Europe in the groupage network

Regular international groupage connections are always launched in response to the market needs, understood as the needs of exporters and importers. This logistics segment has been developing dynamically since May 2004, when Poland and 9 other countries entered the single market and free trade. At the same time, it was a period of intense Western capital investments in the production potential of the countries of Central Europe. The production process has become truly globalised, suppliers are sought around the world, and efficient supply chains are to ensure harmonious deliveries. On the other hand, due to the concentration of production, the manufactured products are supposed to reach several and sometimes several dozen markets. In addition, customers want regular, but more frequent deliveries. As a result, needs emerge for efficient deliveries of components, often in quantities which do not allow for organizing direct delivery, as well as needs for efficient product deliveries to customers scattered throughout Europe and addressing their growing requirements.

Another trigger for the development of groupage connections is the progressive consolidation of distribution warehouses. Whereas in the food segment, due to traditions, local tastes and brands, this process is limited, in the non-food area (consumer electronics, household cleaning products, etc.) there has been a rapid consolidation of warehouses. Many Western corporations have set the goal of reducing the number of distribution warehouses in Europe to three or four locations. This significantly improves the availability of the assortment and limits the total stock, yet it raises challenges in the area of ​​deliveries to customers. The distribution distance often reaches 1000 km and the customer expects next-day delivery, although the order, in logistic terms, consists of several Euro-pallets. Naturally, next-day delivery cannot be done at a reasonable cost, but a well-organized network of groupage connections will allow for a lead time of 2-3 days.

A lot of valuable information is provided by trade statistics. When we ask who the most important trading partner of Poland is, the answer we will get without hesitation is Germany - it is worth adding that this applies to both exports and imports. However, few people realize that the Czech Republic is the second largest customer of Polish exports.

When considering an opening of a regular groupage line, you cannot overlook the internal sources of information the company has. These are marketing and sales departments. Sales staff visit customers on a daily basis daily and they talk about current and future needs resulting from the company strategy. We also get ‘spot’ inquiries, the analysis of which allows us to observe trends and make decisions regarding new connections. Regular meetings between the customers' caretakers and the decision-makers in the supply chain at the European level are also important. Customers share their strategic plans and more and more often consult future logistics solutions with the most important operators. We also participate in the most important conferences, trade fairs and symposia to stay up-to-date.

In the case of Raben Group, apart from macroeconomic data, own market observations and internal data, the motivation to open new groupage lines is the expansion into new markets. When a new country appears on our map and we are convinced of the effectiveness of the local distribution network, we open direct connections with other countries of the Group. All that remains is to agree on the frequency, select the consolidation platforms (gateways), build EDI connections and set targets for the sales department.  

Germany should be mentioned in the first place - It is the largest trading partner for Poland, yet this is not the only reason. The opening of a new gateway of Raben Group in Legnica created new opportunities for competition on this very important market. Currently, each day, 35 linehaul trucks leave the platform in Legnica and they go directly to the Raben Group terminals in Germany, thus ensuring deliveries within two business days from the time the shipment is picked up in Poland. An important element of such a network of connections is the limitation of handling in Germany - nearly 95% of the volume from Poland goes directly to the area of ​​final deliveries of the target consignees, which translates into the quality of service and reduction of potential damage.  In turn, for import shipments, we have 31 direct connections to Legnica. The increase in volumes between Poland and Germany motivates Raben Group to develop daily groupage connections from/to the key location of the Distribution Centre in Gądki near Poznań.  We provide the ability to track shipments and access the archive of delivery confirmations via myRaben.com.

Another direction which from our perspective has been reborn is Italy. This is the result of the Group's expansion into new markets. As a shareholder of the Italian company SITTAM specializing in servicing international groupage shipments, we decided to take a fresh look at this direction. Italy is the sixth export direction in terms of turnover, hence the decision to intensify our presence in this market. From autumn this year, we arrive every day from the Warsaw area and from Gliwice directly to two terminals: Cornaredo (near Milan) in Lombardy and Verona in Veneto. Both terminals ensure further distribution in neighbouring regions (Piedmont, Tuscany, Trentino Alto Adige) and also to those located further south as far Calabria and Sicily. Due to the specificity of the Italian market, consisting in sales on an ex-works or free carrier basis, it is very important to service import orders. SITTAM ensures timely collections and loading of linehauls which transport to Polish importers: interior furnishings, mechanical and electrical devices as well as industrial automation. Apart from Russia and China, Italy is just behind Germany when it comes to the volume of imports to Poland.

The third direction worth mentioning is Romania, which is experiencing economic growth at the level of 7-8 percent per year. Although such a fast growth rate raises concerns of some economists, we can’t afford not to participate in this rapid development through efficient handling of groupage shipments mainly to Romania. We transport directly to three terminals: in Arad, Bucharest and Cluj-Napoca.

As one of the fastest growing European companies in the TFL industry, Raben Group takes full advantage of the market opportunities which have emerged together with the opening of European markets and the free flow of goods.

Road transport, which is responsible for 70% of the Group's turnover, offers a great opportunity, but it also poses challenges Raben reacts to every day by adapting its network of groupage connections in response to the expectations of customers from all over Europe.

Activities which are part of the development of the network of international groupage connections perfectly fit the company vision: “To Become a Leader Everywhere We Are", and since trucks with the Raben logo can be found on every transport route, there is no doubt that Raben Group strives every day to be one ‘axle’ ahead of the competition.

The main focus of the Group is certainly Europe and the possibility to deliver shipments using classic trucks (TIR) ​​as quickly as possible. Recently Raben East, which offers customers transport services outside Europe to the East using traditional road infrastructure, has also been developing dynamically (the countries in the East include Armenia, Azerbaijan, Belarus, Georgia, Iraq, Kazakstan, Kirghizstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Turkey, Ukraine and Uzbekistan). As part of the European road network, Raben Group executes nearly 400 export and 350 import connections offering in most cases the lead time between customers within 24-48h. Naturally, everything depends on the distance although the company strategy is clear here - every country has daily groupage connections with another European country. This is already a market standard, although it is worth adding that Raben was the first groupage carrier which launched daily connections when a large group of Eastern European countries joined the European Union. The contemporary company policy aims to deliver groupage cargo as close to the final consignee as possible so the launch of a simple connection from o single terminal in country A to a single terminal in country B is dynamically disappearing.

Cross-border connections between neighbouring countries are the best example which shows the scale of the changes. It is worth showing this on the example of the Polish company of the Group, which is the most effective at implementing the changes. Trucks with exports to, e.g. the Czech Republic, arrive every day to each branch in the network of Raben Czech. We do not use the classic single distribution point, e.g. to Brno or to Prague. Using enormous investments, the same model is being implemented in the German direction, where the new and independent distribution network of Raben Trans European Germany, operating since January 2018, consolidates 41 terminals.

Such a policy offers a real competitive advantage of shorter lead times, lower damage ratio and lower costs due to the shorter distribution distance. Already at this moment, thanks to the proper location of warehouses and the appropriate groupage network operating at the 97% quality level, goods can be delivered on the second business day from picking them up from the customer in the sending country. The quality referred to above is monitored each day as part of the Service Excellence program, and the margin of error is mainly caused by various types of random events on roads which are not the responsibility of Raben (accidents, roadworks, traffic jams).

Interestingly, when reading this article, we can be sure that during the same time a new groupage connection will be launched or planned within Raben Group.

Author:

Łukasz Lubański, Dyrektor ds. Rozwoju rynku Niemcy - Polska