By HUSNIYE GUNGOR
The effects of the pandemic on consumer habits, particularly the rapid growth in e-commerce, has been more pronounced in Turkey than most other nations. In 2019, e-commerce volume came to TRY 8.5bn out of a total TRY 105.9bn of economic activity; in 2020 it was TRY 18.7bn out of TRY 104.1bn. The share of e-commerce in general trade also nearly doubled, increasing from 8.4% in the first six months of 2019 to 14.2% the first half of 2020.
Similar growth figures can also be seen in the logistics sector, which is directly linked to e-commerce, with the demand for fast and low-cost delivery of products. These ‘dark heroes’, those invisible operations in the background that make this operation possible for the e-commerce ‘stars’, are also taking their share from this growth. Dincer Lojistik, for instance, has made nearly 50% of its turnover from logistics operations in e-commerce over the last five years, according to Mustafa Dincer, Dincer Lojistik CEO. Backed by this wave of e-commerce, the company has also taken steps towards offering international logistics services as of this year. “All procedures are ready and the contracts have been signed,” Dincer says.
“Companies with good analytical capabilities who are aware of the direct effects of this growing e-commerce volume on logistics tend to position themselves correctly by investing in e-commerce and smart logistics,” Dincer says, adding that the market shares of companies that structure themselves well are gradually increasing.
A natural shift to e-commerce logistics
For the last 17 years, Dincer Lojistik has been offering integrated logistics services in many areas, from collecting products from different suppliers, quality control, collection and packaging services, product segmentation, ABC analysis and process management with KPIs, transportation between dealers and warehouses to delivery to the end user.
With that experience, the company is well-positioned to be one of the leading companies in e-commerce logistics with its integrated structure in the digitalizing world. As digitalization has become vital for many sectors during the pandemic, Dincer Lojistik has focused more on projects to provide logistics services through digital platforms in line with consumer trends. “Projects developed by our R&D team in the field of process improvement and software were among the main issues we focused on during the year,” says Dincer.
The GoAgro aggregation and data matrix software, developed Dincer Lojistik’s R&D center for which the company allocated TRY 15m, is one of the best examples of its digital investments. This software was specifically configured for the pesticide industry but led to way for the company to create many innovative solutions with the principle of moving the speed of B2C into B2B in logistics and storage areas with their expert team of 50 people in the R&D center. “We continue our leadership in the industry with more than 100 innovative ventures that shed light on the future, such as GoAgro Vas, GoAgro WMS, GoAgro TMS, GoHappyCustomer, GoChemWMS, and Dark Store,” Dincer says.
Dincer Lojistik has transformed many areas as well as its service quality into a structure that can be monitored and audited instantly and transparently in almost every operation. In addition, the company started to configure its regional repositories to support micro storage spaces called ‘Dark Store.’ Dincer thinks that Dark Stores, which are micro warehouses, are extremely innovative and important for the industry with the speed they bring to sales and delivery management. “In addition,” Dincer tells, “We are expanding our distribution network by commissioning our new transfer centers and regional warehouses with an investment of TRY 100m.”
This will enable the company to increase the rate of the distribution of the transported tonnage with its own payroll personnel and vehicle fleet to 100% from 97% by the end of the year. Speaking of personnel, Dincer Lojistik is a “big family,” as Dincer puts it, with 1,000 employees at storage services in 35 locations in 17 provinces as well its complete and partial distribution services network spread over 81 provinces and 973 districts.
Dincer Lojistik has achieved a combined growth of over 88% in the last three years. “2020 has been a year of many successes despite the pandemic conditions,” Dincer says, adding that the company closed the year with 65% growth, including the TRY 60m investments the company made. The goal now is to increase e-commerce’s 50% stake in Dincer Lojistik’s turnover to 65% by year-end, Dincer says.
The company has set its investment budget for this year as TRY 100m. In terms of inorganic growth, Dincer says that they have a team that monitors logistics startups globally. “We follow and analyze issues like partnership opportunities, strategies, equipment and projects in the world in detail with this team,” adding that they have made two strategic investments in Turkey in this context so far and are looking at investment opportunities abroad.
Keeping the details under his hat, Dincer admits that the company has already taken the first steps toward offering international logistics services as of this year. “All procedures are ready and the contracts have been signed” for two expansions, he says, one of which is international airline logistics. The other global expansion of this ‘Dark Hero’ will be delivering logistics to Dark Stores and central warehouses that Dincer Lojistik will launch in four cities in Europe, including Berlin, Paris, Amsterdam and London.
Road and rail benefit from e-commerce
With the quarantine and restrictions during the pandemic changing the purchasing behavior of consumers, the basic needs category has become an e-commerce leader. Therefore, the share of road logistics services for the market sector has increased. The amount of daily domestic cargo carried in the country has reached 2 million tonnes, 89 percent of which is transported by road, 5 percent by rail and 6 percent by sea. The area with the highest growth potential after the highway is railway transportation, according to Dincer.
Increasing freight prices are biggest challenge: Dincer
“The biggest disadvantage of logistics companies like us, which provide contract logistics services, is that they have to meet increasing freight prices in the market without passing those costs onto customers. Freight prices, which have increased since the beginning of 2020, are reaching very high levels when considered together with inflation rates. We expect an extraordinary situation like a pandemic to permanently change the dynamics of the industry. The pandemic period has tested us on issues such as being prepared for crisis, innovation, and developing alternative service areas. In the upcoming period, we will see that companies that adapt to the requirements of the new age will survive. At this point, agility, ability to use technology, advanced technological infrastructure and having competent employees in their field will be extremely important for every company. The logistics industry needs to respond very quickly to changing needs, especially with e-commerce. In this direction, our country’s increasing market share at the global level depends only on our companies rebuilding themselves through these changing dynamics.”
Gives recycling logistics services
>> Dincer Lojistik is committed to being a responsible company for the globe through reliable and sustainable principles. The company offers its recycling and waste management services economically, safely, without harming human health and with minimal negative impact on the environment, according to Mustafa Dincer, Dincer Lojistik CEO. “Our company, which is present in all areas of the production process, from raw material supply to the delivery of products to the end user, stands by its customers in recycling logistics services,” he says.
>> In this context, the company collects damaged, defective, end-of-life or excess stock products from dealers and delivers them to factories and warehouses in every point of Turkey for repair, maintenance, separation or disposal purposes in compliance with legal transit durations. “We offer this service, which requires great planning, in a fast and reliable manner with minimum costs within our strong administrative structure,” Dincer notes.
>> By taking an active role in the disposal of hazardous wastes, the company also offers waste management services at high quality standards. “Within the scope of the Regulation on the Control of Hazardous Wastes, we ensure that products that are damaged during operational processes or should to be disposed of in accordance with the demands of customers are transported to contracted suppliers in accordance with the provisions of the Law on the Transport of Hazardous Substances by Road, and disposed of at recycling and disposal facilities.”
>> The company also supports environmental studies and Turkey’s leading NGOs such as the Clean Seas Association (Turmepa) and Turkey Foundation for Combating Soil Erosion, Reforestation and the Protection of Natural Resources (TEMA)