Yuri Benevitsky, director of Nova Poshta Global, an expert in the field of international logistics, told readers of LDaily about the changes in this segment caused by the coronavirus crisis, as well as new projects that will help to meet the growing demand for international express deliveries.
LDaily: What are the main international shipping routes you use?
Y. Benevitsky: We use all possible routes of delivery, excluding sea. But we are also working on this option. Most parcels are delivered to Ukraine by air transport. We have direct flights as well as transit – through hubs in Warsaw, Istanbul, Baku, Copenhagen, and from there we take cargo to Borispol. We do not exclude transit and other delivery methods that will enable us to maintain those terms that were promised to the client.
Also, some parcels are delivered by truck, and during the quarantine, we even tested the delivery by train. The most important thing for us is that the goods do not accumulate, so we send them in all possible ways, which at the moment, include combining air with the railway and motor transport. This method of delivery is called multimodal (Intermodal) – when one consignment is transported by different modes of transport.
LDaily: Why do you exclude the sea? Is this delivery not in demand or is it long enough?
Y. Benevitsky: We do not rule it out. The problem is that delivery by sea takes more than a month, and customers want to receive their parcels as soon as possible. However, we found a way to deliver, which is generally less than 16 days of transit time. That is why we use it. It is faster than the sea but longer than the air.
LDaily: What kind of goods do you deliver?
Y. Benevitsky: In general, we deliver a lot of goods. And a significant share of deliveries belongs to China and the United States. Most often, Ukrainians order from AliExpress and from American online stores: iHerb, Ebay, Amazon, and 6p.m. These are phone cases, chargers, cables, various electronics, power banks, and other devices, as well as children’s goods, clothing, shoes, a large number of household goods, dietary supplements, some cosmetics.
LDaily: What other directions of delivery to Ukraine do you have?
Y. Benevitsky: Besides the United States and China, delivery from Europe is popular as well. From Europe, we deliver mainly clothes, shoes, cosmetics, electronics, children’s goods. This range is typical for the euro area (mainly Poland) and the United Kingdom.
LDaily: Are there any items that cannot be delivered by Nova Poshta?
Y. Benevitsky: Of course, there is a list of products which are banned. There are two types of goods: those that are prohibited for carriage and transportation by a certain type of transport, and those that are not allowed to move through any border: Chinese, Ukrainian or another.
Therefore, we do not transport goods that are prohibited for movement across the border. This is a violation of the law, and we comply with the laws of Ukraine and other countries. And during transportation, there are certain types of dangerous goods that are forbidden to carry on board.
LDaily: How has quarantine affected this industry? Have customers’ preferences changed?
Y. Benevitsky: to begin with, not only have the preferences changed, the fact is that the demand has changed – it has increased significantly during the quarantine period. Most likely, the increase was typical for two categories: those who previously ordered only in Ukrainian online stores, and those who previously preferred to buy offline.
I can confidently say that the quarantine has helped many Ukrainians overcome their fear of online shopping, so we expect that the number of parcels will only increase.
During the quarantine, one category from Chinese stores appeared to be especially popular: that is protective equipment – masks, gowns, gloves, thermometers, other products of this group. As for the United States, Ukrainians began to order more dietary supplements, clothing, footwear, electronics.
LDaily: What has changed in the process of delivery due to the coronavirus pandemic?
Y. Benevitsky: Everything has changed. All our usual methods of delivery have been suspended because all passenger airlines have stopped working. Earlier we brought cargos using mostly regular passenger flights. Therefore, we had a very quick launch of delivery by cargo, using transit routes. There are more air flights to the Eurozone, respectively, and the possibility of delivery to Europe is even better. We can carry out all the necessary transit procedures, for example, sorting the cargo, right there, and then bring it to Ukraine by truck.
This route certainly affected the timing and cost of delivery.
LDaily: Did shipping costs increase too?
Y. Benevitsky: The cost has increased, but it is a manageable process. Due to the flexibility of the logistics model, as well as the use of different modes of transport and routes, for our customers, the cost of delivery has not changed.
LDaily: And which e-commerce giants do you work with?
Y. Benevitsky: If we talk about the Chinese structure, it is AliExpress. Our customers order most of the parcels there, but now we see interest in other Chinese sites as well. During the quarantine, we started to use Chinese partner SF Express service for NP Shopping PRC. Thanks to their new service, Ukrainians can order in any Chinese online store that accepts Ukrainian cards for payment. The most popular among users of this service is the Taobao store. Its share is 63% of the total number of orders, followed by Tmall – 10% and Alibaba – 6%.
If we talk about the western direction, in the United States we work closely with iHerb – these are the suppliers of healthy food products and cosmetics, and also, we recently became a logistics partner of ASOS – the English online clothing store.
However, popular international stores do not always have direct and affordable delivery to Ukraine. That is why we offered the NP Shopping service to Ukrainians. It allows you to order products from almost any online store in the US, China, Poland, UK. When registering on the site npshopping.com, the customer is provided with local addresses in the countries of the order, where the goods are sent from the online store, and then we pick them up and deliver them to the customer in Ukraine. Therefore, the parcel is sent to the customer not directly from the online store, but first to the intermediate warehouse of our partners, and then to Ukraine. Therefore, the shopping opportunities are not limited.
LDaily: Please describe the Nova Poshta Global in numbers.
Y. Benevitsky: In the first half of 2020, we delivered more than 2.4 million parcels. This is twice as much as in the same period last year. This is the number that we are proud of. Also, in the second quarter, despite the closure of passenger flights and the complete reloading of all our logistics routes, the number of departures increased by 10% compared to the first quarter of 2020. This is a very serious development in the conditions of quarantine and pandemic when a large number of activities were suspended. We were able to form new routes, began to actively explore new ways of delivering goods; Launching transit hubs, promptly including our capabilities in other countries for cargo handling, improving transit and customs procedures, etc.
It is worth mentioning about the so-called average check and the weight of parcels. Take, for example, China. If we used to carry parcels up to 200 g (150 g was the average weight), now it has increased to 270 g, and the average cost of a parcel is somewhere around $ 5-10. In the US, the average weight of the parcel is 1.6 kg, and the cost is about $ 60-70.
We have also increased the number of deliveries of B2B cargo from Europe to Ukraine: it is mainly electronics, equipment, and spare parts used in the production of Ukrainian companies. This is the traffic that used to be much less before.
LDaily: How has duty-free access affected your business?
Y. Benevitsky: In fact, the duty-free threshold itself has not affected the quantity: people continue to buy and know that instead of duty-free € 150, they now have to pay tax in excess of € 100. However, we did not see a decrease in traffic. We have a significant number of shipments, costing from € 100 to € 150, for their registration we have increased the capacity. This, in turn, increased the number of customs inspectors and brokers working in our customs zone, as well as other professionals.
LDaily: You deliver not only to Ukraine but also from Ukraine. And which of our products are in high demand?
Y. Benevitsky: Currently, the handmade market is very actively developing in Ukraine. Many Ukrainians sell their products on Etsy, eBay, Amazon, and other platforms. But in addition to handmade, Ukrainian entrepreneurs export food, spare parts, equipment, which is produced in our country and is popular abroad. We deliver such cargoes to our B2B clients who work within the limits of foreign economic contracts with the USA, Europe, etc.
LDaily: How convenient is it for SMEs to export using Nova Poshta Global?
Y. Benevitsky: First of all, we gave the opportunity to Ukrainian entrepreneurs to send their parcels abroad from any branch of the country, pre-registering them online. After confirming the online application, you just need to give the parcel to the operator. Yes, you can send the goods sold on Amazon, from any region of Ukraine in any region of the US or the Eurozone.
Secondly, we are moving towards business support and a variety of ways to expand the market for our businesses.
In addition, we have several tariff offers: NP Export with the best ratio of price and delivery time, NP Export Premium for more urgent delivery, although the cost is slightly higher. That all depends on the weight, the country and delivery time.
LDaily: How did you organize the work of employees during the severe quarantine, when it was difficult for them to get to work? What did you have to change?
Y. Benevitsky: All office workers quickly switched to remote work. It was not a big challenge for us, because we are used to this model of interaction, working online with the world. We have many partners around the world and we are constantly in touch. Accordingly, the whole team is already accustomed to remote work via Zoom, Skype, to using various means of communication.
The most difficult part was to organize the work of the warehouse, where the physical presence of employees is required. We made a sequential variable mode so that teams do not intersect with each other – an interval way of organizing change. This allowed us to reduce the risk of possible infection. Thanks to this work, we easily survived a difficult period, none of the staff fell ill. And the office workers all worked from home.
LDaily: And finally: what are Nova Poshta Global’s plans for this year, and were they revised due to the corona crisis?
Y. Benevitsky: First, if we talk about the corona crisis, it stimulates distance trade. And we work in this segment, so we are also developing and growing in the same way, meeting the growing demand for online shopping. We are always close and growing with our clients.
Secondly, we have a lot of clients with whom we continue to develop relationships and increasing the volume of work. We analyze and consider how we can further intensify this cooperation and, accordingly, expand and develop it as much as possible and as far as the resources of both parties allow.
Thirdly, we connect new partners and customers, which appeared recently. As I mentioned, we have recently started working with Asos – all women in Ukraine will be happy because now they can buy and receive these products through Nova Poshta Global. We are still developing many partnership projects that we plan to implement.
Thus, our plans are to develop existing initiatives, implement new projects, meet the growing demand for online shopping due to the corona crisis, and connect new customers, which we planned long before the crisis.
We keep up with the needs of the business, we keep up with the needs of the client, improving and making customer’s life easier.
Please read: Never give up!
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