Strong development of the groupage segment

Apr 18, 2021News

Gopet Trans reported a 30% rise in its revenues from groupage services (LTL shipments) between Sofia and Athens in 2020, compared to the previous year. The company has maintained its stable growth outlook in the last 4 years. In 2019 the revenue growth has reached 10%, in 2018 – 37%, and in 2017 – 31%.

“As opposed to Full Truck Load (FTL), the Less than Truck Load demand surged in the last year and the main reason behind it is the changing business conditions as a result of the global pandemic,” commented Milen Barabunov, Transport Manager for the Bulgarian and Greek markets in Gopet Trans. “Although the LTL market has seen a growing demand since our inclusion in the European Union, today the interest is even higher,” he added.

LTL market growth factors

LTL shipments are characterized by less volume and weight and are grouped in different freight units, which occupy less space in the truck (FTL). “Unlike FTL shipments, where approximately accurate annual planning and regular annual routes are possible with less deviation when planning LTL shipments we have to take into account more factors when creating the load plan,” explained Barabunov. “If we have to segment our customers into ones that generate FTL shipments, and others – LTL shipments, this would be a very difficult, even impossible task, because we, as well as our customers, work in an insecure and dynamic environment, in which we need to be agile and flexible in order to cope with changes in supply and demand,” he said. The current pandemic crisis pushes even the major manufacturers to start offering their products directly to the end customer and operate not only in the B2B (Business to Business) market but in the B2C (Business to Consumer) market as well. According to the expert, an important factor for growth in LTL shipments is the thriving e-commerce and its huge impact on the businesses, which enter the B2C market with their e-commerce websites. “In the last year we’ve won a lot of customers with e-commerce websites,” Milen Barabunov said.

On the other hand, smaller order fulfilment, combined with the fact most companies don’t have enough warehousing space, significantly boosts the demand for groupage transport. “Our customers are not only small companies, which continue their successful work in the pandemic crisis but also major manufacturers, who expand their markets directly to the end customer with an online presence. Even big enterprises on the home appliances, furniture production and food chain markets, who annually load huge volumes with full trucks, take advantage of LTL shipments. We also see a change in our smaller customers’ business. They usually ordered LTL shipments once in two to three weeks, but now they order several shipments in a week – this is a clear sign of their developing business. To those customers we offer delivery options to external markets, in addition, to complete support,” Milen Barabunov said. “Certainly, we don’t cherry-pick our customers, either because of their size, or because of the frequency of their orders.

Every customer is important and valuable to us.”The international and local rise in LTL shipments provokes a strong interest among the logistics providers and as a result, many of them add groupage transport services to their portfolio. What distinguishes Gopet Trans from the competitors on the LTL market is the agility, high service quality and detailed understanding of the customer’s business, its needs and its background. “Because of the lack of storage space, the order is often made at the last minute. We offer an agile solution to those customers – a fast delivery in a few days to the door of the end customer. We are ready to go only with a 24-hour notice from the customers, which is very important to them. We provide short response time at a competitive price”, Milen Barabunov added.

Gopet Trans offers LTL shipments to door, to warehouse, or a combination of warehouse and door (the package is stored in the warehouse with postponed delivery). “On many occasions our customers prefer not to concern themselves with the logistics and expect us to offer shipments according to their needs. We strive to provide our services without engaging them in the operational details – we perform our duty according to criteria set by the customer,” Milen Barabunov stated.

Winning the customer’s trust is also an important factor for a high quality service. A key competitive advantage, that Gopet Trans has been building for years, is the trust and detailed understanding of the customers’ business needs and even staying ahead of their needs and decisions. The agility, fast response, optimal price, the significant shortening of delivery times, the in-depth knowledge of the customers’ products and the high requirements for loading, unloading, securing the packages and the vehicles, and last, but not least – offering the most appropriate solution, are among the key factors for Gopet Trans’ success in LTL shipments, its constantly expanding customer base and strong financial performance. Although Gopet Trans is well-known with its FTL services, the groupage transport becomes an increasingly important component of its portfolio.

The “Balkan Groupage Corridor” Vision

Gopet Trans delivers LTL shipments within Bulgaria at a fixed price, which doesn’t depend on the time of delivery. The service is also available in Greece and Romania (the groupage lines Sofia–Athens and Sofia–Bucharest). “The groupage line Sofia–Athens to our warehouse started in 2014. Since then we’ve been steadily increasing the delivery volume and today we’re offering daily freight trailer shipments from Sofia to Athens and back,” Milen Barabunov commented. At first, when the groupage line was established, shipments were made two times a week (on Monday and Thursday), and 20–30% of the trucks’ capacity was used. Now, Gopet Trans is transporting shipments by schedule with 12 to 15 trucks exclusively to Athens. Regardless of the closed borders during the pandemic, the company has increased the number of trucks, serving the groupage lines, and thus kept the delivery frequencies.

Gopet Trans has been dynamically developing its groupage line Sofia–Bucharest, transferring the good practices from the Greek groupage line. The company plans to unite all its transport corridors on the Balkans, thus creating its own “Balkan Groupage Corridor”. “The idea is to join our groupage corridors in the Balkan region and then link them with the lines in Western Europe – between Bulgaria and Italy and between Germany, Benelux and Bulgaria. In addition, we plan to start groupage lines to Turkey, Serbia and other Balkan destinations,” Milen Barabunov said. “Based on the growth of shipments, we believe we can achieve a significant increase in LTL shipments, not only in terms of volume but in revenues too.” All shipments to and from Europe go through Gopet Trans’ warehouse in Sofia, and offering the most competitive solutions and winning as many customers as possible with e-commerce platforms is the way forward.

Protecting freight in an LTL environment

Gopet Trans ensures the safety of the freight by checking the state of the freight at every single stage of transportation. First and foremost, the company checks the barcodes of the freight via a warehouse management system, when it enters the warehouse, and also when the freight is shipped to the truck (comparing labels with the data in the warehouse management system). The next check is performed by the drivers in the trucks and another one is done, when freight is reloaded into the warehouse it has been sent to. What’s more, all trucks are equipped with a GPS system and additional physical control is imposed thrice a day, by phone. Since 2020 Gopet Trans has been working with a new ERP system, which is specifically adapted to its needs and unites all departments. Soon the customers will be able to check the status of their freight via web platforms, linked to the ERP system. Furthermore, Gopet Trans has a special registration in a global web platform, enabling 24-hour truck tracking by both the company and the customer. “We pay special attention to our subcontractors (carriers and warehouses) as well,” Milen Barabunov explained. “We expect them to meet certain criteria and we annually audit them to determine whether they follow our rules.”

“Groupage transport plays a key role in the transport business and the ability to deliver goods, smaller than a pallet, is becoming increasingly interesting for companies in the industry, which include LTL shipments in their portfolio. The key in this competitive environment is which company will offer a better logistics solution at the optimal price and thus gain the trust of customers on the one hand, and to achieve better results, on the other. These are our main objectives,” Milen Barabunov concluded.