Aras Kargo Rises to the Top of E-commerce with Technological Investments
SABAH NEWSPAPER APRIL 2021
Publication: Sabah Newspaper
Issue: Shipping and Logistics Giants
Spokesperson: Aras Kargo General Manager Utku Ayyarkın
1. Could you tell us a bit about the history of the founding of Aras Kargo, one of the first companies that pops into the mind when it comes to transport and shipping in Turkey?
The foundation of Aras Kargo was laid in 1979 by our founder Celal Aras with the establishment of Aras Distribution and Marketing. In 1989, Aras Kargo took up its operations when we decided to apply our distribution power in the transport industry conditions of the time. Each year, concurrent with the development of our service network, we introduced our industry-leading innovations to meet the expectations of our customers. Over this long journey, our most valuable resource has always been our competent and experienced staff. The dedication of 16 thousand Aras employees is what empowers us to make a difference in the industry. We are part of a big and beautiful family with almost 1000 branches, 28 transfer centres and 16 thousand employees. Our transfer centre, IT infrastructure and operational investments enable us to deliver an effective digital transformation process. Through our investments and operational experience, we have become the most important player in the industry producing work with automation. We concluded our long-running partnership process last year, with Austrian Post increasing its stake in Aras Kargo to 80 percent. As Aras Kargo, we are Austrian Post's largest shareholder. We currently operate in 10 different countries and are pursuing our investments and activities, taking Austrian Post's experience with us.
2. Can you brief us on Aras Kargo's products and services, what solutions do you offer to your customers?
We offer delivery solutions to cater to all our customers' needs, both domestically and internationally. Beyond our standard service, our preferred products are Aras Tahsilatlı (Cash on delivery), where we allow easy payment at the doorstep, and Aras Uçak (Aircraft), which reduces delivery times in provinces that are suitable for air transport.
Meanwhile, given the pandemic that we are facing, we have been focusing on our solutions in this direction. One of the three most important measures in the new environment created by the pandemic is social distance. On this note, we have expedited our work on coded delivery and handheld terminal reading method in the new type of chip IDs that we started infrastructure work with two years ago, and we have introduced the contactless delivery solution, which has become a vital need. Our main objective was to protect the health of our clients and staff.
With the pandemic, we started knocking on more than 1 million doors every day. We significantly improved our mapping infrastructure to handle the increased address and data traffic. As a result of these projects, we have created the most appropriate infrastructure to properly manage the daily volume of transactions, as well as to provide additional staff augmentation for times when the number of shipments goes up.
We also receive a very good return on investment for the solutions and services we provide to the satisfaction of our customers. According to the SME e-commerce report, we have been voted the "SME's preferred shipping company" for the last three years. We have also won the "Brand that Best Designs and Presents Customer Experience" award at the ALFA Awards for the last two years in a row.
3. So how did technological changes manifest themselves in your sector, and what have you done and are you doing to keep up with these changes?
As Aras Kargo, we are encircled by a process in which we are transitioning from an operating company to a technology company. By making investments of almost 300 million TL, we have taken our operational processes a step further to set up an example for the sector. We are rolling out our technological investments in 2 areas: Branches and Transfer Centres.
Under our investments in our branches, we launched our uninterruptible data security project to ensure that our operations are not interrupted even during natural disasters and earthquakes by securing our machines. We collected customer data previously kept in the branches in a single centre and prevented erroneous data with our centralised data system project. We pioneered our SMEs' entry into the digital world using the self-service application we developed. We scaled up our mapping infrastructure to handle the increasing address and data operations and launched the courier route optimisation project. We invested in our handheld terminals for instant access to data. We developed our self-service applications and renewed our voice response system and mobile application.
We differentiated our shipping delivery method to protect the health of our employees and customers. We introduced contactless delivery with ID card reading and SMS code. To make this process as health-friendly as possible and to ensure that our customers can reach us at any time, we have completely improved our call management processes. We have also increased the capacity of our call centre by 2.5 times.
In an attempt to better manage time and capacity for our transfer centre investments, we increased capacity by more than 300 percent with automation investments in 8 transfer centres. With a tripling of our hourly processing capacity, we have thus become the most important player in the industry producing work with automation.
4. How did the Covid-19 pandemic affect the shipping sector and also Aras Kargo?
In the aftermath of the pandemic, a time of great social and economic change began unlike ever before. Largely due to the rapid growth of e-commerce, we had to handle a volume of business that doubled. The number of shipments from our marketplace and e-commerce customers doubled. However, on the other hand, the number of parcels from our B2B customers, who ship from business to business, decreased. These shifts are echoed in our business model: whereas we used to go to one place and leave more than one parcel there, with the impact of the pandemic, home deliveries increased and we started to leave one parcel at each place. We started delivering smaller parcels to many more addresses. The number of addresses we stopped by on a daily basis increased from 500 thousand to over 1 million. By the end of the year, we had visited 200 million addresses, which means we visited the population of Turkey more than twice.
We also ramped up our investment in automation, which we had started as part of our digital transformation investment plan, and relocated half of our 28 transfer centres across the country. We moved to larger square footage to accommodate new lines. We revamped our call management processes from the ground up and increased our call answering capacity by 2.5 times. By developing the voice response system, we were able to give our customers faster access to the information they are interested in. This allowed us to significantly reduce the number of calls and complaints. It was at this point that we deployed the flexible workforce model. We overhauled our mapping infrastructure and reduced errors in the arrival centres. In addition, we handled the increasing volume of business with new hires. We offered new job opportunities to more than 1,000 people in this process. We made all these improvements through a collaborative effort with our nearly 16 thousand teams who work on the ground every day. With all the investments in automation, we would not be able to deliver the packages that connect people to life were it not for the 16 thousand people who work in the field every day. Our employees in the transfer centres, in the branches and the couriers carry hundreds of parcels every day. At the beginning of the new year, we wanted to say thank you to them and made a thank you film with the slogan "There is no "we" without "you"". They are the ones carrying Aras Kargo on their backs. We have received very positive feedback from our staff and the industry. Once again, I would like to thank all our employees for their dedicated work.
That is how we grew to become the most important player in the industry producing work with automation. This is also evident in our growth performance. In 2020, we continued our double-digit growth trend and recorded a growth rate of 65 percent. We have been able to continuously and regularly respond to the increasing demands of our customers, we have said we give and we carry. We have carried their packages and they have preferred us more and more, making us the market leader in many segments. At the Echo Awards, where the best in e-commerce are crowned, we were named the shipping company with the best e-commerce experience two times in a row.
5. How much of the goals could Aras Kargo reach in 2020, a year that suffered from the pandemic, and what can we expect from 2021 in terms of goals?
In recent years, the shipping industry has gained a lot of momentum based on changing consumer habits, developments in the e-commerce market, the global pandemic and technological change. The digital evolution of the sector is streamlining business processes, mitigating risks, and increasing efficiency and capacity.
With these developments in view, we have set quality as our priority for 2021. Consequently, we are committed to further improving our quality with our investments in integration, route optimisation and integrated management systems. We have an investment goal of 1 billion TL in total for the upcoming period. We aim to create a unique customer experience through step-by-step customer information, buyer convenience, CRM and customer service management. As we continue to invest in transfer centres and IT infrastructure, we will assert our leading and innovative position in the industry. We will focus on our courier route optimisation project and technological investments in our transfer centres in Anatolia after the 4 major cities. In 2021, we aim to consolidate our market leadership with these projects. We will continue our efforts to further strengthen Aras Kargo's dynamic position in the market and invest in the customer-oriented solutions we offer.
6- What is Aras Kargo's vision and mission behind the provision of these services?
We are always looking for novelties, and breakthroughs that build added value for the sector. We take action with the awareness of contributing to society, to nature and to the development of our country's economy. Our priority is quality. It is in this spirit that we strive to perfect the customer experience from start to finish. We are constantly innovating our business processes to meet current expectations and keep pace with global change.
Sustainability as a key growth strategy is another important point for us. We have a very sensitive approach in this regard. We initiated the incorporation of electric vehicles into our fleet in 2011 in order to reduce our environmental footprint. We are the first shipping company in Turkey with a 100 percent electric commercial vehicle fleet. We have a plan to further expand our electric vehicles. We are also working with TURMEPA (Turkish Marine Environment Protection Association) as part of our Nature-Friendly Araslar platform. In 4 years, we have prevented almost 4 tonnes of waste from polluting the environment on 15 different coasts in Turkey. We will not let up in our efforts to create a sustainable world. We will continue our efforts to reduce our carbon footprint and continue our environmentally friendly investments.