“One Stop Shop” full services
With activities focused mainly on customs brokerage, transport and forwarding services, Euroccoper is increasingly focusing on logistics operations, activities which it has developed in recent years and which currently account for almost 30% of the total turnover of 10 million euros in 2018. When celebrating 25 years of activity, the company founded by Aldo Roccon in 1994, chose to promote its services with the slogan “One Stop Shop”, aiming to provide to its customers the entire logistics chain, from customs services, to transport and to distribution operations, with a focus on storage and value-added services. We talked about all these news with Romeo Dumitru, National Logistics Manager at Euroccoper.
Text: Alexandru Ionescu
The warehousing activity is gaining more and more ground in the turnover of Euroccoper, a company that provides integrated logistics services by means of the four main segments in which it operates: customs brokerage, international shipments, warehousing and national distribution. Created from a conjuncture, mostly at an experimental level, the logistics developed a lot within Timisoara company, and at the end of last year accounted for approximately 30% of the total business. “The activity is growing, but the largest share is that of the customs services and storage, where we managed to streamline the activities by optimizing costs, while increasing volumes, not so much from a major increase in the number of partnerships – we have approximately 50 permanent clients and other 10‐15 regular collaborations – but mostly by a development of our partners. For the total storage activity, we notice an increase in volumes of 10% “, explains Romeo Dumitru, National Logistics Manager of Euroccoper, who joined the team in June last year, taking over the tasks of coordinating the storage activity at national level. Regarding the total growth, in recent years the business of the company headquartered in Timisoara has been in a continuous growth, the increase at the consolidated level of 2018 being more than 30%, compared to the similar period of 2017. In Romeo Dumitru’s opinion, in terms of logistics, this is due to an efficient use of storage space, additional staff, along with some changes in the work method, such as adapting the work schedule to customer needs, thus compensating delays caused by customs operations and the extension of the work schedule to several shifts per storage, so as to avoid the additional costs incurred by the customer, both in cases where maritime shipping lines or other penalties were involved. Last but not least, in order to automate as many processes as possible, Euroccoper has also invested in modifying the Warehouse Management System – WMS0, thus managing to reduce the degree of human involvement in warehousing operations by 20%, “a degree which we hope to reduce even more”. “By this reduction of human involvement and by imposing a work discipline, you manage to gain a lot in terms of efficiency. The back ‐ office staff also matters a lot, we tried to have a LEAN approach, not to have too many hierarchical levels and thus to ensure an increased autonomy to the project managers. ”
Customers that are receptive to price updates
If initially the logistics activity of Euroccoper was started in Timisoara, where the company is also headquartered, being oriented towards the Fast Mover Consumer Goods segment, later the company opened warehouses in Bucharest and Constanta, preferring another niche, industrial logistics. “Recently, in addition to the other elements that have influenced the increase in storage costs, the biggest pressure comes from the increase of the minimum national wage in three phases.
As a result, the pressure from human resources was very high and we had to go to our customers with the numbers on the table, especially since in the storage activities, the human resources have a very large share in everything that means handling goods “, explains the national director of Euroccoper logistics. Fortunately, the company’s long-standing partnerships have resulted in a correct approach on both sides and fee updates were obtained, which have varied from case to case depending on volumes.
Extensive storage areas
Constantly in recent years, the company has made investments in storage, both in the endowment with equipment – specialized vehicles, video surveillance systems, software, as well as in the expansion of storage areas, in order to provide sufficient space for operations. Thus, in Timisoara, the logistics area expanded to almost 12000 m2 in two locations, one at the headquarters and another near Timisoara Airport, along with an outdoor platform of 5000 m2 for an important customer in the field of electricity. It should be noted, however, that the storage activity is carried out on a ‘multi-user’ basis, comprising several customers with several types of activity, including the Fast Mover Consumer Goods – FMCG area. Thus, half of the first warehouse in Timisoara is occupied with automotive goods, while the rest of the warehouse is occupied with goods related to other industrial segments. An area of approximately 1000 m2 of temperature-controlled storage is currently leased to a Euroccoper partner, a dairy company, which needed to increase its space, which it now manages on its own. “We specialized in customer-specific products, even if not all of our customers are in the industrial area.”
If in Timisoara we are talking about a warehouse owned by the group or another rented one, in Bucharest we are talking about a long-term rented warehouse, in which an inner surface of more than 10000 m2 and an outer one of approximately 20000 m2 is operated.
Apart from Timisoara and Bucharest, the company also owns a logistics center in Constanta, divided into two warehouses, one of 500 m2 in the Constanta South (Agigea) Port and another one of 2000 m2, recently modernized, in Constanta North Port, now being in progress a project to modernize an additional area of approximately 10000 m2 in the Constanta North Port (free zone) which is composed of an external platform suitable for storage of containers or industrial equipment and a covered area of approximately 2000 m2.
Although there are common customers in the three locations, the profiles of the company’s partners are slightly regionalized. If in the West area we are talking about automotive, in the South area most customers work in the industrial segment and Fast Mover Consumer Goods – FMCG – canning, and in the East area general goods from all industries, mainly imports.
Euroccoper’s strategy for storage space is to use both owned and rented warehouses, thus ensuring a regional balance of space, which could provide to the customers a greater level of operational flexibility. Regardless of the approach, the level of investments remains high, because even if it is not the owner of the space, the company invests in shelves, equipment, computer systems, surveillance, access, etc.
An integrated approach
In order to have the best possible coverage at national level, Euroccoper wants to open a cross ‐ docking centre in the Transylvania region and, later, in Moldova, all according to the new development strategy of the company: “One Stop Shop!”. This is because the initial activity of the company, that of customs brokerage has been constantly developed, currently 18 customs offices being open, both inland and at the border (Serbia, Moldova, Ukraine), but also in the capital of Serbia, at Belgrade. The International Grouping Service on the Serbia-Romania route is available in a round trip version and has a weekly recurrence with departure every Wednesday from Belgrade, arrival on Thursday in Timisoara and return on the same day to Belgrade. Regarding this service, the Euroccoper official says that he has a set of skills from several business areas, such as know-how in the area of international grouping lines between different European HUBs, 25 years of experience in the field of customs procedure, together with the connection with Pall ‐ Ex Romania, “the most extensive palletized goods distribution network, where we are the founding members since 2011”. “This accumulation of information materialized by this grouping service makes us believe that we have a say in this niche of small consignments of goods on a non-EU route.” As for Bucharest, the company will connect this line in the near future with its own HUB in Belgrade, which will be a direct line, “which will operate according to the same work processes and for which we will carry out a national promotion campaign”.
The distribution activity is the one that completes the logistics chain, a growing field within Euroccoper. Thus, the distribution is made through its own logistics centres and by means of Pall-Ex. This is also the idea behind the “One stop shop” concept, the company proposing a complete range and an integrated approach, so that customers can benefit from a complete package of logistics services, at an optimized cost. According to Romeo Dumitru, the company is one of the first operators to provide a complete portfolio of services, covering the entire logistics chain, from intermediation to air, sea, road transport, customs forms preparation, handling, storage, value-added services, tax representation, and until the final distribution.
Romeo Dumitru explains that in time there have been requests from customers to provide all these services, including specific maritime shipping projects. “We offer them the whole chain, but in some cases the customers have some business relationships for years and are satisfied with what they have, others buy in DAP type conditions ( – Deliver At Place) and are not interested in the customs part, or they used FOB – Free on Board type transport to containers and Euroccoper is only responsible for the road transport from the port to Bucharest or other areas of the country ”.
In fact, almost all customers of the warehouse in Bucharest bring containerized goods through Constanta, carrying out the customs operations both in Constanta and in Bucharest. Out of their total number, One Stop Shop contracts have an important share, of approximately 40%.
New customers, after 25 years of existence
The organic development coincided this year with the anniversary of 25 years on the Romanian market, on which occasion the company initiated several projects to increase visibility, as well as the quality of services provided so far. One of these projects involved participation in the largest trade fair dedicated to the industrial and logistics sector in Europe, Transport Logistic 2019, which is organized in Munich, Germany. According to the official representative of the company, more and more companies from Poland, the Czech Republic, Germany, France, even from Asia are analysing very carefully the Romanian market. Euroccoper was thus among the companies exhibiting at the fair at the Romanian stand, the participation being enabled by the Romanian-German Chamber of Commerce (AHK Romania). “We try to attract companies that want to invest with us in creating logistics partnerships. The fair was a good opportunity to do this, some of the contacts materialized, which for us is a success, and for this reason we will repeat the performance at the next edition of the fair “, as Romeo Dumitru points out.
2020 will be a challenging year
Regarding the budget allocation for the end of 2019, the logistics director of Euroccoper states that it will register a 10% increase, despite a weaker start of the year. The budget was estimated taking into account all macroeconomic considerations and in Romeo Dumitru’s opinion the economic environment will worsen further next year, at least at the macro level, partly due to the conflict between the two world superpowers, China and the USA, and, on the other hand, a technical recession from Germany has already visible effects. “And when Germany is confronted with a recession, it drags the entire Europe with it. More than half of the goods produced or imported into Europe are traded in Germany, even though the ports of Rotterdam and Antwerp are important entrance gateways and the effects will be felt in a significant manner in the transport field. An important impact in the logistics activity will be the exit of Great Britain from the Euro zone, which will certainly lead to imbalances in terms of maintaining costs at current amounts. Most economic operators are reorganizing their logistics flows as a result of Brexit, and this is a potential increase for customs activity for Euroccoper. Internally, we see difficulties due to the instability of legislative measures, not in line with the requirements of the competitive economic environment. All of the abovementioned facts can be considered challenges, which we have to face and quickly adapt our business strategy.”