New country units in the Balkans

The Militzer & Münch Group has established two new country units in Bosnia and Herzegovina, as well as in Montenegro. With their focus on logistics services and road transports, the newly founded companies reinforce the Militzer & Münch network in the Balkan region.

In late August, the two Militzer & Münch subsidiaries in Bosnia and Herzegovina and in Montenegro started operations. They are located in the capitals of the two countries – in Sarajevo and Podgorica. „Many of the customers we work with in Serbia are also active in the other markets in the region; for the most part, these customers come from the fashion and textiles, automotive and chemical sectors. Therefore, the two new country units will mainly transport goods for companies from these industries”, says Nikola Vasiljevic, Managing Director of the two country units and Executive Director at Militzer & Münch Serbia. The new companies offer the full range of the Militzer & Münch services. A special focus is on organizing FTL and LTL road transports, as well as on customs clearance.

In the Balkan region, Militzer & Münch also has units in Greece, Bulgaria, and Romania, where the group already offers comprehensive logistics services. „We founded the new country organizations at a time when other companies were rather reluctant to do so,” says Alexei Kovalenko, Chief Financial Officer TransInvest and Militzer & Münch, and Speaker of the Militzer & Münch Group Management. „This step gives good proof of the initiative, energy and entrepreneurial spirit of our colleagues at Militzer & Münch Serbia.”

“We Are the Experts for Difficult Markets”

The Militzer & Münch Group aims to continue on its growth path in the coming years.  In an interview, Alexei Kovalenko, member of the Militzer & Münch Group Management, explains where the biggest growth potential lies. 

How would you describe Militzer & Münch in a few words?

Alexei Kovalenko: With a great deal of pioneering spirit, a small forwarding company, founded 140 years ago, was turned by the founders and their successors into an international logistics services provider that has become an expert especially in niche markets. Still family-owned and independent, we want to live this entrepreneurship also in future and open up further difficult markets for our customers. While, of course, bearing in mind trends and changes owed to political and economic developments, we at the same time bank on traditional values such as loyalty, integrity, and respect.

What are the strengths of Militzer & Münch?

Alexei Kovalenko: For a long time already, we have been regarded as one of the leading logistics services providers in Eurasia and North Africa. This geographic view, however, sells us short: We are the specialists for difficult markets, we create individual transport solutions for our customers also under difficult conditions.

What distinguishes Militzer & Münch from its competitors?

Alexei Kovalenko: In some respect we are indeed practically unique: unlike our competitors, we operate our own country units with local management in difficult markets, for instance in Central Asia. Often, our international competitors only send ex-pats abroad, and the local competition lacks the international knowhow. Thus, to some extent, our local expertise combined with international standards makes us unique in the logistics sector.

Which markets and regions do you regard as promising?

Alexei Kovalenko: For us as a flexible medium size enterprise, both the classic trade lanes like Europe-Maghreb and China-Europe as well as the emerging markets are promising. We recently started an initiative to extend our activities to include African countries. In North Africa, we have our own country units, some of them for decades – but we are seeing that Ethiopia, for instance, is a promising logistics market, too. Over the next few months, we will analyze markets in Africa and examine the market situation and demand on the side of existing and potential new customers.

Another example is Southeastern Europe. We have achieved a strong market position in Bulgaria, but not in the neighboring countries. In 2019, we had the opportunity to enter into a joint venture with Invictus, a logistics company in Serbia, and business is developing well.  We want to continue on our expansion course also in other countries of the region.

In which business sector – road transport, airfreight, sea freight, project logistics – do you see the biggest growth potential?

Alexei Kovalenko: We can’t generalize and limit this to one segment. Our maxim is, it must be worth it. We don’t aim for growth at any price, for we offer quality service; a fair margin for high-quality performance must be possible. We regularly check our activities: which of them are profitable, which aren’t? The strengths and weaknesses of the individual Militzer & Münch companies – we operate local units from Morocco to China – have to be taken into account. Thus, on some trade lanes and for some services, we cooperate with selected external partners, which allows us to remain efficient and profitable.

Especially on the China-Europe trade lane, we are aiming to further develop intercontinental overland transportation, i.e. rail freight. More and more, sustainability and economic pressure are inducing importers and exporters alike to opt for the train instead of the plane. With transit times of ten or fewer days on this route, rail freight might become interesting also for the e-commerce sector. We keep an eye also on further developments in the Belt-and-Road Initiative – over the next years, there will be big opportunities for our customers, and thus for us, too.

Today, all eyes are on China for other reasons. From China, the corona virus has spread worldwide and especially in Europe. The current situation is an extraordinarily challenging one for each of us personally and for our economy. It is sincerely to be hoped that the spread of the corona virus can be slowed down by the numerous measures taken and that the global economy will soon recover.

The focus is on customer satisfaction. What distinguishes Militzer & Münch in this respect?

Alexei Kovalenko: Our customers rely on our meeting their often challenging requirements: products with complicated handling, not-so-everyday destinations. Therefore, we bank on competence on developing our specialists, and on local market expertise. Our customers don’t contact the company headquarters, but our local branch offices. They want to work with one defined contact person who manages their project from beginning to end, who keeps abreast of matters and takes responsibility. We are therefore also keen on enhancing the knowhow of our teams; the relaunch of the M&M Talent Management Program ensures the competence of our junior executives. We support the expertise of our teams with our robust and flexibly adaptable IT processes. Our in-house IT company for instance designs individual tracking and tracing solutions for our customers.

“Unlike our competitors, we operate our own country units with local management in difficult markets, for instance in Central Asia.”

Alexei Kovalenko
Member of the Militzer & Münch Group Management

Could Militzer & Münch intensify the cooperation between the individual country units and increase growth that way?

Alexei Kovalenko: Our country units generate their business locally and “live” from their local customer base. At the same time, they can benefit from the strengths of other Militzer & Münch companies, without being forced to cooperate, on the basis of the “right of first refusal” principle. There are cases in the Group where this works well.

At this time, the Militzer & Münch Group is led by Group Management. What are the plans for the coming months?

Alexei Kovalenko: The Militzer & Münch Group is run on a decentralized basis – this has developed over time and is part of the corporate culture. The operational responsibility for results and success lies with the country units and the regional managers, who together form Group Management, i.e. the extended management of the group; together with the Board of Directors they lead the Militzer & Münch Group. In charge of coordination and alignment between the regions is the Speaker of Group Management. (Editor’s note: at the beginning of the year, this task was assigned to Alexei Kovalenko.)

Topics concerning the entire Group such as business development and digitization regularly feature on the agenda of the joint meetings of Board of Directors and Group Management.

This modus operandi has proved successful over the past few months – and we will continue working that way also in the coming months.

Militzer & Münch customs agency in France

For companies, international trade comes with a number of challenges – one of them is customs management. In order to further simplify the processes for its customers, Militzer & Münch France has established its own customs agency, including an IT module specifically developed for this purpose. 

Since January 1, 2018, the new customs agency of Militzer & Münch France has been filing the customs declarations of all ten Militzer & Münch France locations. The customs agency operates with declarants in six branch offices in Lille, Saint-Thibault-des-Vignes (Paris), Marseille, Lyon, Nantes and Bordeaux. Three of them are regional declaration centers: Lille, Marseille and Nantes. The teams have in-depth country-specific knowhow. They are specialists in customs management: be it the customs clearance procedure, customs regulations or the payment of fees and taxes. Each M&M branch reports its demand for customs declaration to its regional declaration center via an IT module that was specifically developed.

Militzer & Münch France does export as well as import customs clearance. “We offer our customers consultancy from A to Z”, says Régis Samain, Manager of Lille’s regional declaration center  and Head of the Customs Agency at Militzer & Münch France. “Our teams are always up to date with the latest developments concerning currently valid customs agreements and regulations as well as the certificates required.”

One customs agency, three regional declaration centers

The headquarters of the customs agency is at the Militzer & Münch Lille (Halluin) office.

  • Lille: In cooperation with the declarants at Saint-Thibault-des-Vignes (Paris) and Lyon, the regional declarations center Lille does the customs clearance for Militzer & Münch Lille, Paris, Roissy and Lyon.
  • Marseille: The Marseille team is exclusively in charge of the customs declarations of Militzer & Münch Marseille.
  • Nantes: The declarants from Nantes and Bordeaux work together with the regional declaration center Nantes – they are responsible for customs clearance of the Militzer & Münch branch offices in Nantes, Bordeaux, Mulhouse and, in part, also Lyon.

To the Maghreb and back

Militzer & Münch France has entered into a partnership with Davies Turner, a leading forwarder in the United Kingdom. The objective: developing the traffics between the United Kingdom and the Maghreb states. 

The collaboration started in early October. In cooperation, both companies offer groupage transports as well as full truck load traffics. Militzer & Münch France handles imports and exports between the UK, Morocco and Tunisia as part of the partnership. The Algeria transports handled are mostly exports.

The advantage of the cooperation: Militzer & Münch can offer its customers additional transport capacities from and to the United Kingdom, while Davies Turner can further develop its access to the Tunisian and Algerian markets. Davies Turner already operates successfully in the textile sector in Morocco, but will nevertheless profit from the Militzer & Münch expertise in coordinating industrial goods flows via Militzer & Münch Morocco. Finally, Militzer & Münch Morocco facilities in Casablanca and Tangier may offer its clients customs clearance solutions in private bonded warehouses.

New subsidiary in Algeria

Logistics business with Morocco and Tunisia has been successful for years. Militzer & Münch France in particular is the leading forwarder to and from the Maghreb countries, relying on its close cooperation with the well established Militzer & Münch Morocco and Militzer & Münch Tunisia teams. Algeria transports have also continually been on the rise. This is why Militzer & Münch decided to open a subsidiary in Algiers, the capital of Algeria. 

For the new country unit, Militzer & Münch cooperates with a renowned shareholder active in international transportation. “For us as a specialist in Maghreb traffics it was only a matter of time before we founded our own subsidiary in Algeria”, says Dr. Lothar Thoma, CEO M&M Militzer & Münch International Holding AG. “With our long-time organizations in Morocco and Tunisia and now with the new setup in Algeria, we are going to consistently develop our Maghreb activities. Our clearly defined objective is to even better tailor our services to this special and challenging market.”

For Algeria, Morocco and Tunisia, Militzer & Münch offers services that go far beyond mere transportation. Thus, the Maghreb solutions comprise, among others, weekly groupage transports of hazardous goods, packaging and quality control, labeling and order picking as well as container stowing at the company-owned 5,000 square meter logistics terminal with 17 loading docks in Vitrolles, France.

The Algerian market

Algeria, the largest of the Maghreb states, has approximately 41 million inhabitants. The People’s Democratic Republic of Algeria is rich in resources – currently, oil and gas exports account for 60 percent of the state revenue. With 85 percent of the goods flows being imports, the market is characterized by an export-import imbalance. Contrary to other Maghreb countries, there is not much relocation of production.

In order to reduce the dependency on the oil and gas sector with its drastic decline in prices, the government aims at enforcing economic diversification. It opens up the country for export; the mining of iron ore and phosphates is to be increased while at the same time, industrial production is to go up, too. Country-wide, industrial cluster zones are being established. All this will benefit the transportation industry and, in the long run, balance the volumes of Europe-Algeria and Algeria-Europe transports.

Regular traffics to the Maghreb

Cooperating and pooling of forces: On May 1, the Militzer & Münch Group and Andreas Schmid Logistik AG started their joint venture “MMAS Eurasia Logistic GmbH” (MMAS Eurasia). The joint venture offers regular traffics to the Maghreb countries and Turkey.  

The joint venture is headquartered at Gersthofen in the Bavarian Augsburg administrative district, about 80 kilometers to the North West of Munich. Andreas Schmid operates three branch offices in Bavaria and Baden-Wurttemberg, and is the regional market leader for domestic truck transports with an area-wide transportation network in Southern Germany.  

“With the supplementary capacities offered by the joint venture, we can further develop our international door-to-door services”, says Dr. Lothar Thoma, CEO M&M Militzer & Münch International Holding AG. “Especially in the economically thriving South of Germany, we register high demand for international transports. In Andreas Schmid, we have a reliable and potent partner to meet this demand.” Since the beginning of May, MMAS Eurasia has been handling several departures per week from Gersthofen to Morocco, Tunisia, Algeria and Turkey.

A win-win situation  

To Militzer & Münch, the joint venture offers extra transport capacities. Andreas Schmid profits from the well-founded know-how and the outstanding international transportation network of the Militzer & Münch Group. “Owing to the dense local networks of the Militzer & Münch Group, we can offer our customers excellent service in Turkey and the Maghreb states”, says Gianluca Crestani, Member of the Board, Andreas Schmid Logistik. “The Maghreb states hold great perspectives for German enterprises that we can additionally support with perfect local logistics.”

Marked increase in Maghreb transports

There are excellent perspectives in the Maghreb states: Morocco, Tunisia and Algeria are offering numerous chances for German companies. The Maghreb region is an important trade partner especially for the automotive and textile industries. Militzer & Münch is experiencing a sharp increase in transports to this region. The Militzer & Münch Group’s truck traffics between Germany and Morocco for example doubled in the last two years, traffics from and to Tunisia even rose three-fold.

Transit country Turkey

As a transit country between Europe and Asia, Turkey plays an important role for international logistics. “The Turkish government’s investments in the country’s infrastructure are further pushing the demand for transports”, Dr. Lothar Thoma says. In Turkey, the Militzer & Münch Group operates four locations, among others in Istanbul and Izmir.

Additional destinations

With the joint venture, Militzer & Münch and Andreas Schmid add numerous additional destinations to their regular truck traffic network. The joint venture moreover complements the long-standing collaboration of Militzer & Münch with the groupage cooperation CargoLine. Militzer & Münch uses the CargoLine network mainly for international transports to and from Germany and Western Europe.