Q: First, we want to know from you as the manager who is running a market leader company within the contract logistics, warehousing, transport and intermodal sector, which are the key indicators you follow when defining the trends in your industry?
Mr. Cosmin Rusu: Yusen Logistics Group mission is to become the world’s preferred supply chain logistics company – applying insight, service quality, and innovation to create sustainable growth for business and society. At a local level, our actions are defined by the group strategy, and we use the same key indicators: We invest in insight to get to the heart of our customers’ challenges. We are open and transparent in the way we work. Deeply involved in building relationships – everything we do is with the long-term in mind. Our dedication to quality is the cornerstone of our success – we get every detail right. We are constantly developing better ways of working. If we find a better way, we act upon it and share it.
Q: In 2023, seems like everybody, worldwide, internalized a new cause for the ‘’root of evil’’, in terms of wellbeing: supply chains disruption, as the one of the main drivers (together with energy) for the high inflation. What happened with the supply chains in 2024 and what should we expect for next year?
Mr. Cosmin Rusu: Generally speaking, in 2024 we still faced economic instability, inflation, and fluctuating demand plus ongoing geopolitical issues which disrupted trade routes (Red Sea issues, Middle East war) and created uncertainty in supply chains, affecting logistics and transportation. These challenges required companies to be even more agile and innovative in their supply chain management strategies. We also saw increasing regulations aimed at sustainability, therefore companies started focusing on more eco-friendly practices, in 2024. We foresee 2025 as a continuous effort of all the actors involved in the supply chain (customers, suppliers, logistics providers) to adapt even faster to disruptions, whether from geopolitical events, natural disasters, or economic fluctuations, through building resilient supply chains. Herb Kelleher nicely explained the phrase “Change or die”: “If things change faster outside your company than they change inside your company, then you have something to worry about.” This will be about 2025 and the next 3 coming years, as well. The most important trends we see for 2025: adoption of automation and robotics in supply chains (likely to rise in 2025, improving efficiency and reducing reliance on manual labor); AI, machine learning, and blockchain to enhance visibility and traceability within the supply chains (we know a lot of companies using adapted/customized ChatGPT in their day-by-day business, communication and internal processes); stronger emphasis on sustainable practices, driven by regulatory pressures, leading companies to adopt greener supply chain strategies.
Q: According to our research, the global logistics market went up 3.5% in 2023 (real terms) more than the 3% growth in 2022 and less than the forecasted rate for 2024 (4.2%). What were the dynamic for the Romanian market and for your business?
Mr. Cosmin Rusu: We have seen a logistics industry contraction in 2023 versus 2022 growth, in both demand for logistics spaces and transportation. Especially for the logistics companies having a big share of their turnover in ocean freight, the downtrend in growth was even higher, due to global decrease in ocean rates. Still, there are statistics according to the Romanian logistics industry experienced a growth rate of approximately 5% in 2023 compared to 2022. This growth was driven by factors such as the continued expansion of e-commerce, infrastructure improvements, and increased foreign investment in logistics and transportation services.
Q: Regarding the growth drivers on the Romanian market, which were the main drivers of growth in your industry?
Mr. Cosmin Rusu: We see Romania’s logistics market evolving rapidly, reflecting dynamic shifts in freight transport, delivery services, and industrial real estate. Many investors are expecting Romania to be a logistics hub for the rebuilding of Ukraine, hence logistics centers, warehouses and highways are being built in the Moldova region. Notably, the port of Constanta has emerged as a crucial strategic player in the region, especially since the outbreak of war in Ukraine. Also, for us, a main driver of growth will be the rail infrastructure, which is expected to undergo significant developments in 2025. Yusen Logistics Romania has been the pioneer of intermodal transportation service since 2008, operating private trains from Constanta to Bucharest and we foresee higher shift to rail of road volumes.
Q: Your company employes more than 1,500 people across Romania. Was it hard for you, in a tight job market, to fill the employees’ gap, if any? What roles do digitalization an AI solutions play in your industry?
Mr. Cosmin Rusu: Any company faces nowadays challenges when regards to workforce, but we could say that we overcame very well the labor force shortage from the market, by implementing strong retention programs within our organization. Our people are our most important asset, that’s why our HR department has in place a set of actions meant to decrease the personnel turnover, retain the staff, and promote the talents. We also successfully implemented collaboration with temporary staff and Asian workforce, as part of one of our value pillars: diversity, equity & inclusion. We believe in prioritizing employees engagement people development and well-being. Automations made in our warehouses support our employees by simplifying working flows, speeding-up the processes and, indirectly, contributes to diversifying the portfolio of our services offered to our customers.
Q: Yusen Logistics, who manages BIRFT (the Bucharest International rail freight container terminal) mentions as a very strong point its strategic locations (14) with extensive road and rail accessibility. Do the public investment in infrastructure - like roads and rails played a role in those sectors and the overall economy – already plays a role in your growth? When do you expect Romania to achieve its fully potential in terms of infrastructure?
Mr. Cosmin Rusu: Public investment in infrastructure, particularly in roads and rail, has always played a significant role in enhancing the logistics and transportation sectors in Romania. Better infrastructure facilitates smoother and faster transportation of goods, reducing transit times and costs for logistics companies. By all means, upgraded roads and rail systems lead to more efficient supply chains, helping businesses optimize their operations and reduce delays. Regarding Romania’s potential in terms of infrastructure, expectations vary from short-term expectancy (with ongoing projects and increased focus on EU funding for infrastructure, noticeable improvements can be expected within the next 3-5 years) to long-term vision (achieving full potential in infrastructure could take a decade or more, depending on sustained investment, political will, and effective project execution). Overall, continued investment in infrastructure is essential for maximizing Romania’s logistics capabilities and fostering economic growth, and the timeline for achieving this potential will depend on various factors, including funding and strategic planning.
Q: Which is the milestone project for you in 2024 and why?
Mr. Cosmin Rusu: Automation in our warehouses is one of the most important long-term projects (Yusen Logistics operates in Romania around 230k sqm of warehouses, therefore investing in automation is part of our continuous improvement strategy and part of our Kaizen culture). Continuous quality improvement is the cornerstone of our success, enabling us to consistently deliver the quality of service that complies with international standards and regulations, therefore on a long run this is also one of the key deliverables for us. Developing our intermodal service by adding more transportation lanes is also a milestone project for us.
Q: What factors were more challenging for your business? Was the high inflation from the recent years? Or it was the energy costs or the tight market for hiring? Anything else?
Mr. Cosmin Rusu: Indeed, high inflation was the main challenging factor for our local business. Rising inflation rates increased operational costs, affecting everything from fuel prices to wages and raw materials. Besides inflation, fluctuating and often high energy costs directly impacted transportation and warehousing expenses, as logistics operations are energy-intensive. Businesses had to navigate these costs while trying to remain competitive. Other challenging factor, we discussed earlier as well, was the labor market tightness, a shortage of skilled labor created significant challenges in hiring and retaining qualified staff. Last, but not lease, market competition was also an important factor: increased competition in the logistics sector meant that companies had to continually innovate and improve their services to differentiate themselves, putting pressure on pricing and service quality. These factors collectively created a challenging environment for local businesses, requiring strategic adjustments to maintain stability and growth in the logistics sector.
Q: What are the arguments for the local contract logistics, warehousing, transport and intermodal sector to be resilient if the local economy will reverse to downturn, in other words, to crisis?
Mr. Cosmin Rusu: If the local economy were to reverse to a downturn or crisis, several arguments support the resilience of the local contract logistics, such as: logistics and transportation are vital for maintaining supply chains, even in economic downturns. The demand for goods and services continues, requiring efficient logistics to ensure availability. The sector has historically shown adaptability to changing market conditions. Companies can pivot their services and optimize operations to meet shifting demands and cost pressures. Also, during downturns, businesses often seek to cut costs. Outsourcing logistics and warehousing can be more cost-effective than maintaining in-house operations, driving demand for local contract logistics services (so even more opportunities for logistics providers during downturns). And let’s not forget that the intermodal sector’s ability to combine different transportation modes offers flexibility and efficiency, which can be advantageous during economic fluctuations, helping to manage costs and adapt to demand changes.
Q: How would you describe a long-term sustainable future for your business model, in the context of the new rules regarding the corporate sustainability?
Mr. Cosmin Rusu: As a supply chain logistics company, demonstrating credible environmental, social and governance (ESG) performance is central to our strategy. We aim to reduce our Scope 1 and 2 greenhouse gas (GHG) emissions by 45% by 2030 compared to 2022 and to achieve net zero emissions for all services by 2050. We are also committed to respecting the diversity of our entire workforce of around 25,000 people and to providing equal opportunities. The logistics sector is growing globally, driven by rising average incomes and the associated increase in consumer spending. This growth is also supported by the rapid development and expansion of online markets for goods. However, greenhouse gas emissions from the transport of goods and within the value chain are also increasing. How we address the challenges and opportunities of climate change is at the core of our business strategy, along with other key environmental and social issues. We transparently disclose our ESG performance to date (we are golden Ecovadis certified company) and demonstrate our commitment to providing sustainable supply chain logistics services. As ESG awareness and regulation increases, we will continue to hold ourselves accountable for our performance, respond proactively and embed resilience and sustainability in everything we do. To achieve sustainability, we need to work together across national and regional boundaries. We believe that by creating an environmentally responsible supply chain, we can make steady progress towards sustainable growth, one step at a time.
You can also find the full interview in the document below:
