A large number of domestic courier service providers are considering price increases of around 10% in the coming period due to rising costs and Romania's infrastructure, which is in poor condition.
"Prices are expected to rise by around 10-20% due to rising labour costs, as well as Bucharest traffic, which affects productivity. We must take into account the fact that Bucharest accounts for around half of the courier volumes countrywide," said Octavian Badescu, general secretary of the Association of Courier Operators in Romania. Labour costs, Romania's bad roads, rising fuel costs and the high level of investments have forced Curiero (a major domestic player) to push rates up by more than 10% in October,
"Curiero decided to raise rates for its express delivery service. The 10-30% rate increase will not be operated uniformly however, but for each customer, depending on the volumes of individual deliveries," stated Bogdan Carcu, Curiero chairman. According to him, maintaining low prices, below the market level, is no longer viable because of the changes the market has witnessed. "We expect our current customer portfolio for this service to stay at around 70% in the wake of the rate hike, without affecting turnover," stated Carcu.
As a result, while couriers previously strove to compete with low rates, customers' rising demands have made companies to boost their investments, which are reflected in falling profit margins.
TNT generates the majority of its domestic turnover from international delivery services, which, according to Bogdan Zafiu, country sales & marketing manager, prove more profitable than domestic services, which means he does not anticipate any rate increase in the coming period.
Several couriers operating in Romania, including Cargus and Fan Courier, saw their profit margins shrink during the first half of this year aga
