EU accession: an anticipated boom
By : Wioletta Buczek
Pallet for success: Polish freight forwarders are improving infrastructure in preparation for EU competition.
While Poland's top-10 freight forwarders are already having a heyday with a combined 60% of the market, they predict that once the country joins the European Union (EU) business will really start to take off.
"I think when Poland joins the EU some five new internationally renowned companies will enter the Polish market," said Frank Schuhholz, chief operating officer at Hellmann Moritz International Forwarders. "Others, which are already here, will expand their business to become more competitive. Therefore, it is good that my company is already here because that gives us a competitive edge over latecomers."
Grzegorz Lichocik, logistics director with domestic logistics firm Spedpol, agreed that increased opportunities afforded by EU membership such as more frequent eastbound freight transports mean that additional foreign firms will find Poland a good place to set up shop. "When Poland enters the EU, we will see several new companies entering the market."
But while Union membership may mean stepped-up transports for the big firms, smaller freight forwarders might find joining the club bad for business.
"The key players will have to cut prices, while about one-third of the smaller domestic companies, which constitute 40% of the Polish freight-forwarding market, will have to learn to adapt because EU ecology requirements and taxation levels will make their business unprofitable," Lichocik said.
In the meantime, domestic freight companies are working to expand their networks and IT systems to boost competitiveness before Poland joins the EU. "We've been developing an IT system for some time and it is consuming a significant part of our annual budget," Schuhholz said. "But it's our future because without efficient communication we will not be a reliable partner for EU member companies.
"In addition, we are constantly expanding our network of terminals," Lichocik said. Spedpol now has 965 employees and 18 terminals throughout the country.
Market observers said freight forwarders are also adjusting their level of services to reflect customers' increased expectations. Beyond being required to move a product from point A to point B, forwarders are expected to know particular territories, act as an adviser, deal with warehousing problems, and sort out thorny customs issues.
"I think the sector will undergo huge development in Poland and will evolve toward more specialized services for customers and at the same time involve more comprehensive duties," said Ewald Raben, president of Netherlands-based freight forwarder Raben Group.
"Today companies are starting to compete through so-called one-stop shops," Schuhholz said, adding that only 20% of Hellmann's services available in Germany are provided in Poland. "There are many products known and used in Germany for many years that have not entered the Polish market yet. This proves that the market is still developing and leaves room for development of such products."
As for the main issue dominating freight forwarding today, Schuhholz cited next-day deliveries. He said that while Polish customers have requirements comparable to Western Europe, they often demand services they do not really need: "For example, a company says it wants a pallet to be delivered within 24 hours. We will provide them with the service, but does the pallet really need to be delivered by the next day? The customers somehow got used to a certain service level without knowing the real price behind it. In Germany, value-added or premium services are priced quite expensive and companies do not order what they don't really need."
