Press about Us

Champions of Pomerania
Puls Biznesu, 20th March, 2008.

(summary of presentation ceremony of 2007 Business Gazelle diplomas and statuettes in Pomerania)

Representatives of 262 most dynamic enterprises of Pomerania region joined the meeting at the Baltic Opera House in Gdańsk. All of them being regional laureates of Business Gazelle prize gathered not only to receive souvenir diplomas and statuettes. At the discussion focused on financial sources of business activity the businessmen paid special attention to problems they faced while applying for EU subsidies.

(...) Rafał Olszewski of PKS Gdańsk-Oliwa SA pointed the excess of bureaucracy in reference to preparation and examination of EU funds applications. According to his opinion our government officials expect of Polish entrepreneurs more than Brussels would require.

(...) The event in Gdańsk was organised under the patronage of the Pomeranian Voivodship Vice Governor, Mr Michał Owczarczak, Marshal of Pomeranian Voivodeship, Mr Jan Kozłowski and the Mayor of Gdańsk, Mr Paweł Adamowicz.

The idea is simple but still catching - twice per year PKS Gdansk-Oliwa organize meetings at the "Orle" Hotel - Conference Centre in Gdansk-Sobieszewo - once for the suppliers and once for the customers. Between 21st and 22nd April the other one took place and - as usual - it was associated with the conference upon the "Evolution of Road Transport Market in Poland After Access To EU". About 110 representatives of more than 50 companies participated in the conference (Mr Krystian Klein, President of Gdansk Container Terminal was one of them).

Mr Rafal Olszewski, president of PKS Gdansk-Oliwa started the event and Mr Szemiako, the vice-president was chairing the whole conference. Speakers were carefully selected; the first one was Mr Tomasz M. Zielinski, president of ABC Ltd from Poznan, who disclosed the truth about profits by presenting ABC/M system (Activity Based Costing/Management) as a map of cost and profitability of the company being a contemporary managing tool. The speaker - also being a lecturer at Economic Academy in Poznan and at Logistics College in the same city - presented among others so-called 'whale curves' of the customers' and products' profitability. Except for the curves there were many elements of his speech which seemed to be too complicated for such assembly.

Secondly Mr Ernest Czermanski of the University of Gdansk presented in a clear and systematic way the meaning of road transport in EU transport policy against development of the transport system.

Next was professor Zdzislaw Kordel (University of Gdansk) who had an interesting speech about "The Role of Road Transport in Supply Chain" . The conference part was concluded by professor Wlodzimierz Rydzkowski who was speaking in a humorous and sprited manner about the "Evolution of Road Transport Market After Poland's Access To EU". Despite the speakers differed in terminology they used - heavy duty transport or road transport - they were absolutely unanimous at one point , i.e. good long term prospects for development of that branch of transport.

Demand for international and domestic logistic services is continuously growing in pace with the economic growth of our country. Polish transport companies have to face strong foreign competitors. Research has shown that one of the crucial success factors for development of transport, forwarding and logistic companies is the level of customer satisfaction. It would be extremely difficult to make up for lagging behind, to meet customers' demands and beat the competition without advanced IT solutions enhancing immediate exchange of information. Capital investments in IT and telecommunications in Poland are almost four times lower than the EU average. Polish companies however are doing their best to catch up with their Western competitors, the best example of which are investments of PKS Gdańsk-Oliwa.

The state-of-the-art solutions in transport, forwarding and logistic were discussed by participants of the conference "Development Trends in Logistics" organised on 22 April by PKS Gdańsk-Oliwa. Participating in the conference were delegates from almost 40 Polish and foreign companies as well as scientists from the Warsaw School of Economics and the University of Gdansk.

Prof. Halina Brdulak from the Warsaw School of Economics during her conference presentation on development trends in logistics highlighted that in spite of decreasing global economic growth in the last 15 years, decreasing trade was noted only in 2001. We are seeing growing demand for transport services. International competition in any sector, including in transport, requires a very short response time for new customers' needs from the market players. Reliability and on-time deliveries may be more important than the price. The knowledge of customers' needs comes from good access to complex information. The fight for customers requires the application of logistic chain methods, which will ensure that the customer receives the cargo in line with the specification at the time and place as ordered, and the service will be smoothly settled afterwards. If it is what is required from the supplier, the requirements are even higher for the actors in the logistic chain and external partners taking part in the delivery process.

The right response time for today's quickly changing customer needs may be taken care of only by an electronic platform for information exchange. To that extent, there is still much room for improvement in Poland, because in spite of systematic growth of the IT market, Poland is lagging behind other EU countries as far as IT saturation is concerned. Capital investments in IT & telecommunication per capita are almost four times lower than the EU average (in 2005 it was 374 euro in Poland and 1,376 euro in the EU).

Backlogs which limit creating advanced logistic systems and combined with weak communication infrastructure give decreasing competitiveness of Poland, as the place for huge foreign investments which put a lot of emphasis on well operating transport of the components and dispatch of ready products.

The research results presented by Prof. Halina Brdulak show very clearly that implementation of IT tools in the delivery chain has after three years brought a 1-5% cost reduction for 31% of the researched companies, a 6-10% cost reduction for 36% of the researched companies and over 11% cost reduction declared by 14% of the companies. A growth of income was in the same period noted by 61% companies.

What is the reaction of the Polish companies? - We are taking up the challenge - declares Rafał Olszewski, CEO of PKS Gdańsk-Oliwa. - We are trying not to stay behind our competitors in implementation of new technologies improving our operations and customer service. Already this year we are going to implement the vehicle monitoring system in real time with the GPS . It will help us to follow up what is going with the vehicle and the cargo. The next huge and quite complex investment project is to have an advanced Contact Centre. The project received support from the EU and will be co-financed from one of its programmes.
For the new investment projects, PKS Gdańsk-Oliwa also takes into consideration the consultations with customers for their requirements in the future.
- We make surveys, use a very precise claim analysis system, and we are open to remarks and suggestions from our partners - adds Rafał Olszewski. - With this type of proceeding we have more assurance that the new project is going to be successful and the money invested will bring back measurable benefits to the company.
The value of new investment projects in PKS Gdańsk-Oliwa will exceed PLN 5.5 M only this year.

An interesting example of an organisation operating at many levels, presented by Sławomir Grabowski from the University of Gdansk during the conference organised by PKS Gdańsk-Oliwa przez, was the Swiss MIGROS network - the biggest retailer and employer on the Swiss market. The company's experience from the last 15 years shows technological aspects are not any more crucial effectiveness factors for the company which focuses on a well functioning delivery chain. In spite of positive experience from new transport and reloading technologies (bi-modal transport linking carriage of container platform trailers on railroad car, self-reloading container platform trailer or the new container types) the group decided against broad implementation and did not follow up pilot projects. Full, comprehensive computerisation based on the SAP platform of all participants in the logistic chain gave much more impressive financial results. In spite of the huge costs (ca one billion CHF in the period 1998-2005), the project resulted in growth of the company's turnover by three per cent, and storage and capital costs were reduced. The annual cost reduction and additional income after 2006 will amount to CHF 200 M.

There used to be over 40 state-owned transport enterprises operating in the PKS group, but only a few survived the transformation period in the Polish economy. PKS Gdańsk-Oliwa is one of the survivors and at present one of the most dynamic carriers in the Pomeranian region.
- When I came to lead the company in 1993 it was on the verge of bankruptcy. Its assets consisted of squalid workshops and yards, an outdated, failing vehicle park, and mainly worn-out Jelcz and Liaz trucks - remembers Rafał Olszewski, the CEO of PKS Gdańsk-Oliwa.

The new CEO started restructuring of the company. He reduced employment and seized a new opportunity: cargo transport from Poland to Russia and the Commonwealth of Independent States. - In the mid 1990s there were not too many domestic carriers who hade the courage to carry cargo in this destination. We took the challenge and after a while the decision proved to have been more than economically correct. On top of it we earned a good reputation. Our trucks brought humanitarian aid to people covered by the Chechnya war on the initiative of Janina Ochojska and her Polish Humanitarian Action. Together with the Caritas we were carrying aid cargo to Sarajevo - says Rafał Olszewski.

In 1995 the company was privatised. We managed to develop its plots. We decided to rent out extra space to a hypermarket with construction materials in an upgraded office building from the 1960s located in a very attractive location by Kolobrzeska Street in the city centre. The trailers moved from the city centre to the new facility by national road # 7 and close to the Lotos Group Refinery, one of our most important customers.

Before coming to work in PKS Gdańsk-Oliwa, Rafał Olszewski had worked in the construction sector as a team manager for works at heights. - I had no experience in the transport sector and that might have been the reason why I took a different perspective from other managers in transport companies who were used to operating in the limited scope of a centrally planned economy. It might have also been one of the reasons why my company not only survived but could also develop successfully - thinks the CEO.

Cash from sales and rent of real estate financed mainly new investment projects. Jelcz and Liaz vehicles were replaced by far more advanced trailers and trucks of mainly DAF which on average are 3.5 years old. - Only last year we purchased twenty new truck-and-trailer sets. The driving force of the constant renewal of the vehicle park is our competitors and customers who define very clearly technical requirements which our vehicles have to meet - explains Rafał Olszewski.

Growth of the carried transports and vehicle park is reflected in growth of employment. At the beginning of the 1990s there were almost 200 people working in the company, while after the restructuring only 70 remained, and the present employment level is 171. - Our employees are the company's greatest asset because only with their skills can the transport safely get to the point of destination in a timely manner - underlines Olszewski.

We try to do our best to motivate our personnel by nominating a Driver of the Year who, as Jerzy Walaszkowski this year - receives a diploma and financial reward. The CEO expects a lot from his people, but he expects equally much from himself.
- Managing a transport company operating internationally cannot possibly be done within the 8-hour working time. It has its impact on family life and public activity. As a result I withdrew from politics, confesses Rafał Olszewski.

The last year has been unique for PKS Gdańsk-Oliwa. Now that Poland has joined the European Union, the company is able to cross country borders more quickly and to compete in the EU market. At present, the majority of our revenues come from transport on routes from Poland to Germany, the Netherlands, Sweden and United Kingdom.

This year we have been affected by certain issues which have had an impact on the entire road transport sector in Poland: strong Polish currency, growing fuel prices, introduction of fees for motorways in Germany, growing remuneration levels for drivers, and decreasing freight prices resulting from growing domestic competition. The list might be even longer and there are many other factors which have to be considered when we decide to carry out transport. - In the transport business not only price and distance of the transported cargo count but also how much it costs to get to the loading place and what the options are for the return cargo. Taking into account all of this we may decide whether the transport will bring a profit or not - explains Olszewski.

40 per cent of the company's revenues come from transport services. The company's business is also forwarding and booking of cargo space on ferries operating on the Baltic Sea, the North Sea and English Channel. Constant changes in the transport market make us look at new business opportunities and niches to generate more revenues. - We intend to invest in tourism. The number of Polish and foreign tourists coming for their vacation to the Pomeranian region is growing, so in 2006 we decided to upgrade our holiday resort in the Kashubian Lake District and our plan is to rent out cabins - announces Rafał Olszewski.
The company will not cease to invest in its core business. This year they want to replace at least 10% of vehicles and implement IT solutions which will improve contacts with customers and furthermore management of their vehicle park.

Polish road transport is changing for the better, which tells well about its managers. The first signs of the positive transformation could be observed even before Poland joined the European Union, and after joining the EU it has been getting only better and better. New transport companies are popping up with advanced, multi-axle vehicles replacing old, plain Jelcz make vehicles.

Polish roads have filled with state-of-the art Man, Scania, International, Mack, Peugeot, etc. Surprisingly, all of them belong to Polish companies which not so long ago could not afford to buy motorway vignettes, not to mention to pay taxes on time. A miracle? Not necessarily...

It is common knowledge that in the newly established transport companies most stockholders are so-called external stockholders, i.e. EU transport companies. Clearly they have supported their companies with advanced transportation means which the Polish transport community could not so long ago only dream about. No wonder - means of transportation, the basic tool for the transport companies, started to generate immediate profits, without much extra effort or costs due to marketing, business registration, acquiring cargos, etc. Everything was there. If we add to this the satisfaction of the Polish companies and new jobs the picture becomes very optimistic. Unfortunately, there are also some disadvantages...

The supply of transportation services grew dramatically, which had a negative impact on the freight price. It turned out that unlike in the rest of the economy, growing competition resulted in a decrease of prices in the transport sector, and sometimes the development was very dramatic. Some transport experts claim that the Polish market is now too small for the massive growth of the road transport which in many cases has problems to acquire cargoes. There remained only one way out - to sell transportation services abroad.

PPT PKS Gdańsk-Oliwa S.A., after many stormy years, is now a joint stock company with 80% stocks held by its 60 employees. The remaining 20% belong to external stockholders. The company employs many drivers trained in its own training facility.

Rafał Olszewski, the CEO, assures that the company is now developing in a very dynamic way with huge increase of its turnover compared to 2003. - During eight months of 2004 we generated profit volume equal to the annual profit for 2003 - he explains. He adds that the positive effects were achieved only with good cooperation with a huge group of carriers. The business is now positively developing in the EU. However, with every new month we notice the impact of fierce competition which is then translated into lower profitability from the carriage business.

Beside carriage of cargo, PKS is strengthening its position in booking of cargo slots on ferries operating between France and the UK. - We have one of the best ferry services, open 7 days a week. We are doing it for our customers who book vehicles from the UK to France, and we also book space for the return trip, in close co-operation with a few ship owners. This business is developing very dynamically - says the CEO. He adds that his company, in contrast to others, puts focus on turnover. - The profit per unit is relatively small but with huge volumes we can easily make it up. It also makes us more competitive than the others - assures Rafał Olszewski. He adds that he most often sells the slots to Polish transport companies operating on the other side of the English Channel.

In 2004 the transport fleet of the company increased by almost 20 per cent. The company is operating on 70 truck-and-trailer sets. The oldest vehicles come from 1995 but half of the fleet was purchased in the last three years.

The CEO claims that the customer expects two things: high quality service and low price. The company has to be very careful about its costs and take a continuous quality approach.

As for the future: - I hope we will survive the most difficult time after joining the EU when competition in the transportation market has dramatically increased. We should make it - provided Polish government doesn't make our life more difficult by constantly modernising the tax system and by imposing laws that generate costs for business we should make it - assures the CEO.

PHe underlines that introduction of fees on German motorways will make the company cut its other costs but it can never have a negative impact on transport service quality.