According to Mariusz Borkowski, AsstrA Polish Region Country Manager, since 2017 the corporate group has noted 20% more Eastern business despite a fall in Polish-Russian trade after the introduction of sanctions, the unstable political situation in Ukraine, and various tariff and non-tariff trade barriers.
How did AsstrA Polska do in 2018?
In 2018, the Polish offices of the AsstrA-Associated Traffic AG transportation and logistics group continued executing their strategy from 2017, developing further, expanding market share, achieving additional volume, and expanding their offerings. The turnover of the corporate group increased significantly. Compared to 2017, AsstrA generated 42% more sales revenue in Poland for the corporate group. Key success factors were increased investments in operations, sales, accountancy, and marketing personnel, especially regarding teams organizing transport to the East, where AsstrA does significant business. In mid-2018 an office was opened in Małaszewicze to support activities dedicated to intermodal and rail transport operations. New offerings such as rail freight and storage services have been added. In 2018, the first integrated contract logistics operations were also implemented. Additionally, Lean Management was introduced to standardize and optimize current processes.
The Polish branch is growing rapidly!
Yes, I’m happy to say. One of our highlights for last year was offering high-quality services in the organization of transport from Poland to Russia for the Polish 2018 World Cup football team. Experts from AsstrA Polska were entrusted with the transport of equipment to and from Sochi. Our experts in Warsaw worked through time pressure, consular oversight, and Championship-specific transport restrictions to make the project a success. Thank you!
Are our Eastern transport statistics holding up despite the difficult geopolitical situation?
Transport to the East is AsstrA’s core focus. For over 20 years, the company has been constantly building and expanding the spectrum of its activities and competencies in the CIS. Thanks to our well-established position in these markets, we have actually posted increases in volumes transported to Russia, Ukraine, and Belarus. The corporate group has noted 20% more business here despite a fall in Polish-Russian trade after the introduction of sanctions, the unstable political situation in Ukraine, and various tariff and non-tariff trade barriers.
Agreements with transshipment terminals, our three in-house customs agencies in border zones, and our office in Brest provide outstanding support for East-bound road logistics, which accounts for 95% of our operations in the region. The remaining 5% involves intermodal transport for various cargo types, including oversize. We are optimistic about the development of shortsea transport from Poland to Russia.
Year-on-year orders to Ukraine were up 26%, our strongest growth in this category. Orders to Belarus were up 15%, while Russian orders were slightly down on the year.
Do the tense political situation and sanctions affect transport to the East?
The conflict in Ukraine and the attempts to stimulate internal production in Russia have led to less international trade and a resulting decline in the volume of transported goods from Western Europe. Another factor influencing transport market conditions is the amount of rubles or hryvnas in the wallets of average Russians, Ukrainians, and Belarusians. From the beginning of 2019, the situation does not look optimistic. The embargoes are leading to significant price increases that are reducing the spending power of CIS citizens and hurting demand for foreign-produced goods. On the bright side, average birth rates are increasing as is the consumption of "basic necessities.” Therefore we can look positively into the future.
What does the carrier availability situation look like?
Uneasy negotiations between Poland and Russia concerning 2019 permits led to 20,000 fewer permits than in 2018. Each country has received 210,000 permits, of which 146,000 are for round trips and 64,000 for / from third countries. It seems to be enough to meet the needs of the market.
The situation is similar with Polish-Ukrainian permits for 2019, where the quotas were reduced by 40,000 for each party. Both countries have 100,000 permits for general transport and 60,000 for transit. Despite these hopefully short-term difficulties, transport to the East is still on an overall upward trend. It is a promising market.