through tough times for
Fiege Kft will complete its integration into the German Fiege Group, bringing
to a close the over one-year transition period from Rewico to Fiege. We spoke
to Árpád Vásárhelyi, CEO of Fiege Kft, about the current trends in logistics.
When will the last
lorry with a Rewico logo disappear?
We are in
the closing phase of the re-branding process. It is important to note that the
Rewico name doesn’t harm us. Many of our regular customers date back many
years. By the end of 2008 at the latest, all vehicles should display the Fiege
name. This is also occurring in conjunction with the modernisation of our fleet
for domestic distribution in
Last year one of the
largest providers on your market, Rynart, went bankrupt. What impact did that
have on your sector?
do not comment on the activities of our competitors, but we can make an
exception in the case of Rynart since it is no longer on the market. Rynart, in
my opinion, made a big mistake. It thought that with low prices alone it could
get the whole “cake” and then when everything was already wrapped up, achieve
economic success through synergies. They managed the first part, but in the
meantime the “cake” had gone bad. As a result of the Rynart situation we have
sensed a significant change on the market. Prices have partially risen, as have
customer requirements. For us it is very important that the market has
understood that there are many other important aspects to logistics besides
good in comparison with that of other countries in the region. What effect does
that have on your business?
our day-to-day experience reflects
Earlier we regularly had a very busy Christmas season, when we handled 50-70%
more orders monthly. For 2007, by contrast, we were only able to record 20-30%
extra incoming orders. This is primarily due to the new economic and income
What is the situation
regarding the development of costs in your sector? Fuel costs, real wages, etc.
Can you pass the rising costs on to your customers?
In 2007, we
had extremely high inflation. In addition, fuel prices rose by almost 20%
during the year, and despite the state’s increased tax revenues from raising
fuel prices, the government didn’t offer any compensation. We have been serving
many of our customers for more than ten years. With such long-term cooperation
arrangements, it is not easy to pass on all the extra costs of 2007. We are
speaking here not only of inflation and fuel prices. The cost of the lorry
entry fee for
city centre went up by 1,000%, toll charges increased and the rise in energy
costs in 2007 exceeded the inflation rate. All this amounts to a considerable
package. However, on the basis of open discussions, clear facts and arguments,
we managed, together with our customers, to find solutions to this difficult
issue which affects all sides.
EU member states,
in the logistics sector?
pressure can be felt particularly in two areas – international transportation
and regional logistics services. In the first area we can confirm that
Hungarian transport costs in the international transport field are no longer
competitive. Slovakian, Bulgarian and Romanian carriers are significantly
cheaper. There are several reasons for this – the tax burden, fuel costs, and
the price of lorries have all been higher in
countries for some time. Taxation overall is a problem for Hungarian
businesses. In the area of regional logistics services, it is not only
geographical location and infrastructure that are decisive factors. Taxes and
the total cost situation also play a big part.
advantage in the ‘90s, which is increasingly being lost.
competition in terms of being regional distribution centres. In
we are fighting back with effective processes and greater innovation. At the
same time, as a Hungarian company we expect support from Hungarian politics.
economic hub. What is your view of this in practice? Is
a hub by large international companies?
In the last
of its advantages; there has been too much philosophising about how
actually taken. The market entry of Asian companies in Europe represents a real
As a few decades ago, American firms established their head offices in Belgium
now Chinese, Indian and Arab firms are looking for the right place for their
get actively involved and support this, for example the large number of Chinese
We are already supplying services in this area and there is room for this to
develop significantly. That requires, however, further infrastructure
development and more concrete investment incentives on the part of
In Eastern Europe,
Fiege is also active in
In your opinion, with regard to the general conditions and the market, what are
the main differences between the two countries?
Union, legislation, tax regulations, and legal practice are national in
character. This has an impact right up to the framing of service contracts,
which require great attention. A significant advantage in
tax legislation. Decisions need to be made in
there are advantages in terms of infrastructure development and staff
availability. In the medium and long-term the general conditions will even out,
and innovation, the effectiveness of processes, the proximity to customers and
the network of service providers will be decisive.
Where do you see
growth potential in
potential for growth in two main areas. Firstly, in the area of complex
logistics services. We offer our customers warehousing logistics, distribution,
international transport services and customs services, and all these as
one-stop solutions. We can also provide special value-added services, such as
labelling and packaging. The second key area is regionalisation. We have
received an increasing number of enquiries concerning regional solutions which
we can successfully implement thanks to our Europe-wide presence.
How can you stand out
from the local competition?
thanks to our sector-specific know-how. The Fiege-Group specialises in various
key sectors, for example tyre logistics, trade and industry logistics, fast
moving consumer goods (FMCG), electronics and pharmaceuticals. On the Hungarian
market we have focused on the areas of electronics, tyres, FMCG and industrial
goods. If the market requirements change, of course we will be there from the
start. We also offer this specific know-how in regional or international
dimensions. A current example of new developments for us is the start of tyre
logistics in 2007. We now supply two of the world’s largest tyre producers with
the complete service package for tyre logistics in
is service quality. We aren’t the cheapest providers on the market, and nor is
that our aim. We see our task as implementing client-specific solutions which
have been developed for the given need.
The Fiege Group, whose head office is in Greven
leading logistics providers in
area of expertise is the development and implementation of integrated, complete
logistics systems. The group employs some 21,000 people worldwide. With over
222 branches and cooperation in 18 countries, the group offers a close-meshed
logistics network. Its largest customers include Bosch, Bridgestone, Esprit,
Haribo and Metro. The group’s turnover in 2006 was EUR 1.75 billion.
Fiege Kft, which has storage capacity of 30,000
sqm at the ProLogis-Harbor Park in south Buda and 6,000 sqm in Hungary’s key
regions, is one of the leading contract logistics providers in
The company, which was established in 1989, currently employs 153 people, and
recorded a turnover of EUR 10 million last year. Its key customers in
include Bosch, Bridgestone, dm, Hankook, LG and Whirlpool.