A conversation with Beata and Matthew Malek, owners of XL LOGISTICS, sheds light on current trends and challenges facing the logistics industry, as well as how to deal with them. As experienced players in the market with more than 17 years of company history, they will share their insights on the evolution of land transportation, the role of technology in the industry, and how XL LOGISTICS is gaining a competitive edge.
What changes and advances do you notice in the field of land transportation in recent years?
We note several trends causing the road transportation market in general to undergo dynamic changes. Certainly, the development of new technologies, the unstable political situation, the increasing pressure to raise driver salaries and the rising costs associated with fuel price increases and labor costs are changing the image of the Polish (and not only) transport market. Undoubtedly, the pandemic time has affected the functioning of the entire transport industry. It is worth noting that the crisis affecting the transport sector, part of the global economic crisis caused by the COVID-19 pandemic, required intervention both at the national level and within the framework of coordinated action by the European Union. The year 2023 was marked by a slowdown in the economy, rate cuts and changes related to the situation in Ukraine. The biggest impact on the road transport industry in Poland was the downturn in the economy. The number of transport orders declined, service prices fell. A decline in demand for trailers became noticeable. Due to the economic downturn, freight rates decreased. Information about this phenomenon can be taken from the trans.eu report titled “Transport and logistics market in Europe 2023/2024”. The changes were very noticeable in late 2022 and early 2023, at which time spot rates fell below contract rates for the first time in more than six years. It is worth adding that Poland has become a “hub” for supplies to Ukraine, a country at war with Russia. According to recent estimates, Ukrainians have made 1.2 million shipments in 2023 – that’s 7.5 times the pre-war permit pool. This, in turn, has caused dissatisfaction among domestic transport companies. The problem is still relevant today. The geopolitical situation has contributed to the blocking of traffic to the East through Belarus, Russia and Ukraine. As a result, there has been a shift to a route through the Balkans and Turkey and on toward the Caucasus either by land or through the Black Sea. Interestingly, in 2023, shipping companies from Turkey began to appear on the Polish market on an unprecedented scale. The source of the change, the so-called. “little black swan”, also turned out to be the legal regulation introduced in Germany, concerning highway tolls depending on theCO2 emitted. It is worth mentioning that in Poland, trucks are not allowed to overtake each other on highways from mid-2023. We are also noticing more optimistic signals in the market. The Polish transport industry is recording growth in tonnage handled and freight work. However, there are also difficulties in this area regarding the ever-worsening shortage of drivers on the labor market. In 2024, road transport companies will increasingly feel the pressure of environmental impact. There will also be other changes. One of them is the planned introduction of e-CMR, or electronic waybill.
Why do you think land transportation is a key component of modern logistics?
In our view – and we probably won’t be original here – land transportation is a key component of modern logistics for several important reasons. First, land transportationallows access to various areas, including those that are difficult to reach by other means of transportation. Road and rail transportation allows access to places that may be far from ports, airports or other logistics points. Another advantage of land transportation is flexibilization (flexibility) and speed. Land transportation, especially by road, is often more flexible and allows goods to move quickly from point A to point B. This is especially important for general cargo or door-to-door deliveries. Cost effectiveness should also be emphasized. Compared to other modes of transport – land transport can be more economical, especially for short and medium routes. Many logistics operations rely on the cost efficiency of road or rail transportation. An important aspect that determines the attractiveness of land transport is the road and rail network. Many countries have a well-developed road and rail infrastructure, which facilitates the movement of goods. Access to a network of roads and railroads makes it possible to connect different areas, which is crucial for logistics. Also in the context of urban logistics, land transport, especially road transport, is essential for delivering goods to stores, warehouses or individual customers in urban areas. As such, land transportation plays a key role in the entire supply chain, affecting the flexibility, cost, accessibility and efficiency of global and local logistics operations.
Do you see any new trends or technologies that may impact the industry in the coming years?
In our opinion, the new trends that transport sector players need to prepare for include the growing importance of new technologies, high pressure on the use of new energy sources, which is related to environmental care and embedded in European Union policy. In this regard, we think that a number of significant changes will be noticeable in the near future. The electrification of the freight vehicle fleet will become noticeable. In practice, this will translate into the introduction of electric delivery vehicles and trucks, reducing greenhouse gas emissions, and the expansion of charging infrastructure for electric delivery vehicles. In our view, the development of autonomous vehicles for freight transportation will take place in the near future. There will be large-scale testing and implementation of trucks capable of autonomous driving on longer routes, and in the longer term, research into the efficiency and safety of driverless trucks. Our opinions are based on analysis of scientific articles and specialized reports on megatrends in global transportation. Another trend, already clearly visible in road transportation, is the growing interest in route optimization and fleet management. Large-scale use is already being made of GPS technology and fleet management systems to optimize routes, reduce downtime and minimize fuel costs. On an even wider scale will come the use of data analytics to optimize route planning and avoid traffic jams. Also prominent is the use of telematics in logistics, which in practice means engaging telematics systems to monitor vehicle status, cargo temperature and other parameters. The result will be improved efficiency in logistics through remote tracking of vehicles and cargo. It is part of the Europe-wide policy to take care of the environment, so the transport industry is also working on reducing emissions. There will undoubtedly be a development of alternative fuel vehicles in freight transportation. In the near future we can expect hydrogen or hybrid trucks. This, in turn, will force investment in infrastructure to support alternative fuel vehicles in freight transport. Of course, in the realm of new technologies, there will be further integration of logistics platforms and electronic transportation markets. We expect the use of digital platforms to integrate logistics processes on a very large scale, from procurement to delivery. As a result, this will facilitate cooperation between carriers, freight forwarders and logistics companies.
We are even confident that there will be efficiency gains through automation of logistics processes. For example, automation of loading and unloading processes will speed up logistics operations. We also believe that it will be possible to use robots for storage and movement of goods.
In what do you see the competitive advantage of XL LOGISTICS compared to other logistics companies?
It’s hard to talk about ourselves, because, after all, it’s the customers who ultimately evaluate the service they receive. However, given our experience and the clients we have acquired (including significant market players), we can share our thoughts. We believe that our competitive advantages stem from both having “hard, tangible” assets, as well as being based on “soft” assets linked to so-called “intangible” resources. intangible resources of the company. XL LOGISTICS has several important competitive advantages compared to other logistics companies in the market. Among them, undoubtedly, 17 years of experience allows us to be perceived by our more than 1,336 customers as a reliable, proven, trustworthy company with the knowledge and capabilities to handle complex logistics processes. At this point we move on to another differentiator, which is the comprehensiveness of service. Our customers see value in the fact that XL LOGISTICS, as a single entity, can meet not only their freight or shipping needs, but can also offer them warehouse space, cargo consolidation/deconsolidation services, cross-docking, local/regional distribution, customs clearance, i.e. everything that requires complex coordination and cost-organizational optimization. In addition, our differentiators are specialized services: transportation of ADR dangerous cargo, transportation of waste or animal by-products, which require international permits, entries in relevant registers, such as veterinary or BDO, and having properly equipped equipment and trained employees. Recently, our double deck semi-trailers, which allow customers to reduce transportation costs by loading twice as much cargo in one truck, have become very popular. These services also stand out for their eco-friendly nature, reducing the burden on the environment, which is increasingly important when choosing suppliers and sustainable solutions.
Another source of our competitive advantage is the fact that we own warehouses with a total area of 5000 sqm, located in great locations in Poland by the A4/A8 highways in Wroclaw and near the A1 in Czestochowa. The convenient location of the warehouses greatly helps us to cost-optimize the distribution and picking of group shipments on east-west and north-south lines. The range of warehousing services increases our flexibility and efficiency in handling the entire supply chain of our customers. A very important resource of XL LOGISTICS is our employees. We are proud to have in our team people who have been working for us since the very beginning of the company. This proves that the family atmosphere in the company, the individual approach of us, the owners, to each employee are important for our employees, thanks to which people want and like to work for us. We know that a close-knit team of shippers, sales department, back-office, drivers and fleet supervisors is a very strong pillar on which we build the strength of our company. That’s why we take care of the development of our crew, we organize periodic training courses, language learning and practical workshops, thanks to which we enter together at a higher level of competence and skills, and this helps us with more courage to enter more ambitious and complex projects of our customers.
How do you deal with the current difficulties in the logistics industry?
The logistics industry requires constant observation of trends, exploitation of market opportunities and very careful recognition of customer needs. We are aware that we operate in a very turbulent environment. We try to anticipate upcoming changes, using the opinions of external experts, observation of competitors’ activities (benchmarking procedures), and we try to introduce innovations in our company. This includes not only those related to technologies, but also marketing, process and organizational innovations. In addition, we are diversifying our customer portfolio, opening up to serve new segments, such as retail chains and investment (commodity) funds. We are also expanding our transport offer to include deliveries to/from countries outside the European Union, such as Ukraine, Turkey and Kazakhstan, which, with the economic slowdown in Western countries, may increase the dynamics of our orders and revenues. We believe that putting customers at the center of our operations is the key to overcoming difficulties. In practice, this is accomplished through advanced customization of our offerings. Overcoming difficulties correlates precisely with taking care of customers. In the context of a logistics company such as XL LOGISTICS, customization refers to several aspects in the area of services provided. XL LOGISTICS offers customized logistics solutions tailored to the needs of specific industries. For example, handled shipments from industries such as waste, pharmaceuticals and medicine, dairy, plastics, electronics, agriculture, mining, manufacturing, energy, construction, automotive, apparel and many others have unique transportation and storage requirements. We offer customizable transportation fleets to meet the specifics of different types of goods, from handling specialized cargo to delivering goods under specific conditions (e.g., temperature controlled). XL LOGISTICS provides customized additional services such as customs handling, real-time tracking of goods, or even customized packaging and labeling options. Taking customers’ needs into account in a very broad sense is evidenced by the customization of warehouses for specific customer needs, including inventory management, handling of specialized goods or flexibility in the area of warehouse space. Attention to quality and providing benefits to customers helps overcome any difficulties in the long run.
Other measures that increase the attractiveness of the services provided and thus competitiveness are the customization of customer service processes to meet individual customer requirements, offering dedicated logistics consultants or adjusting complaint handling procedures. Also, the creation of customized logistics plans, taking into account specific routes, delivery times, flexibility in order management and other customer needs, is an important competitive asset for the company.
In summary, we conclude that customization in the logistics area is a key element because it allows a company to tailor its services to meet the diverse needs of its customers, which can help increase customer satisfaction and build long-term business relationships.
