Source: Angelo Scorza
SHIP2SHORE
Online Magazine of maritime and transport economics
Ahmet Musul, founder of Turkish group Ekol Logistics, talks about his vision of business after starting the unprecedented block train Trieste-Kiel connecting Europe to Far East
Trieste – A very simple man indeed, well-mannered but quite determined and definitely smart, although with a clear vision of business ever since he started working in this sector 34 years ago.
“I started operating in 1983, when I was just 18 years old, in a Turkish freight forwarding company, where I stayed until 1990, before quitting to start my own firm; in fact my boss at the time was not confident enough about my model of business, so I decided to go solo; I was the first one to buy a computer in the transport industry in Turkey…” recalls Ahmet Musul, now 52, who has been able to found (literally from scratch) in Turkey a true logistics colossus, now embracing ships and trucks, warehouses and terminals, whose name has become very popular all over Europe: Ekol.
“Why this brand? I wanted to use and resemble the French word Ecole (i.e. School), to create a winning model of activity brand new, a different and unprecedented style in logistics” he ‘teaches’ to a very few members of the specialized press.
The occasion is the launching ceremony of the block train running from the Italian port of Trieste heading to the German port of Kiel that collects (mostly, but not only) Ekol trailers from Turkey – and in the coming time even from further beyond in the Far East countries – to go up to North Europe and, in the near future, to Russia too.
The combined transport service is regularly offered by German (although Italy owned, by Mercitalia FS Group) TX Logistik, once a week every Wednesday for the time being, with projections to enhance its frequency twice a week in middle 2017 (and maybe 3 times per week by the end of this year already), with two sea legs as a support: an initial maritime link from Istanbul to Trieste with ro-ro provided by Ekol’s captive shipping company Alternative Transport, and another one from Kiel to Gothenburg, Sweden, through ro-ro of Stena Lines, which is also project partner.
When the founder of the emerging Turkish group talks, calmly and frankly, about his vision of business, apparently everything seems smooth and plain.
“In a time when there are a lot of (even big) players who have to tackle serious difficulties, our growth is certainly faster than our competitors’ ones. We are successful just for a few reasons, the paradigm to respect are a few: we need to have motivated staff, we need to use the best technology, we use to develop our own software to be an excellence; not by chance we have 120 people dedicated to R&D and invested heavily in IT in order to fit our product and services with the expectations of the clients, the customer care is our main priority”.
What is interesting to learn is that Ekol works along his own strategy without looking at its peers.
“We learnt a lot from Dachser, which was our partner, and try to study tactics and strategies from others – our DNA is to watch and learn – although never using them as a reference. In fact our benchmark are not the transport companies but other industry; for instance, today Apple is our model of business and therefore to resemble this we conceived and developed specific tools. Another sample is the fashion industry, to march whose needs in 2001 we developed our own hanging garments system” explains Musul, who seems to be not satisfied of his great achievements yet. “We need to learn how to build any new process and to save something every day, I believe we are not at a good level yet and always tried to have things better, though things come step by step”.
Ekol is investing in ‘software’ and ‘hardware’ in a very balanced way; for sure not all money are poured into physical assets, and that is one reason for which the financial need is less than what one would think. “In 1994 we bought first 8 trucks, at present we have some 5,500 trucks. However Ekol could be 10 times bigger than today if we had not thought at buying all our own trucks to have a fleet in property; I repeat, the value is customers, not our company, we learnt from them as well. All our investments is made with credit, we have the contract of our customers as a valid warranty.
The same happened to the shipping division: we started the ro-ro business with a time charterer vessel from Cobelfret, with the obligation to purchase the vessel in 2013. Then we realized it was time to have our own ships and we placed the order in Germany, progressively empowering a fleet – for an investment of some 100 million euro – that is made of 6 ro-ro with the latest addition Meleq just delivered. However this was not our only main investment: another 20 million euro were aimed at building warehoused in Ankara”.
Ekol is listed among the pioneering suppliers of integrated logistics services in Europe with its distribution centers of 750,000 m² indoor areas in Turkey, Germany, Italy, Greece, France, Ukraine, Bosnia-Herzegovina, Romania, Hungary, Spain, Poland, Czechia, Bulgaria and Iran,
“I can proudly say that we can provide a service end to end with our own assets and systems. We never intended to own trucks until it became a necessity, the same can be told about railways; at the moment we are clients, being multimodal transport operator, but one we could also set up our own rail traction company, who knows. We had a meeting with our partner who spurred us to use railways; to go by rail it was not a choice, but rather an obligation dictated by the market demand”.
We are building the most modern ro-ro terminal in Turkey, the one in Yalova, to be open next; even though it is not our core business without that we could not manage traffic flows adequately”.
In a virtuous and dramatic growth trend ever since, Ekol has been able to multiply all its main financial figures and economic indexes, apart from one year of declining trend: “In 2009 we had a cash shortage” Musul admits to justify the -20% reported in turnover over previous year. For all left years since 2008, the growth year on year was double digit, with a peak of almost +40% in 2011.
One cannot imagine all such magnitude can be attributed to a one-man-show.
Are there any (hidden) partners? Who is financing the group’s development?
“We have an Abu Dhabi-based fund who has quite recently become a 37% shareholder, although their participation into our equity is not due to increase; on the contrary we are determined to buy back our own shares at the end of 2018. Then we will deliver 100% of our equity to a foundation which is to be based in the Netherlands, formed and acting under the Dutch law” Musul unveils.
Asked whether he can envisage any potential weakness in the castle he has been building, he tells that his only worry is to be able to always manage the business right: “the growth of the culture overall our group is important; we are now established in 15 countries and our 6,500 staff uses 4 different alphabets. If we can merge smoothly this melting pot, than we are successful”
The pace of development is very fast. “Slovenia is the latest country where we just opened a branch, the next future is for Croatia, Georgia, Azerbaijanm Slovakia; by 2019 we aim at having a flag in 45 countries, covering the whole Mediterranean and the Caspian” says Musul. “The next intriguing frontier of development in the Black Continent; however despite North Africa is relatively easy, to target countries such as Nigeria and Ethiopia is much more challenging”.
One feature always used by Ekol in its ‘colonization’ process is to respect the local content. “We never send people from Turkey to rule a country, hopefully we can find the right compatriot management”.
The growth rate is fixed in +50% target for 2017 in Europe; turnover last year was 670 million euro including ferries, and the goal is to become a billionaire (1,000,000,000 euro) within 2018.
“The ferry business has not great margins, last year we reported +8%, otherwise we would have achieved a double digit growth again. I can predict that until 2020 we are still learning and climbing the hill” Musul sincerely tells. “We have the biggest truck fleet in Europe, this year we will focus more in efficiency; artificial intelligence will be one of the key elements for our industry”.
“We need big volumes to grow and maybe more capacity” Musul admits.
In any case, it will be organic growth. “Buying companies? We are not like the Post, we do not like to acquire companies, rather we can merge with companies that we find are not able to grow on their own. Ekol is still a family structure, buying is like a dynamite”.
Lastly, the Turkish entrepreneur recognized the importance of their move into Italy. Last November Ekol announced to have become majority owner (65%) of EMT Europa Multipurpose Terminal, a terminal operator set up over Molo VI in 2011 by local freight forwarder Francesco Parisi, who is still 35% shareholder; it is from here that the TX Logistik block trains depart towards Kiel, one of the 46 intermodal regular service that the Turkish operator takes care of from Trieste (to Cologne, Kiel or Ludwigshafen in Germany, Ostrava in Czechia) and also between Paris and Sete in France.
With the new planned investments in Trieste, two ro-ro can be operated simultaneously, and intermodal train loading capacity will increase to 10 roundtrip services a day. Currently providing services to Turkish and Greek destinations, Ekol will add from Trieste countries such as Israel and Egypt to its portfolio in the coming years.
The annual capacity of 110,000 units carried by ro-ro and 70,000 units carried by trains in 2016 is expected to rise respectively to 140,000 units and 100,000 units by trains in 2017.
“Trieste port can be the best possible option for import from China, it is a crucial hub to serve eastern countries, the Italian port can be our ‘Piraeus’ in Europe” Musul nodded, referring to the widespread presence of Cosco in the Greek port.
Being the fourth market after Germany, France and Romania, in fact Italy is a vital location for Ekol, six years after starting operations in this country where it has 5 branches in Verona, Novara, Padua, Modena and Milan (only commercial office), with Ancona to be opened soon; the local 20 million turnover in 2016 against 17 million in 2015 is aimed to be to maintained in 2017 as a goal.
Now Ekol does both LCL and FCL shipments on its daily groupage service Italy-Turkey and has 12% market share on this route linking a few several sites in Turkey such as Izmir, Bursa, Adana, Ankara and many more.
“Of course there are still some hindrances to be removed first; for instance we cannot do an ideal shunting in the rail sidings, however we trust the port can improve its efficiency. My friend Zeno D’Agostino, president of Trieste Port Network Authority, promised me his commitment to sort it out. Also he brought me to visit the impressive Porto Vecchio, the neglected huge waterfront that has now been entrusted to the jurisdiction of Trieste Port Network Authority, which has to decide what is the best use for the sake of the local community. We know the port management is eager to allow some massive investments to revitalize this area, and this sounds quite interesting…” he concluded, thus not rejecting the speculation that Ekol could also set up a true logistics hub in this waterfront.
A clear Polish growth
Ekol Logistics opened a warehouse in Koninko (near Poznań), having entered the Polish market in May 2015. The new 2,100 sqm heated facility is a cross-dock warehouse used for international groupage transports located near the A2 motorway (East – West) and close to a railway terminal as it is a part of the company policy to offer a wide range of intermodal services.
In addition to Sosnowiec, this new warehouse close to Poznań, is Ekol’s second investment in a cross-dock in Poland. In 2017 the company will also open a warehouse in Wrocław. Ekol has 5 branches in Poland already in: Sosnowiec, Poznan, Wrocław, Łódź and Warsaw, and in next few weeks it will open also 6th in Tychy. In the country Ekol already employs 60 people and the estimated turnover for 2016 is 16 million euro.
Shipments sent from Turkey or Greece to Poland are transported by a ro-ro from Istanbul (with a stop in Lavrio, near Athens) to the port of Trieste. The next leg of the route is covered by train to Ostrava from where they are transported by road to Sosnowiec. Currently Ekol offers 8 regular weekly rail connections between Ostrava and Trieste.
A new fleet general manager come in
Ekol Logistics has named industry veteran as its Fleet General Manager Alper Bilgili who has been serving as Fleet Management General Manager at Mars Logistics since 2014 and as Deputy General Manager between 2005 and 2014. He previously worked as Operations Manager at Aras Cargo, and prior to that, as a Sales Specialist at Arkas Logistics after beginning his professional career at Omsan Logistics.
Bilgili has been recognized with numerous awards: IRU Award for Top Road Transport Manager in 2011, and the ATLAS Award for Road Transport Manager of the Year in 2013 and 2015.
