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“We Are the Experts for Difficult Markets”

An interview with Alexei Kovalenko, CFO TransInvest Holding AG, on the future of the Militzer & Münch Group

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.