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Technological Race

Magazine: InBusiness Magazine
Subject: Aras Kargo 2020 - 2021 Review
Spokesperson: Utku Ayyarkın - General Manager at Aras Kargo

1. First of all, 2020 was a very challenging and difficult year for all sectors due to the pandemic. What has 2020 been like for you and the industry? What experiences have you had, what challenges have you encountered, and what lessons have you learned?

As you probably know, this whole pandemic hit our country in March, and we saw a quick and noticeable change in consumption habits due to this outbreak. As a result of the COVID-19 pandemic, consumers decided to buy all the essential products that they would normally purchase in stores, especially through e-commerce. The most critical factor that affected our business was the change in supply structure. During this period, given that workplaces were closed and more people were working from home, bulk deliveries were minimized, and the number of stores visited by individual couriers increased. The volume of e-commerce transactions doubled year-on-year, but at the same time, the number of addresses we visited increased by 90%. The number of daily deliveries exceeded 1 million. We ended the year with over 200 million deliveries.

The pandemic has clearly proved how important the supply chain is, and the crucial role of the shipping sector in ensuring uninterrupted operations. During this time, workers in the shipping sector worked as hard and dedicated as those in the healthcare sector, security departments or markets, providing continuity in the supply chain. Aras Kargo stood shoulder to shoulder with its customers 24/7 to meet their needs during this period, guaranteeing the continuity of the supply chain without interruption or any kind of compromise. We would like to thank all our shipping employees for their dedication during this process.

2. The COVID-19 pandemic has put shipping companies under some unexpected pressure. How have you coped with these kinds of challenges? How have you adapted to the new world created by the pandemic?

Although we experienced initial setbacks during the first days of this world-wide change, we were able to manage the process effectively thanks to our technology investments, operational know-how, and technical skills. Our digital transformation allowed us to respond quickly to the increased workloads caused by the pandemic, and our heavy focus on e-commerce campaigns over the past few years also played a major part in our success. Among the three key actions for the new reality created by the pandemic is social distancing, so we accelerated the infrastructure work we originally launched two years ago - parcel collection code and handheld terminal for reading chipped ID cards - and began enabling no-contact delivery. Our primary goal here was to protect the health of our customers and employees.

After the pandemic, we began knocking on more than 1 million doors every day. To handle the increased volume of addresses and data, we drastically improved our GIS and mapping infrastructure. Not only did these projects ensure that we had the best infrastructure in place to properly manage our daily workload, but they also created new job opportunities during the height of our delivery growth. We also witnessed a period where the number of calls to our branches and call centers increased several folds due to heavy demand. To better manage this flow as well as possible and ensure that our customers could reach us at any time, we improved our call management system to handle these calls reaching up to 2.5 times higher than before. We also deployed a voice response system for shipping information inquiries, such as "where is my shipment", which accounted for a large proportion of our calls, so that customers could quickly access this information without the need for customer representative intervention.

3. What was your turnover in 2020? What are your goals and expectations for 2021? What are your estimates for turnover and growth this year?

Thanks to our investments across the sector and our operational expertise and capabilities, we are achieving double-digit growth. In 2020, we surpassed TRY 2 billion with a 65% increase in turnover. We are planning on extending our double-digit growth trend this year.

4. What was the average demand growth rate in 2020?

During the pandemic, e-commerce transaction volume doubled year-over-year, and along with the increase in e-commerce users, the number of addresses visited increased by 90%. The number of daily traffic exceeded 1 million customers.

5. You managed to sustain your investments in 2020 despite COVID-19, could you please share some details on these investments and what was the total amount of investment?

We have accelerated the digital journey we initiated at the start of the pandemic two years ago. We have invested around TRY 300 million in our hubs and IT infrastructure over the past two years to respond to increasing demand.

We technically renovated the Ikitelli transshipment center, one of our largest hubs in terms of operations and space. We also technically upgraded our hubs in Istanbul, Orhanli and Izmir. We increased the capacity of our hubs in Ankara, which we fully completed in the last quarter of 2020, bringing the number of parcels processed per day to 220,000. Last year, we also commissioned investments in machines to separate small parcels on both sides of Istanbul to better manage the growing volume of deliveries between 1 and 5 deci. Thanks to our technological investments in our hubs, our hourly capacity has tripled, becoming the highest in the industry.

6. Do you have any investment plans in digitalization and automation for the future and what are your goals in this regard?

Thanks to our investment in eight hubs, we have increased our workload capacity by more than 300% and tripled our hourly capacity, which makes us the best in the industry. Our goal is to provide high-quality services to our customers and further enhance our digitalization and automation with new investments.

7. Do you have any new plans for hiring and investment in the short to medium term? What areas will you be focusing on this year?

 In the upcoming years, we are fully aware of our changing and evolving structure and are planning all our investments in line with these adjustments. We are planning investments totaling TRY 1 billion over the next period. In 2021, we will prioritize quality: we plan to take it to the next level through investments in consolidation, route optimization, and an integrated management system. We will maintain our pioneering and innovative position in the sector with our in-progress hubs and IT infrastructure investments by creating a unique customer experience through step-by-step customer notification, convenient delivery to recipients, CRM and customer service management. We will focus on optimizing our parcel delivery routes. We will continue to invest in upgrading our hubs and strengthening our technology infrastructure to efficiently manage time and capacity. We will also focus on technology investments in our hubs in Anatolia following the big 4 cities. Thanks to these projects, we hope to strengthen our market leadership in 2021.
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