1. How would you describe the evolution of the Romanian freight market this year?
The Romanian freight transport market has registered a growth in volume and is now around EUR 7 billion. This growth is sustained by the spectacular evolution of exports last year, which reached a record level of around EUR 52 billion in 2014, and by the increase in the airfreight sector. But the growth was also observed in the other sectors, as well, such as sea freight or trucking.
The biggest increase comes from the airfreight sector, followed by trucking and then the sea freight. As a share from the total forwarding market, the trucking segment holds about two-thirds of all goods delivered.
More than that, sea freight represents a strategic sector in Romania. The amount of cargo passing through the port of Constanta also registered a growth this year.
2. From your point of view, which freight sector has been the most dynamic in 2015? What are your expectations for these sectors in 2016?
The most dynamic sector for us has been the airfreight sector. The clock battle became increasingly fierce and decreasing the delivery time has become a top priority. The clients of our clients need them to produce and deliver the goods faster and, in that moment, choosing the airfreight can be a solution for them. IB Cargo is a professional partner on the logistic side for all its clients, offering them personalized freight forwarding solutions, not only quotations.
Thus, we adapt to our clients’ needs and continuously develop our services in order to offer them personalized solutions. IB Cargo added On Board Courier and NFO (Next Flight Out) services to the normal airfreight services.
On Board Courier is the service that delivers the cargo in maximum 24 hours to any destination. The client receives a quotation in maximum 30 minutes, 24/24/7. After the client confirms the request, an IB Cargo representative leaves with the client’s cargo on the next passenger flight and accompanies the goods during the transportation. At present, we have 1-2 On Board Courier services per day for clients from automotive, fashion and electronic industries. On the other hand, the NFO (Next Flight Out) is the service that offers a transit time that is half compared to the normal one.
Bucharest is and remains the centre of the airfreight market in Romania because the biggest airport in the country is here. Nevertheless, the big freighters still don’t have runways in Romania, and a solution which we also offer is to combine airfreight with trucking from Frankfurt and Vienna in order to perform door-to-door delivery.
3. Following some simple quantitative and qualitative indicators, could you tell us what IB Cargo represents at this moment in time?
IB Cargo is an independent freight forwarder that offers personalized solutions for our clients, no matter if they are multinational companies or local entrepreneurs, in order to fit their needs. Thus, we perform one stop shop freight forwarding services worldwide. In 2014, we had 1,923 clients, most of them recurrent, due to the fact that they are satisfied with our professional services.
More than that, regarding the transports we operate, IB Cargo chooses the best partners in each country, so that our clients’ cargo is always safe and picked up and delivered on time. Thus, we are members of two international networks of freight forwarders, which operate like us in every major port/ airport in the world.
In Romania, IB Cargo is one of the top players for the LCL services (less than a container load). On this type of service, we have direct weekly consoles from Shanghai, Ningbo, Qingdao, Shenzhen, Singapore, Hong Kong to Constanta for imports. On the other hand, IB Cargo can also operate exports via Hamburg (not only Constanta), reducing the transit time, because this port registers a higher transit of cargo and the departures are more often.
4. How has the economic growth in 2015 impacted your business and what are your plans for 2016?
Romania is a country where production and exports registered growth. Along with the retail network, the logistics services are also developing, supporting both production and exports. Thus, logistics is one of the most important elements of the sales chain. If there is an inefficiency in the chain, this can cause a 10-15% increase in the goods’ final prices.
IB Cargo continuously improves its services and in the current year and the one to come, we will continue doing this. Overcoming our clients’ expectations is the most important thing for us and that is why we offer the personalized forwarding service. In this way, we will continue to be the trustful partner to whom our clients fully externalize the logistic part.
5. From your perspective, what does the field in which you activate need right now and what are your concerns for the next period of time?
One important fact here would be that, at present, the products imported from Asia arrive in Constanta port only in a very small quantity. This happens because the Romanian legislation forces importers to pay the VAT in advance, before clearance of the cargo and, in this way, they choose the western ports as point of entry in Europe. In ports like Koper, Rotterdam, Hamburg the importers are not forced by the law to pay VAT in advance like in Constanta.
The procedure of VAT refund in Romania is very laborious. There are some exemptions, such as obtaining the AEO certificate, but this takes a lot of time and the companies go through a rather bureaucratic procedure in order to get it. This is a huge loss for the Romanian economy because many foreign companies choose other ports (Koper, Rotterdam, Hamburg and not Constanta), even if logistically and cost-wise, it makes absolutely no sense (they need to pay for trucking from these ports to Romania).
In addition to this, I would add Romania’s poor infrastructure, but we really hope that some of these problems will have solutions in the near future.
6. Undoubtedly, the global oil price drop was something that only few anticipated. What do you think contributed more to the growth which you registered: external factors or the solid management strategy? Please detail.
IB Cargo’s biggest asset is represented by the people we have in the company, who always find or tailor solutions for our clients in order to answer to their needs. We are flexible, dynamic, reliable, always near the clients when they need us, we have a long-term vision and we always improve ourselves as professionals in-house and with the help of external consultants.
Our management strategy is also an important factor. It is an entrepreneurial one, where everybody contributes to the company’s growth direction.
On top of this, the external factors are also important. As we mentioned before, the logistics sector growth is connected to the production and exports growth, along with the conditions: custom formalities, taxes etc.
Thus, it is a mix of the above-mentioned factors, from which the higher percentage is due to internal ones.