FORBES MAGAZINE MARCH 2020
Publication: Forbes Magazine
Spokesperson: Aras Kargo General Manager Utku Ayyarkın
Aras Kargo goes from strength to strength with its technological investments
We sat down with General Manager Utku Ayyarkın, who took over the flag on the 40th anniversary of Aras Kargo, to talk about efficiency-oriented investment policies, the impact of digital transformation on the shipping sector and Aras Kargo's current goals.
Can you share a bit about how Aras Kargo performed in 2019?
As Aras Kargo, we have been the industry leader in pioneering and innovative services since the day we were founded, and we continue to invest with our vision to become a "world brand". With more than 4,000 vehicles, over 800 branches, 28 transshipment centres and 14,000 employees, we are one of the shipping companies with the largest distribution network in Turkey. We carry an average of 600,000 shipments every day.
By investing, we continue to create jobs and add value to our country. We finished 2019, which we kicked off on the principle of "greater efficiency and profitability", consistent with our goals. By maintaining our steady growth each year, we have increased our turnover by approximately 50 percent over the last three years. For the coming period, we expect to increase our turnover by more than 30 percent.
How would you describe your growth strategy and future plans for the coming period? What does your new investment path look like?
In the shipping sector, which has a very dynamic structure, it is even more important than ever to make technological investments according to changing demands, to strengthen the infrastructure and to make business processes more efficient. We blend our knowledge and experience with today's technology and service understanding to provide fast and reliable service to our customers. To this end, mapping infrastructure forms one of our investment priorities this year. Our main goal is to completely switch to courier route optimisation. Another investment focus is hand terminals, which are an indispensable part of our couriers. With our investment in hand terminals, we are able to track all our business processes with the "direct reading" method.
Again, we continue to invest in technologising our transfer centres, which we started a few years ago in order to make business processes more efficient. In the first quarter of 2019, we technologically renovated the Orhanlı Transfer Centre on the Anatolian side of Istanbul and the Transfer Centre in Izmir and switched them to the "sorter" system. We plan to complete the Ankara transfer centre within this year. Last year, in order to better manage the increasing volume of e-commerce shipments, we invested in small package sorter machines on both sides of Istanbul. In this way, we also aim to increase capacity and efficiency.
"We gave our customers a competitive edge"
How does Aras Kargo adapt to the new developments in the age of rapidly evolving technology?
The e-commerce sector is seeing a rapid growth around the world. E-commerce sites, which act as the biggest players in this growth, expect fast, safe and high-quality shipping transport to carry this momentum. Making digital transformation a priority and investing in technology infrastructure is essential to meet current expectations and keep pace with global change.
As Aras Kargo, we keep abreast of this change and pursue our investments in technological infrastructure without interruption. In this vein, we have expedited our work on the digital transformation process that started about three years ago. Our initial investments were primarily in technologies such as vehicle renewal, handheld terminals, resource planning software, electronic measuring and weighing systems, and conveyor systems. With the digital transformation, we have started to transform not only software and systems, but also our organisation, branches and transfer centres. This transformation positively impacted our customers' workflows and enabled them to compete in their own industries.
More than anything else, the appreciation of our customers clearly reveals that we are progressing in light of the right vision. According to the 2018 SME E-commerce Report, we have been voted "The Shipping Company Preferred by SMEs" for the last two years in a row. We have also been named "The Brand that Best Designs and Presents Customer Experience" at the ALFA Awards for the last two years in a row.
"We take action with environmental awareness"
Could you also tell a bit about your projects where the environment is your primary focus as Aras Kargo?
We take action with a sense of responsibility for the environment in the shipping sector, which inherently creates an ecological footprint. In this regard, we started adding electric vehicles to the fleet in 2011 to reduce the carbon footprint. With our electric commercial vehicle fleet, we save an average of 10 percent per month in fuel costs. This eco-friendly step will eliminate 5,787 tonnes of carbon emissions in 8 years, the average lifespan of electric vehicles. This is as beneficial to nature as planting around 18,000 new trees. In addition to this benefit, we have planted around 140,000 trees so far thanks to our collaboration with ÇEKÜL.
In 2014, we launched the Nature-Friendly Araslar initiative in collaboration with TURMEPA (Turkish Marine Environment Protection Association) to keep Turkey's coasts clean, and we continue our efforts to raise awareness of this issue. With the voluntary participation of our employees and their families, we have so far managed to clean the coasts of Kınalıada, Büyükada, Burgazada, Samsun Atakent and Tekkeköy, İzmir, Fethiye, Trabzon, Lake Van, Bodrum, Adana Dam Lake and the Bursa Dağyenice pond area. In total, we have collected over 4 tonnes of waste in four years and recycled it through TURMEPA and the local municipalities.
On the other hand, we achieve energy savings of 25 percent by using LED lighting and photocell systems in our handling centres. In addition, our shipping bags are made from eco-friendly materials.
What course do you foresee your current market dynamics to follow in the next five years?
E-commerce and shipping are currently two sectors that mutually influence and cross-fertilise each other. Therefore, it would be very difficult to separate the developments in e-commerce and shipping.
As mentioned earlier, Turkey is a very fast-growing market in e-commerce. We notice that consumers increasingly prefer mobile devices in the retail sector. Whereas more than 70 percent of customer visits to leading retail brands are through mobile channels, these brands generate more than 60 percent of their sales through mobile. It is a well-known fact that catchphrases such as "same-day shipping" or "next-day delivery" influence consumers' purchasing decisions. Turkey holds great potential in terms of e-commerce development in the coming years. Both e-commerce players and the shipping sector will be among the most important issues in the coming period when it comes to making the necessary investments and technological changes to match this potential.
Can you share your plans and goals for 2020 and beyond?
As in this year, we will be making technological investments in our existing transfer centres in the year ahead. Starting next year, following our major cities, we will focus on technological investments in our transfer centres in Anatolia. As part of our digitalisation process, we also want to achieve better operational time management here by ensuring that our couriers' work areas are automatically set in the systems.