Member Interview: Meridian Logistic Company, Bosnia
WFN Members are highly competent in their field, with a wealth of experience and knowledge to share.
We regularly invite our members to share their views on the forwarding industry and give us their comments on the industry.
We recently interviewed Gordana Đokić, Manager at Meridian Logistic Company in Bosnia:
Short Presentation
"The company has a long tradition of operating in the transport, warehousing, forwarding and logistics industries. It was founded in 1948 and under its current name Meridian has been operating since 1990 in BiH, its immediate region and in the EU through its 18 branches, 152 employees, provides transport, warehousing, customs clearance and complete logistics services for its customers. We are one of the top 3 logisticians in Bosnia and Herzegovina."
Your thoughts on the logistics industry today and how things have changed due to the Pandemic?
"Today's logistics industry is important for the functioning of the economy because it is becoming a key support to the economy / companies in the field of customs clearance, distribution, transport and storage of products. The final result of the cooperation between the economy and companies from the logistics industry is the creation of an outsourcing logistics function of the company as a narrowly specialized function in the economy.
In recent decades, the logistics sector in Bosnia and Herzegovina has developed with an average growth rate of about 8-10% annually, but this can no longer be predicted given the developments this year. The impact of global economic developments is also felt in BiH, in a way that smaller independent logistics companies cannot survive, and there is a consolidation in the sector with an emphasis on the dominance of private capital. New entries into the logistics market in BiH from the private sector are noticeable, but the presence of representatives of world logistics companies in the last decade is also evident, which indicates that BiH is becoming an interesting market, albeit of small scope and activity. About 340 freight forwarders are registered in BiH, of which about 10 can be counted as large.
The outbreak of the pandemic was significantly felt starting in February 2020, when the first problems appeared in the stopped container transport, which is mainly related to the People's Republic of China, with which BiH has a significant trade. From the company's point of view, the pandemic caused an increase in costs related to maintaining job security, increased transport safety and difficult transport in the form of convoys, while freight forwarding services were limited to only a few border crossings from BiH in the area. The company kept all its employees working at full capacity, given the permits of the state and customs authorities of BiH to be able to operate even during a crisis situation in the country. Also, the company did not have registered infected employees and the drivers complied with all measures after returning to BiH.
The pandemic as an unforeseen phenomenon at the global level has forced the logistics sector to pay more attention to business risks that until then did not have such an impact, and now have almost a primary impact on business, because the risk directly affects the workforce without which it can not operate. the company as a whole. In addition, the suspension of the company either on the basis of government measures or due to the implementation of isolation among workers, led to the projected income of Meridian by 20% lower than expected and the real economic effects can be seen only at the end of the year. A large number of clients with whom the company cooperates requested deferred payment or had a suspension of operations in the period March-May 2020, which continued to cause a decline in the company's revenue due to the cessation of the need for services or to a much lesser extent. State aid is minor in reimbursing new costs, almost non-existent, especially in this sector, which is considered to have operated, albeit in difficult conditions."
What are the main challenges facing independent forwarders?
"The main challenge for independent freight forwarders in general, and which can be applied to BiH, is the recession and the decline in economic activities facing the economy at the global level, because recessions are no longer cyclical and unpredictable. Closely related to this is the difficult access to working capital, either through illiquidity or insolvency in the economy or the narrow criteria that the banking sector sets as a condition for financing operations. Since the logistics industry relies entirely on the provision of services to the economy, with the decline in economic activities, their revenues also fall. Another challenge that can be mentioned is unfair competition as well as taking over by stronger logisticians if they believe that there is an interest in creating a dominant position in the sector."
How relevant is networking in today’s forwarding industry?
"It is extremely important, given that the logistics industry can create an offer that the customer will be satisfied only if it is done in the shortest possible time, with the best transit time of delivery or service in all segments. Online platforms as well as online networking through membership in specialized networks in the industry enable the timely receipt of information about the time and speed of customer service, which is crucial in this industry."
How do you see the future for independent forwarders?
"BiH is a small open market economy and does not have much influence on the region in terms of economic activity, except in the placement of electricity and primary raw materials such as wood or ores, and the economic environment as such still requires ad hoc services from its freight forwarder. By strengthening the economy at the level of BiH, the role of independent freight forwarders and the sector as a whole will be strengthened. Independent freight forwarders have two options either to strengthen and grow (either to invest in business expansion or to enter the network of a larger freight forwarding organization) or to abandon market competition. Meridian has chosen to grow and strengthen, investing in its transportation, material and human capabilities. Proof of that is the beginning of the construction of the goods and customs terminal in June 2020 in Banja Luka, which is the second largest city in BiH, and the value of the investment exceeds 5 MEUR."
www.meridianbl.com