13 May Interview with Erich P. Cossutta, President of Danubia Group
Could you share the history and major milestones of Danubia Group including the companies operating under the Danubia umbrella and what services they provide?
The story of Danubia starts back in 1936, when my great-grandfather started working in transportation at the Port of Trieste in Italy, which was one of the main gates for the Balkan markets. Since then, my family has been involved in logistics across the Balkans. In the late 1990s I decided to switch to a multimodal transport model, where we can connect port infrastructure with inland infrastructure, like railways. So in the 2000s I started many companies that are now active in multimodal logistics.
Over the last couple of years, our focus has been on sustainable transportation with particular focus on the role that railways can play in intermodal transport between the Balkans, the rest of Europe and its ports. That is why two years ago I decided to pull out of all non-strategic businesses that we were involved in and concentrate on capital-intensive projects like railways, rolling equipment (wagons and locomotives) and railway terminals. We are focused on Serbia because we believe it has a central role to play in southeast Europe in terms of regional logistics.
What would you say are the unique advantages Serbia offers in the logistics sector?
The Balkans is a diverse environment. Serbia borders several countries and creates an established trade corridor between Croatia, Hungary, Romania and Greece and on to central Europe. Serbia has done a lot in the last 10 years, especially in railway and highway infrastructure. This has not only boosted our business, but also attracted a lot of investment, which is naturally drawn to places where companies can easily ship their produce, which makes trade easier.
There are still some bottlenecks. The section around the Port of Rijeka in Croatia still needs investment work, but this is beyond Serbia’s control. We see very good development between Serbia and Central Europe and in the future there will be some very strong investments in the south, in the Pan-European Corridor X, which is also crucial for the development of trade between Greek ports and the Caucasian region and Turkey. There are ongoing projects to connect the Port of Bar in Montenegro, which is strategically important for Serbia’s sea access. Serbia has done a lot, but there are still a lot of things to do and we have a very good base here.
How does Danubia Group plan to leverage Expo 2027 to showcase its innovations in logistics and what long-term benefits do you anticipate for Serbia’s logistics sector from this international event?
I think every Expo in every country has had a legacy, leaving behind infrastructure. An Expo is a great opportunity for many countries. When I last flew in from Europe, I could see the construction site from the plane and it was very impressive. It will boost the railways, highways and airports and will give Belgrade exposure as a tourist or investment destination. This is a unique opportunity for Serbia and one of the country’s greatest achievements in the last 20 years.
We have already been in touch with several companies around the world that need logistics support here in Serbia. The equipment that we will need onsite will be a major challenge for the local logistics industry, but also an opportunity to update and improve the way we work. The expo will bring more digitalization and change in the way we do business today. Over the next two years, customs procedures will be deeply changed by digitalization. This process is already under way and will be sped up by the expo.
Could you elaborate on your group’s priorities such as digitalization and sustainability and how these efforts align with your broader corporate social responsibility goals?
Danubia is investing heavily in digital solutions for our customers. Today’s customers want more visibility of where their cargo is and when it will arrive at its destination. Our future customers will be people who lived through the Covid pandemic and are very digitally literate. Shipping and logistics are very old industries arranged around bureaucracy and customs rules, with lots of paper-based documentation, so there are a lot of procedures that need to be digitized and will be very soon.
For four years we have been busy digitizing all our information so that we can provide real-time data about the status of shipments, whether they are being transported within Belgrade, or coming from Vietnam or Korea, so that we can share this information with our customers. This is going to be crucial to the customer experience of our industry, so we are focusing a lot of our investments here.
Another priority is sustainability. A few years ago, I decided to invest in railways and to keep metrics about our performance. If we change our offering to combine truck and railway with sea routes, we can measure the overall impact of the whole delivery. With this in mind we have started reafforestation projects in Serbia and Croatia to offset the carbon footprint of our operations. Our aim in the next few years is to plant 30,000 trees, which will offset everything down to the last mile.
What principles guide your selection and development of leaders within the Danubia Group? How does the company promote teamwork and empower women in the logistics sector?
I’m proud to say that women play a key role in our company. Half of our board members are women and we maintain awareness of these issues in our company culture. We have women in key positions in many of our companies and it is of utmost importance to us that the work environment allows our staff to feel empowered and can see a career path ahead of them. The leaders of two of our companies joined us when they were still university students. We are not a family company, but we try to instill a sense of togetherness in our workforce.
With growing economic ties between the US and Serbia, how is Danubia Group positioning itself towards American investors or partners and are there specific strategies aimed to build and enhance business relations with the US market?
We have many international investors who have invested in Serbia and see the US as one of their main markets. The most efficient way to ship a container from Serbia today is to go either to the Port of Rijeka in Croatia, or Piraeus Port in Greece. But either way you will need to travel through the Strait of Gibraltar to exit the Mediterranean. We are putting in place products that will connect Serbia with North European ports. At the same time, we are connecting with Mediterranean ports and connecting the Serbian market with North American ports, sustainably and by railway. This will yield the shortest transit times and the greatest reductions in CO2 emissions, which can vary a lot between a 10-day journey and a 25-day journey. This is something that we have been working on since 2023 and is almost ready to go live.
Serbia is becoming a very important investment destination, with a friendly environment, smooth operations, minimal bureaucracy and little geopolitical risk. With near-shoring and friend-shoring on the horizon, I think that Serbia is one of the best destinations in Europe.
You embarked on your own journey in the late 1990s with a vision to transform the logistics sector. What have been the most defining moments in your career?
Our greatest achievement has been to prove to the market that intermodality is possible. In the Balkan region, railways are often seen as unreliable. The first effort to connect Belgrade with the Port of Bar was in 1998. In 2014-15, when we were planning the coming 5 years, I had hoped to be where we are today. So, we have shown that railway inter-modality is possible and that railways can play a key role not only in the logistics of a country, but also in its economic development.
At the end of the day, the reason governments invest in railway infrastructure is not passenger traffic, but freight traffic. I believe that in the next 10 years, we will see more and more trains shipping cargo, not only through ports, but also to inland Europe. Thus, the trucking industry, which used to be the core business of our company, will slowly disappear from long routes and will instead be dedicated to shorter routes at the beginning and end of the journey. As well as being more targeted, it will be more sustainable, because of rising awareness. We need smoother processes where we do not spend days waiting at borders for customs to clear our goods. Railways allow these operations to take place in a more borderless environment.