How did Link’s merger with Waberer’s help both companies grow stronger?

Hungarian road freight and logistics services provider Waberer’s International Group acquired Polish haulier Link back in 2018, merging the company with Waberer's Polska in October of that year. In this interview, Barna Erdélyi, a member of Waberer’s board of directors, and Marcin Kakol, CEO of Link, look back on the merger and the years that have followed.

How did Link’s merger with Waberer’s help both companies grow stronger?

The merger’s purpose was to further extend Waberer’s activities in Poland and serve customers as efficiently as possible. How do you see it from the perspective of 4-5 years?

Barna Erdélyi, Waberer’s: we made the right decision, and we are really happy that Link is part of Waberer’s group, that’s how I feel.

6 years ago, we were looking at the map of Europe to see if there was something we were missing out on. We realized that you can find a Waberer’s truck anywhere in Europe except for Poland.

Of course, there was Waberer’s Polska, but it was just a forwarding office. So we started looking for a haulier with a reasonable fleet and capacity. That’s how we found Link, which had a much bigger size of business and a much wider client portfolio back at that time.

We wanted to have exactly this kind of presence in Poland. Were there some ups and downs along the road in these five years since the merger?

Yes, there were. But would you ask me whether I would make the same decision today as we had at that time, my answer would also be a definite yes.

Barna Erdélyi, member of the board of directors at Waberer’s International

A merger is often a nice word for being eaten up and cleared away by the big fish, so the question comes: what was Link’s expectation before the merger? And how did it turn out?

Marcin Kakol, Link: Five years ago, Waberer’s was seven times bigger than our company. It had been already providing a much more diverse palette of services than we did: full supply chain logistics services with warehousing, distribution and even some cross dockings.

Also, it was serving different markets than we did. So I thought, with the merger, we would become stronger and therefore could compete with bigger players. And I wasn’t wrong.

Regarding the merger itself, I just wanted to have a smooth transition. It was my first merger, and I’ve heard some disturbing stories from my colleagues, so I just wanted to have it done without any complications.

We weren’t eaten up by the big fish at all – we are still independent, make our own decisions and operations, and so I can safely say that the merger did fulfil my expectations. And even more.

We’ve been through some difficult times during these five years together starting in 2018, when the transportation market in Europe had to face a severe volume crisis. Not to mention covid, right after the volume crisis and now the crisis in Ukraine.

Together, we have found our own way to provide added value to our services and conquer difficulties. We have managed to grow stronger and the difficulties proved to us that we are flexible, and that we can adapt to changes because we have the skills and the experience.

Link CEO Marcin Kakol

What did the merger mean as far as operations are concerned? How much influence does Waberer’s have in Link’s daily operation?

Erdélyi: We have never wanted to “colonise” Link. Link can operate most successfully if it remains Link and it is utilising its local knowledge and skillset. We knew this from the beginning.

It is the same approach as some car manufacturers. Toyota and Lexus both belong to the same company, and even share some of their components. Still, they are not the same and customers who want to have a Lexus, won’t be happy with a Toyota and vice versa. It is not just branding, there’s more to that.

It is similar to us: Link has its own reputation on the market and Waberer’s also has its own reputation. If we made Link become Waberer’s, the group would become less, not more.

So no, Waberer’s doesn’t have much of a say in Link’s daily operation.

Kakol: Yes, I can confirm this: we are completely independent operationally. We are doing now what we were doing in the past. But we share best practices and our experiences, and therefore we can learn from each other and grow stronger.

Waberer’s is the biggest haulier in Hungary and one of the biggest logistics companies in Europe. They have a great experience in many things where we are inexperienced.

Take technical issues, for example. With Link, we have always used external workshops, but Waberer’s has their own workshops and therefore deeper knowledge. With the merger, we have the opportunity to be part of the group, and to tap into this knowledge.

In the first year after the merger, the size of the Polish fleet increased by nearly 50 per cent. Are there any plans in place to continue this upward trend at Link?

Kakol: Yes and no. It is my dream to extend the fleet and have 1,000 vehicles in Poland. But at the moment we have a different priority and that is to find drivers for our existing fleet.

During covid time, we had no other choice but to reduce our fleet because the market volume lowered, as the production of our customers reduced significantly.

This year, we had to face the conflict in Ukraine. Nearly half of our drivers were from Ukraine, and many of them left the company to go back to their home country and help their families. And we still haven’t managed to fulfil all the vacancies since then. This is our priority now: to find the drivers who could operate our existing fleet.

Waberer’s International has also significantly downsized its fleet during the very same period, which caused quite a stir not only in the Hungarian press, but also internationally. Some have already talked about the decline of Waberer’s. However, according to the quarterly financial reports from 2022, it was not a decline, but the right business strategy. Is Waberer’s planning to expand its fleet anytime soon?

Erdélyi: I think Marcin explained the market’s developments in 2017 very well, and the following challenges due to Covid and now the conflict in Ukraine. During these hard times, we had to downsize our fleet – that’s true. But now, retrospectively, I’d rather call it right-sizing.

The biggest fleet reduction happened in 2020, when we introduced a business strategy according to which we only kept those vehicles which we could operate on certain trade routes within Europe, connecting the biggest industrial zones and designating the biggest share of our international fleet to the biggest markets in Europe: the UK, Germany and France.

And this business strategy proved to be a big success for both Link and Waberer’s.

The fleet may be smaller, but the effectiveness is higher. Especially since we started focusing on providing added value to our customers. Link’s pilot to provide road transportation services in the air cargo segment is brilliant proof of that.

This is something new. Marcin, could you tell us more about this service, please?

Kakol: We see a big potential in this market and think that Link is ready to provide a high-quality service in this sector. Customers are really demanding in the air cargo sector – but we have both the assets and skills to be able to provide the service they need. Or probably even better service.

When we speak about moving goods transported as air cargo to Europe, we mean many different kinds of goods, but most of them are high-value cargo that needs special attention, special equipment, special trailers and so special skills.

We are planning to operate these air cargo-related road freight services on the most important transport corridors in Europe.

The war in Ukraine has had a significant impact in many aspects on road freight in Europe overall, but especially in Poland. How has it affected Link?

Kakol: As I have mentioned, half of our drivers were from Ukraine. So, although we didn’t provide services in Ukraine before the war, and neither do we now, the conflict has had a very direct and severe impact on our business. When Russia attacked Ukraine, our drivers wanted to go home to help their families. As simple and as understandable as that.

There was a week when we were missing nearly 150 drivers, Needless to say, this shook our capacity to its foundations. In the end, we were able to fulfil all our obligations towards our customers, but we had to revise our fleet and our capacities once again.

At the moment, there are still 65 HGV driver vacancies at Link. The driver shortage was a pressing issue in Poland even before the conflict, but the outbreak of the war put such a strain on the transport sector that it can hardly bear. And Link is no exception.

So much for the past, but let’s see the future. What strategic goals have you set for the next year – either together or separately?

Kakol: If we want to break out of the vicious circle of constantly fluctuating volumes, we must provide our customers with a reliable added value that few others can. And that’s exactly what we’re going to do.

That’s why Link’s focus is on the services around air cargo. This is a sector here with growing volumes and high-value cargo which needs a transport provider that can deliver prompt service at a reliable, high standard. We can do it.

We cannot expect the driver shortage to be sorted out quickly and reliably soon, but after Covid and the conflict in Ukraine, I can safely say that we can count on our skills and flexibility.

Erdélyi: Just like Link, Waberer’s is also aiming to provide services where we can be closer to our clients and give them more added value. This means that we need to diversify our portfolio to be able to provide tailored solutions for each customer.

This is not a new approach for us, but the best and most effective for both the customer and our company.

The services around air cargo, which Marcin has already mentioned, have been a successful pilot for us, therefore we would like to extend it.

Also, we see that the place where our group can play the most is on the playground of the big multinational clients with a high demand for good quality service.

And on top of that, we would like to extend our logistics services, which we have already been providing in Hungary. There is a huge demand for added logistic services in warehouses in Poland and therefore we are exploring whether and how we could enter the Polish market – probably not next year, but hopefully in the not-so-distant future.

But we are certainly planning to extend our logistics services to Croatia and Serbia next year, and even Slovakia is on the horizon.

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