DB Schenker Romania and Romtrans have officially become a single company
The acquisition of the shipping house Romtrans by the Romanian subsidiary of DB Schenker was the largest transaction on the transport market in 2009. On January 1, 2010, the merge became effective so that we can talk about a single company, Schenker Romtrans, which is leader on the shipping house market. Railway Pro put together an interview with General Manager Albin Budinsky wanting to find out more about the company’s expectations in the year which has just begun and how the company would manage to maintain its dominance given the fact that its main competitors expanded their services and announced massive investments for 2010.
When the merge became official, Albin Budinsky declared that railway freight transport was impoverished by large infrastructure access charges and the tariffs imposed by the national freight operator which damage competitiveness and therefore, the railway market was still not a safe target for the near future. Did the general manager change his opinion following the new evolution of the market or the accession of the first foreign players on the cargo market in Romania and who find the railway sector attractive?
Railway PRO: Mr. Budinsky, how does the process of assimilating Romtrans activities and establishing a single company within DB Schenker group go on?
Albin Budinsky: Last year, DB Schenker Romania and Romtrans have overcome together a series of significant changes. Although, it was necessary to cross several forerunner stages before the acquisition process was completed, now we can say that we came to the final step. It was everything but easy to promote the image of a single team while we appeared as two different companies in all official documents. But this situation ended quite fast because at the beginning of the year the acquisition process was completed and thus we became a single company, namely Schenker Romtrans S.A.
I would also have to add that, despite the fact that legal formalities took a lot of time, our employees have been already working as a single team for more than half a year. We are enthusiastic about the fact that the two companies completed one another and replaced their weaknesses with strong points thus resulting in a strong and united team more rapidly than we had expected.
Railway PRO: What do you expect from this year?
Albin Budinsky: As I have said before, the two companies have officially become one company and we are planning a marketing campaign to make this thing known. Most probably we will see the feedback of this campaign in the first month of the year.
Also in 2010, we will focus on improving the provided services by fully exploiting the potential of the densest national network that we have and which is now supported by the international logistics network of DB Schenker.
We will also focus on adapting our services to the current financial situation. In fact, the first step in this direction has already been taken on September 1, 2009, when we launched our first internal bulk service. The internal bulk system is based on the four transit terminals in Bucharest, Arad, Cluj and Iaşi and which are directly connected with the hub in Braşov and further with the entire national network which includes over 70 work points. This way, we manage to ensure a continuous flow and a transit time of only 24-48 hours. This system is customer oriented in this difficult economic period when shipping volumes have significantly dropped and every cost is carefully analysed.
We plan to launch a modernisation programme for all our intermodal terminals in order to attract more customers.
“We design solutions with our customers”
Railway Pro: How do you intend to counteract the new future competition of strong international groups (OBB-Rail Cargo Austria, Gebruder Weiss), which has recently launched intermodal freight and logistics services in Romania?
Albin Budinsky: We respect our competitors but, at the same time, we don’t fear competition because we permanently focus on improving the provided solutions and aligning our services to the most severe international quality standards. These are the elements which define the philosophy of the mother company Deutsche Bahn.
I would also like to add the fact that we provide individualized services, especially in what concerns logistics where we design solutions with our customers to make sure we reach the most efficient alternative.
Railway Pro: At the beginning of the year, RAILION became DB SCHNKER RAIL. In which way this news changes DB SCHENKER’s philosophy?
Albin Budinsky: For a long time, Romtrans has been the leader of railway freight shipping houses. Now, after the acquisition, DB Schenker Romtrans is also leader on the profile market.
Moreover, we have our own railway terminals in Bucharest, Oradea, Constanţa, Iaşi, Galaţi and Cluj. DB Schenker Romtrans provides the entire range of railway services including: transhipment services, loading/unloading directly in/from broad gauge wagons in our own terminals in Galaţi and Socola-Iaşi, customs formalities and permanent transport monitoring. With DB SCHENKERailog we define the best routes for our customers, efficiently combining road and railway transport, organising intermediate storage near the production centre and just in time deliveries.
A terminal of major importance for Schenker Romtrans is the MOL 1 Agigea Sud centre which includes 17 kilometres of access railways that we manage through a concession contract with Constanţa Maritime Port Administration (APMC) and which ensures access to that category of customers which includes maritime and port operators for whom we expand our services.
Back to your question, I can say that railway transport is a permanent priority for DB. Deutsche Bahn is European leader in railway freight transport and a significant player on intermodal and logistics transport market. That helped the group to initiate a massive expansion process in all European states, a process which also includes the merge of Schenker România and Romtrans.
Railway Pro: When do you expect your company’s offer to expand and include railway transport services as well?
Albin Budinsky: Unfortunately, railway transport market has been seriously affected by CFR Marfă’s decision to increase tariffs by 20% in the context of the current economic crisis. Consequently, cargo transport on railways has suffered a significant drop. These aspects determine us to be extremely careful in choosing the right moment to access the railway market, but DB Schenker will most certainly find this right moment and make the best of it.
Deutsche Bahn group will constantly consider the expansion of its railway services on the markets which are considered attractive for the global development of the holding.
“This is surely a time when only the most powerful and flexible players can survive.”
Railway Pro: How do you think the economic downturn will affect the transport market in the year to come? Do you believe we will witness the end of this economic distress?
Albin Budinsky: Unfortunately, transport and logistics markets have been seriously affected by the economic crisis. Many companies have been forced to cut or even cease their activity. Also, imports and exports reduction and the drop of manufacturing market have had a deep negative effect on transport market. This is surely a time when only the most powerful and flexible players can survive, those who know to adapt to the current economic conditions. It is true that we have also been affected by the present economic troubles and we had to take measures to damp negative effects. However, we are optimistic and we think we will manage to overcome this difficult period.
Railway Pro: What do you think about Romania’s main advantages in attracting large European players on intermodal transport, logistics and shipping markets and how could Romania become the main transit hub for intermodal transport between Europe and Asia?
Albin Budinsky: Romania has lately become an important transit hub in European freight transport. Taking for example the railway hub in Oradea, one of our key locations in railway transport, we can say that, in the past couple of years, there have been significant increases in shipped cargo. What I want to prove by giving this example is that Romania and especially the western side of the country is an attraction point for international shipping houses due to its favourable geographic position.
Of course that we cannot ignore the fact that the EU accession has eased cargo traffic in Romania, thus encouraging the development of the local market of shipping houses. This development will also trigger cargo transport from Asian areas, as companies in this region will be interested in the shortest and most reliable way of bringing their freight to Western Europe.
Enriching intermodal offer
Railway Pro visited the largest terminal of DB Schenker Romtrans in Bucharest. Chitila intermodal terminal was built before the Revolution to serve freight traffic to and from Târgovişte and Ploieşti. The railway line to the two cities intersects in the area. The terminal has a strategic position. The road network is also well represented, as the terminal is close to the junction of Bucharest ring road and National Road 7, whose extensions reach important economic centres such as Piteşti, Găeşti or Târgovişte. The railway infrastructure is not currently used, but there are projects to rehabilitate terminal lines which are managed by CFR SA. In the future, Schenker Romtrans hopes to enrich the intermodal offer of the terminal through a railway connection, the non-electrified double line of the terminal being connected to the main networks. Thus, the customers who will want to use the railway services of the terminal will have access to the routes to Ploieşti, Piteşti or Urziceni.
Interview recorded by Alin Lupulescu
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