Cargobus expands in Lithuania, Latvia

The bi-weekly business report by Bonnier Group news2biz Estonia wrote: Cargobus, the Estonian parcel delivery and courier services company, is expanding its services in Lithuania and Latvia.

Cargobus, that uses regular intercity bus traffic for parcel services, started in Estonia in 1992 and expanded to southern Baltic countries in 2004, establishing its branch offices there. Now, Cargobus is registering its Lithuanian branch as a separate business entity, and also plans to do so with the Latvian branch.

"We have operated in Lithuania since 2004. In the first years, the main task for our Lithuanian branch was to receive parcels delivered from Latvia and Estonia as well as organize their further delivery both in Vilnius and the rest of Lithuania. Lithuanians could also send and receive parcels in the Vilnius office, where we had also a samll warehouse," says Kadri Johanson, CEO of Cargobus, to news2biz. "Within the years, however, the Lithuanian branch of Cargobus has expanded, and thus also the priorities have changed. Now it is a successful independent business unit, for which the status as a branch has already become restrictive," she adds. "The Lithuanian office is not anymore only a receiver of parcels, but an active part of our delivery chain in the Baltics, offering courier and parcel services, but also expedition to Europe and the CIS states."

In the beginning of the year, Cargobus moved in Vilnius to larger premises, which also provide warehouse space for parcels. "The move accompanied with the increase in warehouse space was crucial in order to increase our parcel delivery volume and the range of services," says Johanson. "The Lithuanian market is one of the most attractive in the Baltics due to its size, but the competition situation there is also difficult," notes Johanson. "We cannot implement in Lithuania the same business model we have in Estonia – here we have a country-wide network of offices in the busiest bus stations. At the same time, there are several other opportunities in Lithuania, and we have a few plans there, but it is yet too early to reveal them." According to Johanson, Cargobus expects its turnover in Lithuania to grow by 15% in 2012 in yearly comparison.

In Latvia, where Cargobus already possesses its largest warehouse, the reorganisation of the business form and the following expansion of services is expected to start in the following months. Cargobus turned over EUR 2.4m in 2011, an increase by 15.6% yearon- year. 81.6% of turnover originated from Estonia, where the company has 22 rep offices all over the country. In 2011, the company's profit amounted to EUR 68,000, a drop from EUR 0.2m previous year, attributable to higher expenses due to the fuel price rise. Cargobus cooperates with over 30 bus companies and 20 other transportation companies; its 100% owner is Tallinna Bussijaam, the holding operation of the Tallinn bus station.

Bonnier Group/Äripäev news2biz Estonia, 8 | No 343 | 20 September 2012