Autamarocchi: Taking control

A prominent name in Italy’s commercial road transport industry, Autamarocchi was established in 1986 when two leading transport businesses, Auta and Marocchi, merged to form the country’s first national transport powerhouse. Both companies took a pioneering role in the early 1970s when the first marine containers arrived in Italy, creating a need for ‘final mile’ haulage between wharf and mainland destination. 

According to Vice General Manager, Ervino Harej, the new brand immediately became a point of reference in the Mediterranean transport market, drawing on a combined network that would link Italy’s main ports as well as the country’s most important areas of production and consumption. “Most importantly, though, Autamarocchi was one of the first in the business to introduce a special software to manage the entire planning, communication and invoicing process. In the first year alone, we saw a 50 per cent increase in revenue simply due to added efficiency.” 

Today, just over a year since unelected economist Mario Monti was winched into Italy’s Chigi palace, the company is a buttress of Italy’s largely anaemic economy – employing some 900 staff and generating a revenue of €120 million in 2012, a six per cent increase to 2011. The overall economy, meanwhile, is forecast by the European Commission to shrink by 2.3 per cent this year and by a further 0.5 per cent in 2013. Some say it is Autamarocchi’s strong focus on high technology and customer demand that has made the business crisis-proof. 

“Autamarocchi was founded as a response to the need of leading shipping lines for a flexible logistics expert based in Italy, one that would be able to service all major ports and freight hubs and boast a considerable capability of response for road and intermodal transport in Italy and throughout Europe,” says Harej – who, according to ground staff, is working on the same 24/7 schedule as Autamarocchi’s vast fleet.

Fast-forward to today, and Autamarocchi’s business is split into two core divisions – container handling and conventional freight. While the container business is focusing on the Italian home market and Slovenia, servicing shipping lines, forwarders and global corporations like Ikea and Benetton, the conventional freight unit is operating all across the European continent.

To Harej, however, Autamarocchi is not just a large transport business; it is the country’s innovation hub, that rare constant amid a fluctuating economic environment. “Innovation and growth are Autamarocchi’s DNA. 26 years in the making, we have created a fleet of more than 600 trucks that is available 24 hours a day, seven days a week. It’s our life insurance,” says Harej, a well-composed businessman who is acutely aware of Italy’s precarious economic situation.

“There is high competition between a lot of small companies which, combined with rising costs for fuel, highway usage and labour, has made for a shark tank only few will eventually survive,” he says, drawing a dark, yet realistic image of the economy as is.

“A combination of lacklustre productivity and continuing wage increases has pushed up unit labour cost, resulting in a loss of competitiveness against Germany in particular – and also against other southern European economies, where they have been falling recently,” The Economist stated in December, elaborating on Monti’s political balance sheet and Italy’s slow downfall in Europe.

Unknowingly, The Economist and Harej come to the same conclusion when talking about the Italian economy – the key issue is the market itself, the compartmentalism it has developed, and maybe even a lack of assertiveness on the top level. “Italy was once extolled for its clusters of little firms, but small is no longer beautiful now that competition from low-cost Asian producers has intensified. The country has too few global champions,” The Economist said, and Harej can all but disagree.

“Italy and us, we need a market with less players, who have to be larger in size and more structured. On the political front, we need to look at the cost of labour and fuel, and continue to invest in infrastructure again – especially in rest areas around our main ports,” he says.

Despite that damning indictment of Italy’s commercial road transport segment, Autamarocchi can still boast a solid market share of about 10 per cent in the container business and six per cent in the road transport market. The reason for that success is a complex mix of austerity measures, lean management, and globalisation. “We have worked hard in order to create a truly European company,” says Harej. “Our management, especially owners Oscar and Alessandro Zabai, are available 24/7 to guarantee a fast decision-making process.”

While both Harej and the Zabai family place high value on lean management and strong cost control, one area is not subject to that post-GFC austerity – IT. “We continue to invest a high percentage of our annual revenue in communication technology because we believe it is a real point of difference,” says Harej. “For instance, all of our drivers have a company smartphone in order to exchange data, such as photos or documents, with both head office and the respective client.”

Autamarocchi’s operational ‘brain’ is a high-tech control room in Trieste, a seaport wedged between the Adriatic Sea and Italy's border with Slovenia. Despite the crisis, or maybe for that reason alone, the facility has recently been upgraded to ensure it can boast all the latest in fleet management technology – including a nine-metre video wall, which is able to keep track of every movement of every vehicle all around the world.

“Every day, hundreds of vehicles and thousands of shipments have to be coordinated, organised and controlled, while respecting all of today’s requirements, such as real-time tracking and ensuring all permits and licenses are issued correctly. That’s why we need a sufficiently funded IT department, who can tell us everything about every load or refrigeration unit, and plan the best route for every truck to avoid empty mileage. A minute can make all the difference here.”

At the end of the day, Harej is promoting nothing but classic, anti-cyclical investment, a strategy that has helped many a company weather the Lehman storm in 2008, including Autamarocchi. Of course the company did take a hit during 2008 and 2009 as well, but due to savvy investment and sufficient cash flow – an advantage of company size – it was able to bounce back in 2011 and 2012. That does not mean Italy is out of the woods, though. In fact, “the lowest point of the crisis will be in the first quarter of the year 2013,” Harej says. “But we will still keep opening new offices and purchasing new equipment, just as we did during the GFC and the most recent Eurozone debt crisis. In 2013, for instance, some 50 trucks will join the fleet.”

The result of that investment policy is an impressive fleet of about 1,200 trailers, mostly built by Italian brand Merker and German rival, Kaessbohrer, which is now owned by Turkish automotive giant, Tirsan.

“About half of our container fleet consists of specially built, extendable trailers, while the road transport division is mainly based on a standard 13.6-metre curtain-sider model,” says Harej, revealing that quality is the top priority when purchasing new transport equipment, even more important than pricing. “At the end of the day, it’s all about durability,” he says. “That’s why we also look at the paint quality and the components chosen, as well as the testing that has been carried out.

“Our average turnaround time is six years, which we decided on to actively grow our fleet, and in the skel segment, we look at an operational life of about a decade.” Two company-owned workshops in Trieste and Tortona (AL) take care of the trailer fleet and ensure all safety guidelines are met.

100 per cent of the equipment purchased over the last few years is equipped with EBS and air suspension, and the general freight division is also implementing new security norms as per DIN EN 12642 Code XL across the fleet.

Despite that on-going innovation, the company’s initial mission statement has not changed. “We always try to anticipate the market’s needs and keep the entire supply chain in mind, not just the road transport leg. In short, we are driven to find the best possible solution to deliver freight punctually,” says Harej. “And we’re doing everything we can to continue to do so – even in a time of economic turmoil.”

In that sense, Autamarocchi is giving a refreshingly concrete response to the complexity of Italy’s logistics industry. According to Harej, “it requires great competence and professionalism to find solutions that truly benefit the client. You need a great team, the best transport equipment you can get – and a cutting-edge proprietary IT system.”

Of course, he is aware that there still is a long way to travel until the Italian market will be back to normal. Recently published rankings from the World Bank for the ease of doing business in 2012 put Italy among the worst in Europe. Among 185 countries, it came 73rd; on civil justice, it even ranked an astonishing 160th. But, while the state is still struggling – an election is coming up in spring and possibly ending the Monti-stint – Autamarocchi is one company that is leading by example.

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