Digitalization of business processes, focus on improving working conditions, acquisition of new companies and trucks increased cargoGO‘s turnover by 61% in 2021 – up to EUR 78 million. During the year, the fleet of trucks in the group’s companies grew by 65 per cent – from EUR 340 to 560 million.
“This growth was driven by rapid, bold decisions and years of experience, thanks to which the management team could identify the key criteria for success, and to continuously monitor and improve these. Attracting new clients and winning lucrative contracts has also contributed to our rapid growth, as the quality of our service has exceeded our client expectations, presenting opportunities for us to establish ourselves in the market and to operate profitably. In 2021, the digitalisation of business processes, both for the administrative staff and for drivers, took momentum. The launch of a transport base in Poland has led to a substantial improvement in working conditions for drivers, with half the time spent commuting between their homes in Western Europe and the rest of the world. In the second half of 2021, we also acquired a logistics company that managed a fleet of 50 trucks, increased our employee count by 50%, and added to our ranks both experienced and young professionals, who were quickly and successfully trained,” says Osvaldas Švitra, managing director of UAB cargoGO Logistics.
According to him, the strengthening of the freight forwarding department has enabled the hundreds of trucks acquired to be quickly put to work; the digitalisation has reduced the amount of time spent on technical work for both drivers and administrative staff, and experienced specialists have assisted in route optimisation and reduction of the number of unladen kilometres travelled by trucks. With the introduction of digitised business and personnel management processes, truck drivers working at cargoGO get all the documentation on their tablets, all the data automatically reaches the necessary employees eliminating the need to manually enter these multiple times into digital platforms. It is estimated that digitisation will have enhanced productivity by more than 25% in 2021.
“Our mission is to make life simpler for our customers, our partners and ourselves, and digitalisation is a great for us to do this. We are optimising many processes, moving these to digital platforms, and using artificial intelligence for data analysis, which we believe will play an even more important role in the future, and all our employees will have to do is to keep everything running smoothly and increasing the volume of digitalisation in their daily work. In this approach, we create excellent opportunities for administrative staff to improve, acquire new competences, implement new ideas, contribute to projects throughout the organisation, while the drivers are free to focus on their core task – driving and delivering goods to customers on time. By the way, it is the complex of measures to improve the work of drivers and the high internal culture of the organisation that has ensured we have sufficient numbers of them. As many as 75% of new drivers are recruited based on recommendations from existing employees. cargoGO group has a particularly low staff turnover rate of less than 5% compared to other logistics companies,” says O. Švitra. “The decisions we have taken and implemented promptly have enhanced the quality of our services, lowered operating costs and offer more competitive prices to our customers, which has also led to a steady increase in the number of customers and their recommendations.”
Funding for expansion – from truck manufacturers
The increase of the fleet has been considerably affected by new financing alternatives provided by foreign financial institutions, according to Kęstutis Samajauskas, financial director of cargoGO Group. In 2021, the logistics group received financing for more than half of its fleet from the truck manufacturers.
“The high rise in the cost of fuel in 2021 was also a serious challenge for the logistics companies. We managed to keep costs under control and maintain competitive service prices thanks to good relations with fuel suppliers, professional route planning and continuous communication between employees, partners and customers throughout the organisation,” says K. Samajauskas.
The decision of the previous year to categorise all customers according to certain criteria in order to avoid insolvency and to work with the most risky customers in a way that prevents overdue debts has helped to increase turnover, shorten payment terms and avoid insolvent customers.
The growth of cargoGO has also been driven by the expansion of the customer base, the winning of large-scale tenders and the conclusion of annual contracts with long-standing customers.