Waberer’s, the Hungarian transport and logistics company, replaces its taxi model to focus on recurring orders and major trade routes within Europe, the company announced.
Waberer’s has decided to transform its business model in the coming period: the International Transportation Segment has, until now, followed a “taxi” model that optimised the match between trucks and orders centrally and continuously. According to the company, this model produced a lot of uncertainty in terms of revenue streams and truck utilisation and relied heavily on the transportation spot market that had lower profitability. Therefore, the company is shifting to a different business model.
A “trade lane” model will be introduced, which is focusing on recurring orders and will be concentrated on the main trade routes within Europe.
In line with the model change, the International Transportation Segment (ITS) will shift its business focus towards contracted clients, enabling higher revenue certainty as well as higher service quality.
In the 6-months implementation phase, the processes and capacities of ITS will be gradually adjusted to the new operating model and market situation, says the company’s announcement.
Our new initiatives were developed in the spirit of transforming Waberer’s International Transportation Segment into a more client-focused, stable and higher-margin business The plan to be implemented in the course of the next six months will mark a major step towards the turnaround of ITS in profitability and will contribute to Waberer’s emerging from the crisis period as a stronger company” – Barna Erdelyi, CEO and member of the Board of Directors, added.
Poor financial results justify major changes
As we have reported earlier, Waberer’s International financial results regarding the first quarter of 2020 were not telling a success story. The company’s net loss was 2.5 million euros during this period which wouldn’t sound very bad compared to the 4,4 million euros loss of last year’s same period. However, the company’s shares were then sold for half of last year’s maximum price – 752 Hungarian forints (approx 2, 15 euros).
The company’s revenue decreased by 5% year-on-year in the first quarter of 2020 to 174 million euros. Compared to the first quarter of last year, revenue was 17% lower in the International Transportation Segment (ITS) as a result of the fleet reduction programme, partly offset by the impact of slightly higher prices. In the Regional Contract Logistics (RCL) segment, revenue grew by 33% in the first quarter as a result of a new large automotive in-house logistics operation that started in December 2019.
At the end of March, with the coronavirus crisis having a significant impact on the European logistics industry, Waberer’s introduced immediate measures. One of the most important reforms was the change of the CEO – Robert Ziegler left the company and Barna Erdélyi was appointed, former Chief Financial Officer, was appointed in his position. At the same time, the company suspended the operation of a significant number of trucks; re-negotiated wages and introduced unpaid leaves.