Hav­ing suc­cess­fully re­struc­tured its en­tire busi­ness model, Du­ma­gas now stands proud as a trans­porta­tion ser­vices leader in Ro­ma­nia

EME Outlook - - Shipping & Logistics - Writer: Tom Wad­low | Project Man­ager: Richard Thomas

De­spite clear and ob­vi­ous chal­lenges, East­ern Europe’s lo­gis­tics in­dus­try re­cov­ered dur­ing the course of 2017. Specif­i­cally, re­search body Trans­port In­tel­li­gence high­lighted Ro­ma­nia as a mar­ket show­ing par­tic­u­lar prom­ise, its road freight sec­tor alone ex­pected to grow by €1 bil­lion be­tween 2018 and 2020. Ro­ma­nia is seem­ingly shielded from some of the un­favourable con­di­tions fac­ing the wider con­ti­nent, be it staff short­ages or lag­ging in­vest­ment in in­fra­struc­ture, and com­pa­nies like Du­ma­gas are play­ing its part in en­sur­ing the sec­tor con­tin­ues to de­velop strongly.

The trans­port pi­o­neer has been par­tic­u­larly suc­cess­ful in at­tract­ing and re­tain­ing skilled em­ploy­ees, which for CEO Mircea Vlah are the Com­pany’s most valu­able as­sets.

“Du­ma­gas Trans­port S.A. holds the high­est ex­per­tise in manag­ing trucks and driv­ers in Ro­ma­nia,” he says. “This rep­re­sents a high-value as­set nowa­days as driv­ers are hard to find and mang­ing a low mar­gin busi­ness be­comes heav­ier for all trans­port com­pa­nies.”

Op­er­at­ing a fleet of 200 owned and 200 sub­con­tracted trucks along­side a 5,000 square me­tre low tem­per­ate ware­house, Du­ma­gas gen­er­ates 80 per­cent of its rev­enue from full truck load ac­tiv­i­ties and 20 per­cent from lo­gis­tics.

Such ser­vices in­clude trans­porta­tion of gen­eral cargo, car car­ri­ers, in­dus­trial gas tankers (ar­gon, ni­tro­gen, oxy­gen) and low tem­per­a­ture ware­hous­ing and distri­bu­tion of food.

“We op­er­ate with modern pro­cesses and pro­ce­dures which al­low us to have an ex­cep­tional con­trol of op­er­a­tions and take quick ac­tion to change course and im­prove re­sults month by month,” Vlah adds.

“Every­thing is man­aged by our ERP sys­tem, which is set up with real- time man­age­ment dash­boards for rev­enues, costs and re­sults es­ti­ma­tion by truck and by fleet.”

A com­pany trans­formed

In get­ting to this point, Vlah and Du­ma­gas un­der­went a sig­nif­i­cant trans­for­ma­tion process to en­sure its fi­nan­cial longevity.

“My first ob­jec­tive was to sta­bilise op­er­a­tions, avoid fi­nan­cial col­lapse and re­struc­ture the Com­pany from an en­tre­pre­neur­ial ba­sis to cor­po­ra­tive model,” Vlah ex­plains. “This trans­for­ma­tion hap­pened from March 2014 un­til June 2016.

“This in­volved be­com­ing trans­par­ent about re­sults and fig­ures – all op­er­a­tional teams and mid­dle man­age­ment started to get ac­cess to our re­sults each month. We also started to mea­sure per­for­mance by truck and by de­part­ment, day by day, and dis­cuss in­ter­nally how to im­prove it.”

Such trucks have been sub­ject to a sweep­ing up­grade pro­gramme, a four-year plan de­signed to com­pletely re­fresh its fleet and en­sure it is among the most modern on the mar­ket.

“We con­stantly look for new tech­nol­ogy to re­duce fuel con­sump­tion, to mon­i­tor and im­prove

op­er­a­tional per­for­mance, and to adapt com­mu­ni­ca­tion and telem­at­ics mea­sure­ments,” Vlah adds. “We only op­er­ate new trac­tors that are less than four years old. Three years ago, we launched a car­bon-free pro­gramme by off­set­ting our car­bon foot­print for the en­tire fleet.”

An­other fo­cus has been on cash flow. Whether it be tight­en­ing up pay­ment terms or im­prov­ing vis­i­bil­ity of the col­lec­tions process with cus­tomers, Du­ma­gas has been able to im­prove­ment its fi­nan­cial stand­ing re­gard­ing cash in the bank.

Pow­ered by peo­ple

The fi­nal com­po­nent of Vlah’s trans­for­ma­tion plan, and ar­guably the most im­por­tant, in­volved boost­ing in­vest­ment in Du­ma­gas’s em­ploy­ees.

“We in­vest in peo­ple and have de­vel­oped a cul­ture of com­mu­ni­ca­tion and work which is hard to find in sim­i­lar com­pa­nies from the same in­dus­try,” he says.

This has helped har­ness a pro­mo­tion from within ethos, with all man­age­ment ap­point­ments be­ing ini­tially looked at in­ter­nally be­fore search­ing for out­side can­di­dates.

Once on board, staff are of­fered ex­ten­sive op­por­tu­ni­ties to train and de­velop. “Over a one-year cy­cle we try to cover each full-time em­ployee with 52 hours of train­ing both ‘at-the-desk’ and ex­ter­nally,” Vlah con­tin­ues.

“There is a team­work­ing el­e­ment that bounds our team to­gether and gives sup­ple­men­tary mo­ti­va­tion, and this was one of the key in­gre­di­ents which saved our com­pany from in­sol­vency. I am grate­ful to my team

their out­stand­ing per­for­mance which to­day gives us the chance to talk about fu­ture plans and sus­tain­able de­vel­op­ment.”

In­deed, a set­tled and mo­ti­vated work­force will only serve to carry Du­ma­gas for­wards into the next chap­ter of its story.

For Vlah, ex­pan­sion into new mar­kets is very much on the radar. He con­cludes: “In three to five years’ time I should be able to re­port a steady growth of com­pany rev­enue, profit and eq­uity value. I want is to drive over­seas ex­ten­sion in the EU and be­yond EU bor­ders and ex­tend into air, ocean and mul­ti­modal trans­porta­tion.”

Mircea Vlah, CEO, Du­ma­gas

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