DHL Georgia: “Law on Postal Service the Main Challenge for Us”

DHL Georgia: “Law on Postal Service the Main Challenge for Us”

The FINANCIAL -- A new draft law on postal service that has established the Georgian Post monopoly is not meeting either EU regulations or general conditions of a competitive business environment, said Malkhaz Papelashvili, General Manager at Georgian Express, official representative of DHL Georgia.

The company sees huge opportunity in expanding its business in complex logistic and domestic transportation during 2014. Georgia’s express industry showed only 3-4% growth during 2013.

During the current year the main concern of express business operating in Georgia has been focused on a draft law on postal service that established the Georgian Post monopoly. “The bill has been withdrawn for its further processing. Independent business individuals, representatives of NGOs and various experts will now process it. We hope that the final statute will be more developed,” said Papelashvili.

While Turkey with its booming economy remains a logistics hub in the region Papelashvili suggests using the geographical location of Georgia in the best way. “We should strengthen the potential of having a logistics hub on our territory. Appropriate legislative and investment policy and the support of the Government for various projects are key factors in regard to this,” said Papelashvili.

Q. After the 2012 political changes you had quite positive expectations, especially regarding the privileged and monopolistic environment. Have your hopes been realized?

A. It is too early to say. The past year has been a period of uncertainty and transition. The first assessments will be available after the results of 2014 come in. A renewed positive mood can be felt in business and investment in general. We have to see what kind of legislative and business environment will be established during 2014.

Q. By how many percent did the express industry in Georgia increase in 2013?

A. There was no significant growth of the express industry in 2013, which is natural for a year of political transition. Revenues in the industry increased slightly (by 3-4%) during 2013. The price index has been reduced in line with the inflation index.

Q. Due to your work you often have to cooperate with foreign partners. What are the major differences between the express industries of different countries?

A. Express shipping can be considered to be one of the indicators of business development. The more developed a country is, the greater demand there is for express shipping service. The quality of a country’s development and business activities determine the situation of this industry in the country. In this regard, Georgia has the same status as developing countries and emerging economies. The situation with regard to express services in Georgia can be considered in the same way. The turnover of DHL Georgia is higher than that of DHL Armenia or DHL Azerbaijan. This fact demonstrates the merit of our company.

Q. What was the turnover of Georgian Express in 2013, by how many percent did it increase or decrease?

A. In absolute figures, in 2013 Georgian Express’s revenue declined by 10%. However, it should be noted that this was due to the closure of a certain direction of the business. The company continued to increase in all other directions.

Currently, with its regional network of offices, Georgian Express covers the whole territory of Georgia. The company provides full coverage of services on the level of regional centres.

Q. Which sectors of the economy showed the biggest increase in shipments in 2013?

A. From our business directions, the increase was shown in the domestic shipping market in 2013. The banking and insurance sectors were the most active in terms of business activity.

Q. What part of your business is made up by import and export? How has this statistic changed during the past three years?

A. Not only in the last 3 years, but from longer ago than that there has been a trend of a slight increase of export in terms of the imports - exports ratio. However, in absolute figures the amount of exports is significantly lower than the figures of imports. If this trend continues, balancing the imports - exports ratio will take many years.

Q. Which were the top countries for transportation in 2013?

A. The EU member states, USA, China and Russia were listed at the top.

Q. DHL is present in almost every country. What is Georgia’s share in the company’s business?

A. DHL is a global company. Having a high standard and good quality business in each country is very important to DHL. Of course our contribution to world business is very small, but in DHL’s supply chain Georgia is one of the strongest rings. Thus our contribution is larger than can be expressed in figures.

Q. What are the main demands that your customers have towards your company?

A. Reliability of shipping, speed, high quality of service, friendliness of staff and efficiently meeting the innovative needs of business - are the main requirements of our customers.

DHL has always been a flagship in terms of developing IT and offering electronic products to its customers.

Q. What opportunities and challenges do you see for your company in 2014?

A. The Government’s approval of the new law on postal service will be the main challenge for us. Meanwhile, I see huge opportunity in increasing complex logistic and domestic transportation.