Right now, our company’s goods, valued at over 4 million hryvnias, are stuck on the Polish frontier. We’re talking about 50 tons of polymer fiber eagerly awaited by our global partners. What’s at stake with these delays and missed deadlines? Everything – from losing cash to contracts and even loyal clients. By Viktor Andrukhiv (pictured) ukrainian entrepreneur, co-founder of Fibermix and Savex Minerals
Picture this: nearly 2500 Ukrainian goods trucks are idling at the Poland border, with all 6 checkpoints barricaded. It’s a gut punch for Ukrainian manufacturers and us, specifically, as a hefty chunk of our goods, about 40%, are destined for export. Even though we’ve fine-tuned our operations to Swiss-watch precision, these border holdups and the inability to nail down delivery schedules throw a curveball of uncertainty.
But entrepreneurship doesn’t play dice with fate. We need to pivot and craft fresh strategies. So, here’s my take on how Ukrainian businessmen will tackle the Western market and snag those international deals down the line.
Streams Strategy
We’re talking about a tactic where goods are spread across different checkpoints, even if they’re all headed to the same country. Sure, it might bump up the logistics bill a bit, but it’s all about avoiding a pile-up in one spot. And hey, if things look up at any checkpoint, at least some of our stuff can make it across the border.
It makes sense to transport smaller goods in smaller batches and forego trucks. For example, minibuses will reach foreign clients faster.
It is also worth considering other European countries besides Poland for crossing the European border. For example, we send some of our products through Romania.
Buffer Supplies in European Warehouses
Equipping warehouses in European countries is not a cheap solution for Ukrainian businessmen, but it is the one that provides the most protection for entrepreneurs. If a shipment from Ukraine runs late, we’ve got backup in the warehouse to keep things on track, maintain our reputation, and keep our clients happy.
Right now, we’re eyeing up Slovakia for a buffer warehouse, but we’re still ironing out the details – from the lease terms to security setups. Naturally, keeping the goods stored safely and soundly is priority one.
This strategy isn’t just about renting out warehouse space. There are added expenses for manpower too – think loading, unloading, repackaging, and checking inventory. It’s all part of the game.
Contract Optimization
When dealing with contracts that involve hefty delivery volumes spread out over time, it’s smart to explore optimization options. One approach is to front-load all production for, say, the next quarter. This proactive step helps shield against potential hiccups in logistics down the road.
In simpler terms, we’re sending out shipments earlier, and the client settles payments according to the agreed schedule. This setup ensures the client is shielded from any possible production delays.
However, there’s a drawback to this strategy: it can drain the company’s cash flow. It requires immediate financial injections, which could pose challenges for many businesses.
Rising Driver Pay
The work life of drivers today is akin to that of sailors in the medieval era—they’re never sure when they’ll be back home. This uncertainty breeds dissatisfaction among drivers, making “Ukraine to Europe” route less appealing. Yet, without drivers willing to take on risky trips, exporting goods becomes impossible. Therefore, raising salaries is unavoidable.
Predicting the future for Ukrainian businessmen is a challenge, especially with the uncertainty surrounding the duration of the Polish blockade. While I believe the blockade won’t last indefinitely, we must brace ourselves for any outcome. We’re actively seeking warehouse space, scrutinizing contracts, and discussing potential bulk deliveries with clients. With our country at war, Ukrainian businessmen can’t afford to lose contracts or let down foreign partners. We’re committed to preventing a recurrence of such situations at all costs.
