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EDITORIAL

Lack of people, the toughest test in 2017

The Romanian transport and logistics market experienced an increase in turnover last year, but with a fall in profit. The situation was caused by the acute shortage of the labour force in these industries, which led to significant wage increases, not compensated by the prices obtained from the customers. So, the firms in these areas had to work harder, but for a significantly lower profit than in the past years.

In the case of transport companies, two years ago the gross drivers’ incomes had an impact of 12-16% in the cost/km, but now they reached 26-30%.

Road transport is ranked the 3^rd among the business sectors with the highest turnover in Romania, which last year amounted €8.4 billion, after the retail trade of food and fuel. This figure was reached last year by 30,701 economic agents (1.57% of the total number of the companies registered in the country) with 136,151 employees, or 3.36% of the total Romanian employees. Most transport companies, 163, are located in Transylvania and Maramureº, followed by Muntenia, with 145, and Banat/Criºana with 111. The same ranking is when it comes to people hired in the business of transport – 17,156 employees in Transylvania and Maramureº, 15,335 in Muntenia and 11,638 in Banat and Criºana – and to the turnover got by the transport companies per region: €1.41 billion, €1.34 billion and €1.03 billion, respectively. In Top 30 of the biggest turnovers got in transport sector per region, in Transylvania (plus Maramureº), half of the companies are multinational registered in Romania especially for the low price of the labour. It is interesting that they have huge turnovers, but the profits are not accordingly.

We noticed that the ranking on regions by profit is changed, Muntenia – where are only few foreign capital companies – is first with €59.36 million, followed by Transylvania and Maramureº with €39.87 million and Banat and Criºana with €31.87 million.

When it comes to investments, we have the same situation: the Romanian capital companies in Muntenia have the biggest investments in assets (worthing €807.90 million), followed by Banat and Criºana with €616.63 million (also a region mostly with Romanian investors) and Transylvania and Maramureº with €558.02 million, where most of the assets consist of trucks – the foreign companies doesn’t have too many investments in logistics centres. The transport situation was also reflected automatically in the logistics activity, where the companies worked more, for lower profits. The players in this industry, however, managed to raise prices to some of their customers. They have instead demanded services almost perfect and increased the level of penalties.

In Romania there are 2,953 economic agents in this segment (0.14% of Romanian companies) and they have achieved over €2.9 billion turnover last year, with 52,423 employees earning a profit of €276.4 million (1,39% of the net profit realized in Romania).

Out of the top 500 logistics companies, the highest turnover of €1.2 million was recorded in Banat and Criºana, followed by Muntenia with €706 million and Dobrogea (€444 million). As for the profit, Muntenia is the first with €20 million, followed by Dobrogea with €11.9 million and Transylvania and Maramureº with €10.4 million. Instead, the biggest investments in warehousing capacities were made by firms in Banat and Criºana area, which have assets worthing €1.2 billion, followed by Muntenia, with €331 million, and Dobrogea (€71 million).

Most of the logistics companies are located in Muntenia, 133, followed by Transylvania and Maramureº (112) and Banat and Criºana (101).

2018 also announces to be a tough year in which those who have lost ground in 2017 are trying to re-launch, while others want to develop and strengthen their position on the market.

Mariana BLEORÞ

ANALYSIS

LOGISTICS MARKET

Transport is an important
part of logistics

Last year, transport activity had a significant influence on the financial figures of logistics companies. Some of these companies even went from generous profit in 2016 to losses last year due to the rising fuel prices. And others have seen significant increases in profit due to the fact that they have managed to gain a greater margin of transport through different methods. Financial results in 2017 have led logistics companies to raise prices this year both in renegotiating existing contracts and new ones. Instead, customers wanted to increase the penalties and also to have higher priority.

Logistics companies generally managed last year to keep their results in 2016. Thus, Top figures are driven by Schenker Logistics, Havi Logistics and Transmec and Top Profit, by Schenker Logistics, Tibbett Logistics (currently Yusen Logistics) and Atlas Imobiliare, which ranked third, place occupied in 2016 by Karl Heinz Dietrich.

Last year’s losses were driven by CETA, with €2.2 million, followed by Havi Logistics, with €588,686, and Gopet with €542,593.

Top-ranked list of assets last year shows as in 2016: the first place is occupied by Karl Heinz Dietrich, followed by Schenker Logistics and Gebrüder Weiss.

The same companies leads the Top turnover

As expected, Schenker Logistics is leading this year’s Top logistics companies in Romania both in turnover and profits and regarding the difference between claims and debts. The company ended last year with a turnover of almost €125 million, up 16% over the previous year. Most of this growth comes from the full truck transport division, but also from groups where volumes have increased and activity has been streamlined at group level.

In the last four years, the company has witnessed a steady growth in turnover, with a difference of €34 million from 2014. Schenker is also ranked first in net profit, where it reached about €5.2 million, up 108% from 2016. However, this increase comes after a fall in profit in 2016 as compared to 2015, caused by some sales of company assets that had a negative impact on accounting. In terms of assets the company ranks second in the top after Karl Heinz Dietrich, with assets worth €64 million, down only 2% compared to those held in 2016.

There is currently a process of cleaning assets inherited from the old Romtrans, so all that is unrelated to the company’s core business is sold, even if it benefits. And the difference between claims and debts once again brings the company to the top with €15.8 million, increasing by €2.8 million compared to 2016.

Major customers do not always bring big profits

The second place in logistics companies top business figures is occupied by Havi Logistics, with €108 million, up 43% from 2016. The figure is explained by the takeover of an important chain of restaurants at the end of 2017. Instead, because for some customers the company buys the products from suppliers and resells them to restaurants at the same price, its profit margin is only for the logistics activities performed. Thus, last year, it posted a profit of only €403,021, as assets had an increase of only 2% compared to 2016. Havi Logistics ranked sixth in Top assets, with a total value of almost €18 million. And the company’s debts are €9.7 million more than claims.

Intermodal transport becomes interesting

On the third place in terms of turnover, Transmec recorded €78 million last year, up 15% from 2016. With the €1.8 million profit, rising by 73% versus 2016, it ranks sixth in the top of the logistics companies according to the profit. Transmec owns 600 trailers and 100 mobile boxes for intermodal transport and, together with its partner P&O Ferrymasters has invested in an intermodal terminal in Oradea. Thus, Transmec ranks fourth in Top Assets, with a total value of €26.8 million, up 7% from 2016. Last year, the company managed to achieve a medium load of trains over 96%.

The fourth place in terms of turnover belongs to Gefco Romania, a company that in recent years operated more than 60% of all vehicles produced in Romania. Last year, it achieved a turnover of €68.2 million, up 14% over 2016, the profit was €1.7 million, up 40% compared to the previous year, and assets decreased by 8%, reaching a total value of €16.6 million.

Gebrüder Weiss also continued to grow its turnover last year, reaching €59.5 million, 17% more than in 2016, reaching fifth in the Top Turnover. In terms of last year’s profit, GW is on the 12^th place with €1.5 million, slightly down from the previous year, when figures showed a profit of €1.6 million. The most profitable activities of the company in 2017 were value-added services and international transport. Last year, the company gained new customers from diverse industries such as telecommunications, FMCG, IT & C, construction and automotive, and revenues from contracts with major clients in the portfolio accounted for around 23% of the total. GW owns more than 40,000 sq.m of storage and cross-dock points in the country, and the storage capacity increased last year by more than 10,000 sq.m, space rented in particular to manage commodities in the telecommunications industry. Thus, the company ranks third in total assets, which last year were €29 million, up 16% from 2016.

DSV Solutions achieved last year’s turnover of €54.7 million, up 10% from 2016, retaining its sixth place in Top 2016 turnover. The growth came from new projects existing customers, but also from new customers that the company has contracted from retail, fashion and food. An increase of 6% was also recorded in profit, reaching €1.8 million, which ranks fifth in Top Profit, close to DHL Logistics. And the company’s assets grew by 17%, to almost €17 million.

Fuel price has affected the companies’ profits

For Quehenberger, last year was a consolidation year, with a turnover of €54.3 million, up 17% from 2016. Instead it recorded a loss of €38,000 after being fifth in Top Profit in 2016, with 2016 €1.7 million. The fall in profit came from the fact that the entire fleet of the company was on biodiesel, according to which the transport contracts have been established. Last year, however, the biodiesel price was close to the price of conventional fuel, and this year the company’s officials estimate that they will have the same problem, and the return is likely to only come next year. Quehenberger saw an increase in total assets of 37% compared to 2016, reaching €16 million.

Tibbett Logistics grew strongly before being bought

Of the top 20 logistics companies according to turnover, Tibbett Logistics, the 10^th largest in the market, registered the biggest grow in turnover. The company has reached nearly €42 million in 2017, 60% more than in 2016. It is worth mentioning that at the end of the year the company was bought by the Japanese Yusen Logistics.

In terms of profits, Tibbett ranked second in Top after Schenker Logistics, with almost three million euros, 33% higher than in 2016. Instead, the company’s assets grew by only 5%, reaching €12.4 million.

On the third place in Top Profit is Atlas Imobiliare express transport company, with €2.8 million, up 48% from 2016. It managed to achieve a turnover of €23.5 million, up 34% over the previous year. 90% of the company’s customers are active in automotive. Atlas had last year a fleet of 150 vans, but it subcontracted about 410 vehicles of 3.5 tons. In 2017, the company’s assets increased by 56% compared to 2016, reaching €2.6 million.

Waberer`s Romania has considerably increased its profits

The biggest increase in profits last year was recorded by Waberer’s Romania Expedition House, which reached €1.6 million, from about €68,000 in 2016, as the turnover declined by 25%, to €6.6 million. This increase in profit is explained by a better efficiency of the transports, so for the trucks that the company contracts for a few months there are no displacements bigger than 100 km and the waiting time between the transports is very small. In addition, although the company has a fixed period to which it pays its subcontractors, there are also faster payment options at a lower price. And the company’s assets increased by 40% to €5.6 million, while the difference between claims and debt amounted to -325,308 euros, compared to €135,009 euros, as recorded in 2016.

In terms of assets, Karl Heinz Dietrich is the first with €80.6 million, up 7% year-on-year. The logistics company has nearly 190,000 sq.m of storage space in the country. Its turnover was €22 million, 14% higher than in 2016. Karl Heinz Dietrich also recorded the biggest drop in profits among the top 20 companies in Top Profit, of 27%, to €1.6 million.

Forwarders, under the siege of head hunting companies

In the 12^th place in the ranking of the turnover is Romfracht, with a turnover in 2017 of €30,696,146, slightly down 1%, as opposed to 2016.

In addition to the forwarding activity, the company also has a metal and polypropylene plant for concrete reinforcement and a department selling enzyme cleaning products imported from Belgium.

The forwarders accounts for about 90% of the turnover, which has been growing steadily in recent years, but declined slightly in 2017 because of the lack of workforce needed to expand its business. ”Like all Romanian companies, we also face a lack of staff, which influences us, but not significantly. I estimate that in 2018 we will achieve a turnover of €29.5 million. It is a real hunting expedition staff, head hunting companies are working hard to offer our employees, trained by us – as in Romfracht performance is a basic criterion, so we invest in people and help them become performing. Wage increases in the budget sector have also had a negative impact on all private companies in Romania, given that the state is the largest and most inefficient employer“, explains President Romfracht, Vladimir Mitroi.

With 21 years of experience on the market and about 20,000 shipments made in 2017, the company aims to continue its logistics development by acquiring 31,000 sq.m of land where it will build 15,000 sq.m of warehouse space.

ANALYSIS

COURIER MARKET

Decrease of profit for Romanian courier market

The business has grown for the main courier companies in Romania, with a local market estimated to reach half a billion euros at the end of the year, after a total value of €430 million in 2017. As in the previous years, the main booming continues to be e-commerce, more precisely the sales generated by this growing segment. Compared to 2016, the main players’ rankings show very few changes in positions, nothing notable though, with the top still being led by the state owned company Poºta Românã, which recorded a turnover of over €247 million, a slight increase, followed by FAN Courier, with almost €129 million.

If last year’s total online sales amounted to €2.8 billion, for 2018 retailers estimate an increase of 40%, to €3.9 billion, with most of the sales generated by electronics and appliances, along with IT segment. This is the reason why the business of the top 10 courier companies have grown by about 8% over the previous year, to a cumulative value of almost €692.3 million, which represents 90% of the total courier market.

Turnover continues to grow for main players

With a barely noticeable growth compared to 2016, the business of Poºta Românã Company is still the largest, with just over €247 million, while the number of employees fell by 837. On the second place in the TOP published by Tranzit is the largest privately owned company in the market, FAN Courier Express, which has a business surplus of 13%, to €128.5 million, and an average number of 2,473 employees, also increasing with 283 people. “The 13 percent growth was in line with our estimates based on two growth scenarios – one optimistic and one cautious. Regarding the rhythm in which it progresses, we notice that for several years the Romanian courier market has grown on average by up to 15%, ±1-2%. It is a healthy rhythm that shows both a healthy market competition and an existing potential. In our opinion, the market will maintain its upward trend, the main engine being e-commerce as well“, said Roxana Magopeþ, Marketing Manager FAN Courier. Just like in 2016, the podium is closed by Urgent Cargus, with nearly €82 million, up 19%. Nor is there any surprise in the fourth place, held, as in 2016, by DHL International Romania, with a turnover of €56 million, up by €1.67 million. TNT Romania had a turnover of €55.4 million, registering an increase, while UPS Romania recorded a slight decrease, about €197.000, for a total of €39.5 million. DPD Romania maintains the seventh position, with business of €26.8 million, compared to €27.08 million in 2016. “Last year we focused on changing the IT platform and this strategic step did not happen when we wanted, in Q1, but only on November 3^rd, when everyone was already prepared for Black Friday. It was only in December that things started to work better and today they are all set up and we are preparing to get the benefits of this migration“, as Lucian Aldescu, DPD CEO, explained. For this year, the company expects a 20% increase (11 million delivered packages), “influenced by the quality of DPD Romania’s services, the competitive and correct price we apply, along with the innovation we bring through our new IT system in Arad and Craiova“.

The top is ended by GLS General Logistics Systems Romania from Sibiu, which ranks eighth with a turnover of €24.5 million, up 35%, followed by Nemo Expres Logistic, which increased spectacularly last year, up to €21.9 million, from €5.3 million two years ago. The last place is held by DSC Expres Logistic, also a position higher, with a turnover of €10.5 million, up 24%.

Declining profit, rising losses

The most profitable courier company remains FAN Courier, with €14.7 million, a decrease of 26% compared to 2016. The depreciation of the national currency RON against EURO, which has increased the costs in relation to the suppliers, whose prices are in euros, wage growth and the unpredictable economic, fiscal and legislative environment are the main reasons for declining company profitability. “The cost of vehicle maintenance has increased, investments must be amortized and our rents have increased. These are the same reasons for which we estimate also a lower profitability in 2018“, Roxana Magopeþ said. At the same time, at the end of 2017, according to data analysed by Tranzit publishers, the Romanian company recorded a minus of about €5.5 million, represented by the difference between claims and debts. “The difference comes from the fact that the amounts (cash on delivery) received on behalf of clients through FAN Courier collector account were due on the first business day of the year (January 3^rd), as December 30 and 31 were weekend days, and therefore non-working for banks“, also said the company’s Marketing Manager.

The second place is occupied by GLS General Logistics Systems Romania, with a profit of almost €4.6 million, up 43%, but the company also records a minus of about 562,000 euros in the “Claims-Debts“ heading. Despite the problems it faces, Poºta Românã manages to remain profitable for the second consecutive year, up by 31%, to €3 million. Which is not the case about the difference between claims and debts, of over €113 million, down from over €118 million. A spectacular growth of 257% in terms of profitability records UPS Romania. Although the company reports on global basis, not at country/level, the financial results, in 2017, locally, the export volumes grew more than 30% over the previous year, and in the first half of 2018 the company also registered an increase of over 15% . The increase, said UPS, was generated by improvements to the Romanian network. The company has over 150 employees and a fleet of about 75 vehicles, both own and subcontractors, while customers come from many sectors, but mainly from automotive, electronics, manufacturing and textiles. Related to the profitability of the 30 companies, cumulative profit is down to just over €28 million from around €35.6 million in 2016.

In terms of losses, only seven players reported minuses for a total of about €8.5 million. The first place is occupied by the Delivery Solutions Company from Bucharest, with a minus of €3.1 million reported at the end of last year. It is followed by TNT Romania, with €2.4 million, while the difference between claims and debts is also negative, about €3.4 million. Just like in 2016, the top is complemented by the X Curier Extrem, a company with a minus of €1.2 million, nearly double compared to 2016, when the losses amounted to about €600,000. At the same time, the difference between claims and debts continues to be negative, rising to about €3.5 million, compared to €800,000 in 2016. In the sixth place in terms of losses, slightly less than €400,000 in minus, DPD Romania, through the voice of his CEO Lucian Aldescu, pointed out the expected negative profit generated by last year’s €1.5 million investment in expanding logistics capacity (the new hubs in Cluj, Braºov and Bacãu) and software (IT Sky Logistic solution and the new MyDPD online app).

Fleets are increasing

With a network of 5,600 territorial units, Poºta Românã has total assets of about €200 million, 3% less than two years ago, when they were worth €206 million. The following positions are occupied in order by FAN Courier and Urgent Cargus, with €89.1 million and respectively €50.5 million. Compared to current assets, meaning fleets, the top is reversed a bit, the first place being held by FAN Courier, with €55.3 million, up by almost €2.3 million due to investments, followed by Poºta Românã, with €43.8 million, slightly increasing, and Urgent Cargus, with €24.6 million, a spectacular leap from €15.7 million. Last places are occupied by Fastius Curier and Sprint Curier Expres, with just over €240,000 and €223,000, respectively. The largest increase in assets compared to 2016 is recorded by FAN Courier Express, with an additional €13.59 million, followed by Craiss Logistik with €6.35 million and Urgent Cargus with €4.28 million. The total assets of the 30 companies analysed by Tranzit publishers exceeded €467 million, up by about €27 million, figure of which the top 10 companies account 92%.

ANALYSIS

TRANSPORT MARKET

Another year
with declining profits

The top 500 transport companies in Romania, according to turnover, had about €4.110 billion in 2017, significantly higher than in 2016 (about €3.746 billion). More than a quarter of this total turnover is made by the Top 20 companies, about €1,191,820,696, up around 10% compared to €992,133,693 made by the same companies in 2016 and compared to €1,057,223,469 achieved by the 20 companies in this top in 2016. On the other hand, as we also noticed last year, the profits of the most profitable 20 Romanian transport companies fell in 2017 to €50,187,748, compared to €51,680,721 in 2016 and to €57,438,007, as the first 20 companies in the 2016 rankings achieved.

29% of the total turnover of the top 500 operators comes from the top 20, a bigger percentage than the 25% of the first 20 companies in 2016. If we add the next 30 companies, it reaches 44.44% of the total, similar to 2016. The first 100 companies achieved 60.13% of the turnover of the 500, compared to 59% the previous year, the firms on the 101-200 sites had 16.77% of the figure of the 500, compared to 17% in 2016, those on 201-300, 10.39% (11% in 2017), those on 301-400, 7.38% (8%), and those on 401-500, 5.33% (about 4% in 2016).

Thus, there were no significant percentage differences compared to 2016 by company size category, with increases for the top 100 operators and for the operators on the 401-500 places, and small decreases for the rest of the companies.

Increases in turnover, despite many drops in fleets

Aquila Part Prod Com continues to be leader, though not as clear as in the past years, with €198,844,241, compared to €177,716,356 in 2016, even if fleet dropped steadily in the last time, from 497 vehicles in 2016 to 442 in April 2017 and 430 in April 2018. “Lately we have been doing our turnover with difficulties. We have a big problem with the labor, with the number of employees dropping lately to about 2,800. We could hire strangers in the warehouse, but the transport is more complicated because the legislation is more protectionist”, states Cristian Helwig, Aquila transport director.

The ranking continues with Carrion Expediþii (€180,582,878/ €144,031,274), whose fleet increased from 1,094 trucks in 2016 to 1,368 trucks in April 2017 (but after the first months of 2018 it decreased to 1,332, according to the most recent data received from ARR).

The third company in Top is Vos Logistics Cargo, a new entry, with €80,606,728. The company was founded in 2016 in order to coordinate the entire international transport operations of Vos Group, previously coordinated by the company in The Netherlands. Vos Logistics Cargo coordinate around 600 own trucks registered in Poland, Romania and Netherlands and around 250 subcontractors.

The company on the fourth place, Duvenbeck, grew a bit compared to 2016, from €67,616,410 to €73,552,011, with a similar fleet in 2016 and 2017, 255/253 units, and up to 262 in April 2018. XPO Transport Solutions recorded a decrease in turnover from €63,982,556 to €60,526,992, with 676 trucks in 2016, 570 in 2017 and 526 in the first months of 2018.

International Alexander is on the sixth place, with a turnover of €55,702,200 and a fleet of 292 trucks in April 2017, compared to €46,144,986 and 272 trucks in 2016. 80% of this turnover comes from the automotive industry and, taking into account the contribution of each particular service, the transport with its own fleet realises 74% of the total turnover. The company has also other business lines: forwarding, added value services, air and see transport. Internaþional Alexander has 831 clients and the biggest three of them contribute to 26% in the total turnover. The increase in turnover and also in profitability is due to the activity optimisation and to the new services, as Loredana Dan, Europe business development manager Internaþional Alexander, explains. In 2017 and 2018 the company became a holding of 10 independent firms, in order to control, coordinate and develop each segment as efficient as it can.

Arcese overpasses this time Total NSA, with a turnover of €48,344,163 in 2017, compared to €42,961,901 in 2016 and with almost the same number of trucks, about 200. Skiptrans entered in 2017 in the Top 20 directly on the eighth place, with €44,926,830, compared to €33,075,194 in 2016.

The ranking continues with Total NSA (which records a decrease in turnover from €45,747,641 to €42,694,834, although the fleet has increased from 2016, from 232 to 261 trucks), International Lazar Company (on the 11^th place in 2016, rising from €36,946,613 to €41,733,366 – of which 40% comes from domestic transport, which, as Ion Lazar explains, ”I could not avoid because we had old vehicles, better for the national transport“) – and Ravitex, slightly down compared to 2016, from €40,480,839 to €40,087,925.

Gartner Eurotrans Romania is on the 12^th place, with €39,898,409.43, up 37% compared to €29,144,258.57 in 2016 (the highest percentage increase in Top 20), followed by Dianthus Company, with €39,685,621.93 (15% more than in 2016), surpassing this time Dolo Trans and climbing from the 16^th position in 2016. Dianthus, a firm that celebrated 25 years of activity in August, had a higher turnover in 2017 than in 2016 due not to higher tariffs, but to the fleet expansion every year.

As for the first half of 2018, the turnover has increased again due to the expansion of the fleet, but the profit, although good, is not at the level in 2017, as Dan Niculescu, the transport manager of the company, estimates. ”By the end of the year we hope to reach a 10% margin, but I do not know if we are going to succeed, with the current costs. In terms of efficiency, I think we have done everything we could.“ The entire transport market is facing the same problems and because of the increasing costs and low prices it is expected that some firms disappear.

About 40 trucks of Dianthus work internally, where rates are better than in the past, as it is normal, given the truck crisis in recent years, but the problem here is related to economic areas. For domestic transport the best prices are obtained for loading from the western and northern parts of the country, Banat and Ardeal, from where there is a lot of freight to be transported. Unfortunately, the volume to be transported to these areas is significantly lower, resulting in prices below the transport costs.

The 14^th company is Dolo Trans Olimp, with €38,668,521.05, 10% more than in 2016, with a fleet of 297 trucks in 2017, compared to 173 in 2016, when it was on 15^th place in this top, before Dianthus. The increase in turnover is due to both the opening of a storage platform and the expansion of volumes from existing customers. Car transport continues to have the largest contribution to turnover, and it joins the car service used for both its own fleet and third parties, in which the company invested in 2018 to obtain Mercedes-Benz authorization.

Vos Logistics Romania comes down from the 10^th to the 15^th, with a turnover of €37,799,551.97 in 2017, almost the same as in 2016, when the fleet was 159, compared to 178 in 2016. The company was found in 2012 and its trucks were about to be transferred, till the end of 2018, to Vos Logistics Cargo, after a 2.5 years transition process.

Dunca Expediþii lost a few position in Top 20, from the 13^th to the 16^th, with €35,563,156.14, roughly equal to 2016, with 418 assemblies last year, compared to 435 in 2016.

Lagermax had a 15% bigger turnover compared to 2016, to €34,459,315.13, and it occupies the 17^th place, and H.Essers climbs from the 20^th in 2016 to the 18^th in 2017, with €34.106.596,93 and 309 trucks, compared to 318 in 2016.

Dumagas keeps its 19^th place, with a 9% increase, to €33,028,493.64, with 166 trucks in 2017 and 203 in 2016. Baladei Thirdway Transport is the 20^th (17^th in 2016), down 1%, to €31,343,003.79, with a fleet declining from 217 to 193 trucks.

Of the top 20 transport companies according to turnover, 15 had increases of this indicator. In comparison with 2016, Hoedlmayr-Lazãr Romania (the 12^th in 2016 and the 33^rd now, with a drop in turnover of almost €12 million and a constant fleet in 2016 and 2017, 98 and 96 trucks respectively) and Hartl Carrier (the 14^th in 2016 and the 26^th in 2017, with a turnover of more than €8.56 million smaller and a fleet that also dropped from 248 trucks in 2016 to 225 in 2017 and 177 in April 2018) left the Top 20.

Romfracht, 18^th in 2016, was not considered this year in the Transport category, but in Logistics, because the company has not its own fleet, but forwarding and production activities.

There are also three new entries in Top 20: Vos Logistics Cargo, Skiptrans and Gartner Eurotrans.

Over €50 million profit in 2017 for the top 20 companies

In 2017, 450 transport operators in Top 500 registered profit: 32 transporters had a profit of over one million euros, 47 had between €500,000 and one million, 191 had €100,000-485,664, 60 had €50,000-99,715, 82 had a profit of over €10,000 euros and the rest was under that value.

The profit of the most profitable 20 Romanian transport companies in 2017 was €50,187,748, down from €57,438,007, as the first 20 companies in this ranking had in 2016, and down from €51,680,721, as the first 20 companies in 2017 had in 2016

Transpeco Logistics & Distribution continues to lead in the top with a profit of €7,166,241, 1% lower than in 2016 (€7,217,758), followed by Dianthus (third in 2016) with €4,334,268 compared to €3,918,125 in 2016. Dianthus had a 12.58% higher profit than in 2016, but not as spectacular as in 2015 (€6,133,481) when 70 trucks left the leasing. A new similar evolution might happen in 2019, when the leasing will end for about 60 vehicles. The profit rate for the company in Piteºti was therefore 11% in 2017, compared to 11.39% in 2016, but in 2018 the figures are expected to be affected by the increase in operating costs. Diesel price increased and customers only cover the additional cost after 4-5 months, road tolls were also more expensive, but customers did not raise rates unless they rose by 5% – some countries, for example Italy, have annual increases of 1-2%. ”We had to increase our wages and allowances by more than 15% in the last year and by more than 20% compared to January 2017, thus solving the problem of labour shortages”, Dan Niculescu explains. But at least ”currently Dianthus has drivers for all trucks, the only problem being that we have no reserves for operational needs and holidays”. The obligation to accommodate drivers at the hotel is also a growing cost, because now the drivers stay in hotels not only in France, but also in Italy, Spain and Germany. And these costs are taken into account only when signing new contracts.

International Alexander is the third (the 13^th in 2016), with €3,127,258, 39% more than in the previous year.

Fartud remains fourth with €3,057,236, 13% less than in 2016, followed by Skiptrans, with €2,663,428, compared to €3,171,135 in 2016, when it was on the seventh place, and Euro Fleet Transports, rising from the 18^th place on the sixth place, with €2,552,219, compared to €1,752,679 in 2016. The second in 2016, Carrion comes down to seventh place, with €2,491,227, compared to €4,467,189 euros in 2016, Logistic E Van Wijk is in eighth place (nine in 2016) with €2,461,813, compared to €2,778,471 in 2016, Trans Euro Express 94 rises from the 12^th to the ninth, although the profit is 3% lower (from €2,396,614 to €2,333,857) and Luscan Com is a new presence in Top 20, with a €2,247,250 profit in 2017, compared to €757,334 in 2016 (a 197% increase, the largest of the top ranked companies).

Aquila Part Prod Com comes from the seventh place in 2016 on the 11^th in 2017, with a 27% lower profit of €2,223,537s. The company’s transport manager explains this by the fact that increasing freight volumes have led to a greater need for transport and, in need of drivers, “we have to pay better for them to return, although in the negotiations with customers there is a huge pressure on tariffs”. In this context, which characterizes the entire Romanian transport industry, many companies have losses, but Aquila, having also trade activity, can cover some of the additional costs. “If two years ago the driver’s gross income had an impact of 12-16% of the cost/km, now they have reached 26-30%. We are ready to offer to drivers European wages to convince them to return to Romania, but the market will not be ready.”

Aquila transport director also points out that if the rates/km are currently €0.7-0.8 euros, carriers probably will ask for €1-1.20.

Vio Transgrup rises from the 18^th to the 12^th place, with a 19% increase to €2,083,521, Royal Trans increases by 145% compared to 2016, to €2,037,586, and enters in Top 20 on the 13^th place, and Duvenbeck, with a 41% decrease, and with a profit of €2,028,011 in 2017, goes down from fifth place to the 14^th. Romstyl drops 45% to €1,845,705, down from the sixth to the 15^th, Microfruits increases by 44% to €1,635,685 and enter Top 20 on the 16^th place, Rozoti increases by 43% to €1,552,745 and enter Top 20 on the 17^th place, Binar Speed Exclusive drops by 3% to €1,480,119 and goes down from the 19^th place to the 18^th, Port Trans drops 25 percent to €1,459,605, down from the 13^th place to the 19^th, and Maracana increases by 6%, to €1,398,425, and gets the last position in Top 20.

So, nine Top 20 companies registered profit increases compared to 2016, between 6% (Maracana) and 197% (Luscan Com), and Royal Trans also had a much better result than in the previous year. Out of the 11 firms that dropped in value from 2016, Romstyl Impex had the highest percentage decline (-45%) and the smallest drop, 1%, was Transpeco’s.

Some of the companies in Top profit in 2016 are not in this top in 2017: International Lazãr Company, Someºul Cald Producþie (which was not taken into account this year because it does not have its own fleet), Atlas Imobiliare (moved to Logistics Top), Vectra International and Seroni Trans. And the companies that were in 2017 in Top 20, but not in 2016, are Luscan Com, Royal Trans, Microfruits, Rozoti Prodcom and Maracana.

The lower profit earned by Lazãr Company in 2017 – €448,545, compared to €2,664,104 in 2016 – is caused by the fact that the transport company is shareholder in several companies, from which it had no dividends in 2017, but especially by the lower margins for automotive transport, given the significant rise in costs. On the other hand, the profit from logistics, from the hiring of the halls the company owns, was better.

Eight carriers with big losses in 2016 are also in this top in 2017

54 transport companies recorded losses in 2017 and the total value is €25,592,192.

Of the 20 transport companies that had the biggest losses in 2017, XPO Transport Solutions, Klacska (the first two places in that order in 2016 and in 2017), B.H.L. Logistic, Frigoexpres, Rodbun Cargo, Carpathian Concrete Pumps, ATP Transit and Henrik Hansen are in this ranking in 2016 too. XPO had a slightly lower loss in 2017 than in 2016 (€2,944,888 versus €3,456,791) and Klacska rose from a loss of €2,276,041 to €2,877,577, lowering the gap with the first ranked. Frigoexpres (sixth in 2017 in the loss classification), Rodbun Cargo (seventh place in 2017), Carpat Beton (ninth place) and Transcar (14^th place) had lower losses than last year. B.H.L. Logistics (third place in 2017), ATP Transit (10^th place), Henrik Hansen (11^th place), Dissegna Logistics Romania (16^th place), Auto Mili (18^th place) and Trans Jai (20^th place) had bigger losses than in 2016.

Among the companies that made a profit in 2016, but are now in the Top 20 losses are Practicom, Trameco, Nistor Trans Company, Interliner Transport, Gartner Eurotrans, Euro Trans Mol, Alblas Transport and Allfresh.

And among the leaders in 2016 in terms of losses that have improved their performance and topped out in 2017 are Tipes Logistica (third place in 2016, with over two million euros, and 28^th place in 2017, with -€205,880), Felbermayr (-1,139,121 euros in 2016 and + 213,030 euros in 2017) and Drija Trans (from -593,128 euros in 2016 to + 402,249 euros in 2017).

Assets slightly higher than in 2016 for the companies in top

The top 20 transport companies regarding the assets held in 2017 have a total of €688,257,392, more than €648,753,241 belonging to the same companies in 2016 and more than €663,293,095 belonging to the top 20 companies in this ranking in 2016.

Spectacular changes did not come from this point of view. Carrion continues to rank first with €89,699,319, despite a 4% drop compared to the previous year, followed by Aquila Part Prod Com, which increases 6% to €81,381,004. Then there is a reversal of places between XPO Transport Solutions (the third firm in 2016, with a fall of 18% – the largest of the top 20 companies in the top – to €51,853,895) and International Lazãr Company (the third in 2017, almost equal to 2016 – €60,294,418). The next three places are occupied by the same companies in 2016 and in 2017 and in the same order, starting with Dolo Trans Olimp (€43,582,270, 16% more than in 2016). The company from Piteºti invested last year in a land where a 50.0000 m² storage platform was built, close to Dacia plant, and therefore the 2017 profit of €838,237 (41^st place in this ranking) compared to €776,229 in 2016 could have been much higher. On this platform the company will storage Dacia, Peugeot, Citroën and Renault cars, which will then be distributed in the country – an existing activity in the company’s offer, but on a smaller scale. Dolo Trans invested in 2017 in a work place in Arad too, completed in 2018, with a storage platform and office building, which “being close to the border, helps us a lot because the trucks can stop there until Piteºti, can pause and refuel.” In 2017 Dolo also bought 40 trucks (30 with tarpaulins and 10 car conveyors), currently having 309 licensed trucks and 423 employees. In September 2018 they were supposed to add 40 assemblies, and by the end of the year 20 more.

Following is International Alexander  (€40,216,796, 11% more than in 2016) and Trans Bitum (€29,878,135, up 5% compared to 2016). Total NSA rises from ninth to eighth, with €28,703,256, up 19% from 2016, reversing seats with TIR Express, which had approximately the same value in 2016 and 2017, €28,271,790. The tenth company in the top and the 13^th in 2016, Trans Sese, had in 2017 assets of €25,662,801, 33% higher than in the previous year (the highest increase among Top 10 companies).

The second half of the ranking starts with Transport Arcese (17^th place in 2016), with €25,223,371, up 33% compared to 2016, and continues with Romstyl Impex (which descends from the 10^th place a year ago, because of a smaller increase than other top companies, only 2%), with €23,928,983, Transpeco (11^th place in 2016; the company increased its assets by 11% to €22,182,609) and Dianthus (the 12^th place in 2016, with an increase of 12% and an asset value of €21,797,625). This company from Argeº goes on the principle of keeping cars up to six years, so that the average of the car fleet is less than three years. In 2018, Dianthus bought 75 Scania with Krone semi-trailers and sold 15-20 vehicles, “but we still want to sell if it is possible to have an expansion of at least 25 units”, declares Dan Niculescu.

In the last five places there were no spectacular changes: Lagermax dropped one place compared to 2016, with €21,624,092, 13% higher than last year, followed immediately by Duvenbeck, with €20,301,588, 7% more than in 2016. Euro Fleet Transports rises by 4% on assets and goes from the 20^th to the 17^th, with €19,196,624, and European Logistics increases by 72% compared to 2016, to €19,122,376, and it is a new presence in Top 20. Another new entry is Vos Logistics Cargo, on the 19^th place, with €18,464,959.86, much more than the value in 2016, its first year in Romania: €1,912,718.48. Dumagas is in the 20^th place, with €17,761,548 and a 5% decrease compared to 2016.

Only three companies in Top 20 dropped in 2017 compared to 2016 (Carrion, XPO and Dumagas Transport), and among others, the most significant increases belonged to Vos Logistics Cargo, European Logistics, Arcese and Trans Sese.

The difference between claims and debts is a bit lower for the companies in Top

109 companies registered positive differences between claims and debts in 2017, of which 18 had an over one million euros difference, 23 had between €500,000 and €1,000,000 euros and another 50 had over €100,000.

The top 20 companies in the ranking of the difference between claims and debts have together €39,972,007, compared to €32,939,259 in 2016 and to €41,606,016, as the top 20 companies in the ranking in 2016 had.

The largest sums to be recovered still belong to Duvenbeck (€8,105,697, 9% more than in 2016) and Carpat Cement (€4,685,129 euro, 6% more than in 2016). Vectra Logistic climbs from the 12^th place on the third with €2,510,166, 91% more than in 2016, Felbermayr is coming from the eighth place on the fourth with €2,445,555 (+20%) and Kenwroth Transport climbs from the 10^th place on the fifth with €2,171,481 (+44%).

Van Mieghem Transport recorded the first drop of 6% in 2017, with €1,985,422, and occupies the same place as in 2016: the sixth place. Vio Transgrup climbs from the 13^th place on the seventh place, with €1,753,070 (+56%) and Hartl Carrier, with a second decrease of 35% compared to 2016, fell from fourth place to eighth, having €1,713,317. Vos Logistic is the first company which was not in this top in 2016 and in 2017 it entered directly on ninth place with €1,611,786 (+128%) and Expres Euroscan is also a new presence compared to 2016, with €1,392,222 (+89%), as well as Trans Bitum, with €1,388,498 (+375%).

Wiedmann & Winz Internationale Spedition rises from the 17^th place in 2016 on the 12^th, with €1,328,432 (+37%), Adomin Speed, on the 13^th place, is another new entry in 2017, with €1,266,729 (+54%) and KST Vervoer comes from the 15^th place on the 14^th, with €1,195,355 (+13%).

The ranking ends with a group of companies that in 2016 were not in top: Cesped Romania, on the 15^th place, with €1,177,107 (+287%), Skiptrans, with €1,168,498 euros (-48%), Lubbers, with €1.088.197 (+26%), Anasped, with €1.037.455 (+42%), Transconstruct Snagov, with €991,830 (-2%) and Hagero, with €956,059 (+58%).

The highest increases from 2016 to 2017 among the first 20 firms belong to Trans Bitum (+375%), Cesped Romania (+287%) and Vos Logistics Romania (+128%), while Skiptrans (-8%), Van Mieghem Transport (-6%) and Transconstruct Snagov (-2%) decreased.

REAL ESTATE

Dynamic industrial market, driven by consumption

The industrial market was characterized in 2018 by effervescence. Encouraged by record demand from previous years, investors have announced during the year both new developments in existing parks and investments in new locations. There are also developers who are now trying to penetrate the market and can produce surprises anytime for attracting anchor customers for new industrial projects. Most transactions covered logistics spaces, as a continuation of the trend generated in 2017 by an accelerated increase in consumption. Interested fact, there has been a growing demand for production premises as well, after some stagnation in this segment over the past year. New production projects have been announced by companies already present in the market as well as by new industrial players. The vacancy rate in 2018 remained below 5%, with an average rent of 3.75-4 euro/sq.m/month.

Most requirements for storage facilities in the first three quarters of 2018 came from the retail, online sales and FMCG storage segments, as consumption remained at a high level. The total of new transactions (without renegotiations) concluded between January and September 2018 amounted to approximately 260,000 sq.m across the country. “More than 60% of the lettings have been recorded in Bucharest, where the dynamics of demand and supply continued the positive trend. As a particularity, we have seen developing in the past 2-3 years a new logistics pole along North-West ringroad – from Dragomireºti up to A3 – with over 300,000 sq.m built or inn pipeline”, says Rodica Târcavu, Partner, Industrial Agency CWEchinox.

Investors focus on existing projects, with the largest volumes being recorded in Bucharest, Timiºoara or Cluj. However, the market is still not saturated. “For example, although Timiºoara faces a certain limitation of labor force, there are still companies that focus exclusively on locations here because of the good infrastructure connections, the availability of utilities and modern industrial spaces”, explains Costin Bãnicã, Head of Industrial JLL Romania. Although speculative developments have become more prevalent in 2018, investors are cautious, often developing speculative additional surfaces for
pre-lease agreements.

No industrial park was sold in 2018, although two of the major parks in Bucharest are on sale. “An end-of-year transaction could still be finalized. We also estimate the availability of a new portfolio in the beginning of 2019”, says Daniel Cautiº, Partner Dunwell Romania.

Main transactions in 2018

Among the largest transactions in 2018 there are 60.000 sq.m rented by CEVA Logistic in WDP Oarja warehouse, followed by 56,000 sq.m contracted by Metro in the warehouse to be built by WDP at ªtefãneºti and 22,000 sq.m of LPP in the same location. Separately, NOD expands by 14,000 sq.m in the CTP depot at km 23 on Bucharest-Piteºti highway. In the rest of the country, out of the approximately 100,000 sq.m traded in total, one should notice the expansion of Ursus’ storage space in Buzãu, with 20,000 sq.m of rent in a WDP center to be built next year, as well as the industrial premises contracted by Frankie and Fauresia in CTP locations in Turda and Piteºti respectively. Pepsico has leased 15,000 sq.m in Bucharest (Popeºti-Leordeni area) from Helios Phoenix (logistics, built-to-suit pre-contract) and 10,000 sq.m at km 13 on A1 highway from CTParks (logistics, existent space). Also, the German developer VGP acquired a 23 ha land in Braºov to open a new industrial park.

Rents remained at similar level to 2017

Rents have been maintained at a comparable level to 2017 (at €3.75-4.00 / sq.m). However, the beneficiaries that negotiated over 5 years of contractual periods and logistics / industrial spaces on large areas (over 10,000 sq.m) have obtained a decrease in tariffs. At the same time, the requirements regarding leased premises are more elaborate, with customers paying attention to energy consumption, quality of building etc., but also to accessibility. In fact, more and more beneficiaries offer free transport for employees if the location is outside the city. This is one of the reasons why the north-western part of Bucharest has become attractive lately, being more airy and competitive on the labor market compared to the ultra-crowded and hard-to-reach Western part of the city. In the context of increasing the standard in industrial construction, most of the new developments respect a useful height of nearly 12 m, compared to the 10.5 m standard in the past years. The market is dominated by environmental logistic spaces, with flexibility in respect to the mezzanine office space in terms of surface area.

However, the current economic conditions, not as good as in 2017, determined some tenants to look for cheap solutions, points out Gabriel Sfetcu, managing partner GS Capital. “The green projects are chosen only by those willing to pay for them or interested in keeping certain standards. Otherwise, it is built cheap and rented cheap.”

Developers are trying to keep the service charge as low as possible and get tax deductions from ownership by getting the title of industrial park. A developer also plans to build residential space for temporary workers or for workers who come from a long distance. This helps the problem of lack of workforce in the area, explains Daniel Cautiº.

Expectations for 2019

The stock of logistics and industrial premises all over the country will be approaching 4 million sq.m by the end of the year, after 500,000 sq.m were delivered in 2018 and 460,000 sq.m in 2017. The biggest developers are CTP, WDP, P3 Logistic Parks and Logicor.

Approximately half of the total space is in Bucharest, while the first places in terms of stocks are Timiºoara, Ploieºti, Cluj, Piteºti, Braºov, Oradea or Sibiu. “A lot was built in 2018, but partly because of the transactions concluded in the previous year. The biggest projects were based on dedicated requests, but also the market has developed based on speculative constructions, which served the storage needs of logistics, retail and distribution companies”, says Rodica Târcavu.

For 2019 deliveries of industrial premises around Bucharest are expected in Chitila – Rudeni and ªtefãneºtii de Jos areas. In the rest of the country projects continue to be built in Timiºoara (CTP, VGP and WDP), Cluj (Transilvania Construcþii and CTP) and Piteºti (CTP). Also, CTP and VGP will start new projects in Sibiu.

Last but not least, next year is expected the construction of logistics centers announced by MLP in Poland, or by Global Vision. The latter announced new developments in Bucharest and Constanþa.