal flow between these two countries.
We would like to tap into their intermodal experience. One of the other main reasons was obviously the increase of warehousing capabilities. They are bringing additional square meters into the Raben Group, which is a great opportunity not only for us, but more importantly, for our customers.
This is a mid-sized company and very dynamic one. We are happy with the acquisition and we are really looking forward to the future of the Benelux operations in the coming years.
One of the areas that is attracting a lot of attention in the industry at this moment in time is of course capacity. Do you foresee a capacity crunch coming to Europe in the coming months during the pre-Christmas peak? If so, how can road transport and logistics companies like Raben alleviate this issue?
As I mentioned, the first half of the year was already challenging for LSPs. All the major players faced issues. Then the summer vacation period gave us a moment to catch some breath.
We do expect that the volumes in the pre-Christmas peak will come for sure, as it does every year – even last year in the middle of a covid wave. This year we are expecting something similar. We observe the problem very closely and we constantly monitor our operations.
During the last year, we opened new cross docks, in Poland, Romania and Hungary and we have developed our assets in Germany. This investments were done in order to be closer to customers; each cross dock means that our trucks travel less kilometers.
The other thing is that we are constantly looking into our international network and distribution lines. We have opened new lines, for example, from Poland to Germany. On some of those lines, we are running our service 24 hours a day. Of course we are all still active in CEE region where we have more than 110 international regular shuttles daily.
In order to timely deliver goods, handled to us by our customers, we also have to care about cooperation with our subcontractors. We need to have internal resources, including subcontractors’ capacity, to be able to face up to the challenge. To enhance this cooperation, we are constantly listening to their suggestions, proposals of improvement, etc. We value partnership and open dialogue, so that together we can meet the expectations of the competitive market.
Indisputably, this value is also of profound importance with regards to the communication with our customers. We invite them to look together on the processes, map them and think about possible optimizations.
In the history of Raben, we have always wanted to be a partner for our customers. Right now it is especially important; we want to sit together with our customers to see where we can change and how our customers can change their internal processes to meet the requirements of the market.
On the top of that, I would say further investments into process optimization are crucial. Not only in operations, but also at the office level. It’s very important, as is digitalization. This is something that we are putting a lot of attention to.
One key aspect of freight capacity management is said to be the establishment and maintenance of relationships with subcontractors. How does Raben ensure that these relationships are healthy and sustainable?
I would say this is the most important point.
When we are talking about market challenges like those we are seeing in the UK at the moment, cooperation with subcontractors and drivers is vital. Not only for Raben, but for other players on the market.
At Raben Group, we are the partner of a collaborative platform named Responsible Trucking and consisting of 12 leading companies, both transport buyers and transport suppliers like BMW, H&M, IKEA, Maersk and others.
Our goal is to implement a common strategy to work together with our subcontractors. Therefore, we have implemented Truck Transport Social Guidelines to improve our drivers’ working conditions. It’s all about placing attention to such issues as driver work and rest times, health and safety, as well as freedom of association and non-discrimination.
This is an activity that we are developing and we want to continue this cooperation in the further, together with our customers. The next step would be to develop a kind of spot check, which will allow us to follow and to hear the voice of the drivers. This is quite important for everyone on the market right now.
Moreover, we are running leasing programs for our subcontractors, encouraging them to invest into low-emission fleets and therefore meet our sustainability goals. For example, in Poland, we aim to eliminate the use of trailers with emission standards lower than Euro5 five and Euro6 norm.
Finally, we are also educating the market and sharing our know-how by webinars, trainings as well as workshops. Recently we organized a webinar with a young, female, Polish truck driver and influencer. Thanks to this initiative, our customers and business partners could see the work of the driver from her perspective and learn what a day in a truck looks like. It was really enlightening as there are few women lorry drivers in the industry.
The much-reported driver shortage issue is not just affecting the UK, but also a number of other European countries. This inevitably means that it is more important than ever to ensure that truck capacity is as optimized as it can be. A side benefit of this is, of course, also a reduction in CO2 emissions, which something Raben is passionate about. How is Raben ensuring that it is getting the most out of its drivers and its equipment?
Well, one of the side effects of Covid was the speeding up of LSP optimization. That’s had a really positive effect. Everyone faces similar issues, and we recognized at Raben that if we don’t focus our attention on optimizations and digitalization, we will not develop as a group.
In countries where law allows it (e.g. in the Czech Republic, the Netherlands and Germany, Scandinavia), Raben Group also uses a road train in the “Jumbo” version, also known as the LHV – it is a large tractor that pulls two swap body containers and a traditional double deck semi-trailers behind it. The payload of such a vehicle increases up to 102 EUR-pallets. It is a truly cost-saving solution for regular routes. It’s obvious that if we ship more pallets between our terminals, it means that the CO2 emissions per pallet is lower.
However, in order to implement such solutions in other countries, European regulations are needed. It’s not an easy task. We really hope that in the near future the legislative process shall speed up, considering green issues are top of the agenda right now.
Moreover, we are turning to our customers to ask about how we can improve volumes together and optimize routes. For example, together we analyze the way of preparing pallets and check the possibilities of using double deck trailers. If we are successful in our recommendations, we will decrease the CO2 emission per pallet.
What’s more, we already have CNG trucks in Poland and Germany – mid-size trucks for the local and close range deliveries. In order to shorten the transportation routes, we are using tools like Smart Tour – an automated tool that prepares routes for our trucks and gives us really significant possibilities to limit the number of stops.
Looking forward, what are Raben’s plans and ambitions for the near future and beyond?
At Raben we are always looking forward to the future and for new challenges. It’s not just a marketing slogan – it’s really part of our DNA.
We consider ourselves as “People with drive”. Each of us has the internal drive to logistics. From the very beginning of Covid, we were saying that this situation should not be a threat to us, because it affects everyone on the market. Therefore, our goal was to look for the possibilities, to stay very close to the customers. And this is also our ambition for the future – we want to support and secure our customers and their business by delivering good quality services.
We will also put all our efforts into reinforcing our position as the leader of sustainable development in the transportation and logistics sector. This is the top priority for us. Indisputably, by doing that we will strengthen our position on the market and recure the resources.
Another challenge is to further develop our trade lanes and improve volume flow between the countries we operate in.
Last but not least, there is automation and digitalization. This is another top priority on our agenda – providing new technological solutions such as ETA. We were the first groupage provider in the CEE region to provide customers with information about where the driver and a pallet is in a real time.
Digitalization and automation of processes will enhance the work of our drivers, warehouses, office employees as well as speed up communication. Paperless logistics is the future and we really want to be the trendsetter in this area. These would indisputably make us the preferable partner to cooperate with, not only for our customers, but also subcontractors.