Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the All Thoughts podcast.
Speaker 2: I'm Tracy Alloway.
Speaker 3: And I'm Joe Wysenthal.
Speaker 2: Joe, do you ever order stuff online?
Speaker 4: Yes?
Speaker 2: Don't mean just like Amazon day to day stuff. I
Speaker 2: mean like, do you go out looking for interesting things
Speaker 2: to buy online?
Speaker 3: Every run's a log at the edge. You know what
Speaker 3: I bought yesterday?
Speaker 2: What a guitar?
Speaker 3: No, I thought I have bought guitars online too many?
Speaker 4: Uh.
Speaker 3: A hat from the nineties from the Bureau of Reclamation
Speaker 3: celebrating like the fiftieth anniversary of the building of the
Speaker 3: Hoover Dam. Wait, and I'm going to win.
Speaker 2: I want one.
Speaker 3: Yeah, it's really it's a baseball cast. I'll show it
Speaker 3: to you after this. It's really cool. I'm gonna wear
Speaker 3: it at our next concert. I think it's really cool looking.
Speaker 2: I'm very jealous.
Speaker 3: Yeah, it's good ones.
Speaker 4: All right.
Speaker 2: Well, I buy stuff all the time. My husband does
Speaker 2: a similar thing and buys lots of vintage not baseball hats,
Speaker 2: but Rugby shirts.
Speaker 3: Oh it's cool.
Speaker 2: And the other day he ordered a Rugby shirt off
Speaker 2: of eBay and it showed up a few weeks later,
Speaker 2: and to both of our surprise, it had come from
Speaker 2: Ukraine and specifically a place called Zapporosia.
Speaker 3: Huh. And it was not like a Ukrainian jersey or
Speaker 3: something like that. It just happened to be sent for
Speaker 3: It happened to be sent from Ukraine. I can't remember
Speaker 3: exactly which jersey it was, but I was kind of
Speaker 3: surprised because it was in this like perfect little box.
Speaker 5: You know.
Speaker 2: It took a while to get to the US, but
Speaker 2: not an inordinate amount of time, and it piqued my
Speaker 2: interest and it got me thinking, how in the world
Speaker 2: is the Ukraine still shipping things in the middle of
Speaker 2: a military conflict.
Speaker 3: Yeah, I mean it's pretty striking.
Speaker 4: You know.
Speaker 3: We talked one time about palettes in the context of
Speaker 3: the war and this idea that like logistics is the
Speaker 3: key to keeping everything and going and good disciplined logistics,
Speaker 3: et cetera. But the idea that you could quickly get
Speaker 3: a pristine package from eBay to the US in the
Speaker 3: middle of an ongoing conflict does extraordinary and raises questions
Speaker 3: about like, how do you keep day to day operations
Speaker 3: of a sort of crucial delivery infrastructure such as postal service,
Speaker 3: whether shipping internationally or just shipping domestically, going under such
Speaker 3: extreme conditions.
Speaker 2: Right, and also, how does the role of the postal
Speaker 2: service actually change during wartime? I imagine shipping rugbys to my
Speaker 2: husband in the US is probably not an essential service
Speaker 2: at the moment, but Ukraine is using the postal service
Speaker 2: to send medicines and aids and cash and things like that.
Speaker 2: So we should talk about this. I'd love to, and
Speaker 2: I am very pleased to say we do, in fact
Speaker 2: have the perfect guest. We're going to be speaking with
Speaker 2: Igor Smolanski. He is the CEO of the Ukrainian National
Speaker 2: postal operator uker Pushta, and before heading Ukraine's postal service,
Speaker 2: he also worked at KPM and Boston Consulting Group. So
Speaker 2: really a perfect all thoughts guest, a supply chain expert
Speaker 2: with a side interest in finance. That's how I'm putting it.
Speaker 2: Let's do it all right, Igor, Thank you so much
Speaker 2: for coming on.
Speaker 4: All thoughts, Thank you for inviting me.
Speaker 2: So first of all, thank you for getting packages to me.
Speaker 2: I appreciate it, my husband appreciates it. I have since
Speaker 2: ordered things that came from Kiev as well, knowingly ordered
Speaker 2: stuff from Kiev, and those also came in pristine condition.
Speaker 2: Can you describe maybe just the challenges that the postal
Speaker 2: service is facing at the moment. How much have things
Speaker 2: changed now versus you know, pre twenty twenty two.
Speaker 5: I mean, obviously had changed a lot, Like as an example,
Speaker 5: we used to have five flights per week to New York,
Speaker 5: which would allow us to quickly deliver parcels to the US.
Speaker 5: And by the way, parcels to the US is about
Speaker 5: fifty percent of our expert volumes.
Speaker 4: Wow, over one point three.
Speaker 5: Million Ukrainian SQUS assault on Amazon, eBay and Etsy. Huh,
Speaker 5: So it's actually thousands of small businesses, jobs, people that
Speaker 5: do things for the dogs.
Speaker 4: Fashion Ukrainian fashion is very popular, things for the houses.
Speaker 5: So and we understood that if you stopped delivering, these
Speaker 5: people will lose their jobs.
Speaker 4: And you can imagine during the war you cannot get
Speaker 4: the jobs easily.
Speaker 5: And so we had to face in one day that
Speaker 5: there are normal flights, there are no flights from Ukraine.
Speaker 5: At the same time, if you don't deliver on time
Speaker 5: on eBay or Amazon or Etsy, you're eating as a
Speaker 5: seller drops.
Speaker 4: So which is.
Speaker 5: Why we had to do what we could to make
Speaker 5: sure things are delivered, and we moved to new logistical routes.
Speaker 5: So during the war, hopefully not that many people know it,
Speaker 5: but during the war you have a curfew which means
Speaker 5: you cannot drive at night, and usually the mail is
Speaker 5: delivered overnight.
Speaker 4: So we recalled that. Twenty five years ago we moved
Speaker 4: the mail via train.
Speaker 5: So I met with a friend of mine who's ahead
Speaker 5: of Ukrainian railways, and in five days.
Speaker 4: We're zoom moving a mail by a railway.
Speaker 5: So we're moving, for example, from Kiev to Leviev and
Speaker 5: from there we take the truck and it goes to
Speaker 5: Warsaw or Frankfort or London, and from there it flies
Speaker 5: to New York and then it's delivered to you.
Speaker 4: Right now.
Speaker 5: We strive to deliver to any points in the US
Speaker 5: within two weeks maximum, which means we have twenty four
Speaker 5: hours turned around in Ukraine, about two or three days
Speaker 5: on the road, and then it gets on the plane.
Speaker 4: It's challenging, but we're making things happen.
Speaker 5: So, for example, be a railway, we've already moved over
Speaker 5: twenty million parcels.
Speaker 3: Talk to us about the domestic need. I think you
Speaker 3: mentioned it's not just a postal service, but a pharmacy
Speaker 3: as well. Talk to us about the main internal priorities
Speaker 3: of delivering the mail.
Speaker 5: Sure, I mean Ukraine is the largest country in Europe,
Speaker 5: and not it's only the largest. There are twenty seven
Speaker 5: thousand cities and villages in Ukraine, and many of those
Speaker 5: very small, up to one hundred people or five hundred people.
Speaker 5: As you can imagine, during the war giving refugees, they
Speaker 5: did not get any larger. What it means is in
Speaker 5: those villages there are no pharmacists, there are no banks.
Speaker 5: Actually banks only remain in four percent of cities in
Speaker 5: villages in Ukraine, and you have to make sure these
Speaker 5: people do geir stuff. Plus, when we talk about the
Speaker 5: occupied areas, Russians destroyed the entire infrastructure, which means when
Speaker 5: Ukraine the occupies these villages for about five to six weeks,
Speaker 5: you don't have mobile connection, you don't have electricity. But
Speaker 5: we have to work because you cannot leave people in
Speaker 5: the vacuum. Not to mention, they would operate in Russian
Speaker 5: rubles and you want to bring them back to Ukraine,
Speaker 5: so you have to bring them Ukrainian currency and we
Speaker 5: at the first company they see, we usually come two
Speaker 5: three days.
Speaker 4: After the occupation.
Speaker 5: We just give time to the miners to demine the
Speaker 5: fields so we cantively safely operate and very structured our
Speaker 5: operations so we can work with or without power and electricity.
Speaker 4: Thanks to starting from Milan masks and.
Speaker 5: About fifteen hundred generators, we now have built a system
Speaker 5: which can work whenever under any conditions. So we had
Speaker 5: to change our processes to make sure we deliver pensions
Speaker 5: in cash because obviously if there are no electricity of
Speaker 5: ATM doesn't work, well, post terminal doesn't work. But people
Speaker 5: still need to live. I mean they have little bazaars,
Speaker 5: they work. So we basically create the ecosystem of life
Speaker 5: around those small villages and we keep it going.
Speaker 2: What's the labor situation like at the moment, I mean
Speaker 2: you mentioned d mining. It sounds like this is a
Speaker 2: risky job. Here in the US, we have a postal
Speaker 2: worker shortage, even without having to worry about military conflict.
Speaker 4: I mean it's a severe shortage. You can imagine.
Speaker 5: First of all, we have to separate mail and feel
Speaker 5: works right, and you can imagine there are many male
Speaker 5: populations in the army. Second, we have lots of refugees
Speaker 5: and so I mean we understand it's a big problem.
Speaker 5: So for example, now to attract personnel, we have to
Speaker 5: make sure that our offices are equipped for people with
Speaker 5: disabilities so we can get them to work. We're trying
Speaker 5: the best we can to implement automatic sorting lines.
Speaker 4: Our goal for this ya.
Speaker 5: I know it sounds weird during the war, but we
Speaker 5: want to be one hundred percent digital even when there's
Speaker 5: no digital meaning we build a system where in the
Speaker 5: morning our mail carriers will download through startling and generators
Speaker 5: the data worker during the day and then upload the
Speaker 5: data at night, which means again we are not dependent
Speaker 5: on the infrastructure. If rustions you know, shut down the
Speaker 5: electricity or mobile or anything.
Speaker 4: So we're doing.
Speaker 5: Our best to increase efficiency to maintain as normal life
Speaker 5: for people as possible.
Speaker 4: Why, you can.
Speaker 5: Imagine there is no rush of new stores opening in
Speaker 5: Ukraine right now, there are no rush of new banks
Speaker 5: and pharmacies. So the e commerce becomes this tool to
Speaker 5: maintain a sense of normalcy even on the front lines.
Speaker 5: So for example, we have lots of soldiers that would
Speaker 5: order something on Amazon or on Alibaba, power bank or
Speaker 5: the sacks or stuff for whatever they need and they'll delivered,
Speaker 5: So you know, the e commerce becomes the tool to
Speaker 5: keep you connected to the world even when the world
Speaker 5: is in a difficult situation.
Speaker 3: I'm actually curious you mentioned starlink. I don't know that
Speaker 3: much about it, but I'm curious. Are there efficiency gains
Speaker 3: or infrastructure gains that you've discovered with the use of
Speaker 3: starlink satellite internet such that when there's a proper rebuilding
Speaker 3: phase that there are things that will never have to
Speaker 3: be rebuilt in their original form because of I guess
Speaker 3: they say some sort of leap frogging or efficiency that
Speaker 3: you've discovered out of this period of dress good question.
Speaker 5: No, absolutely, I mean, you know, we don't want to
Speaker 5: discuss Elon and his views, but the Starling has been
Speaker 5: really a saber to us. You won't be able to
Speaker 5: run internet cables in those areas, right, I mean, it
Speaker 5: just will be millions of dollars. Probably it will run
Speaker 5: through the field which you need to demine, and then
Speaker 5: Russians can vum it again and it can.
Speaker 4: Go off, et cetera.
Speaker 5: So via Starling you're flexible enough, then you well, when
Speaker 5: you combine Starling and the generator, when you combine the two,
Speaker 5: you're basically no longer dependent on the central infrastructure and
Speaker 5: you can provide civil height services right away, not you know,
Speaker 5: not five months after the occupation, not three months after
Speaker 5: Russian destroyed the buildings today like for example, it was
Speaker 5: in our case, so very built it. They put up
Speaker 5: the startling generator and they get back to work. So
Speaker 5: you know, it's like a theory of broken windows. You
Speaker 5: cannot have that. You should have the services, and the
Speaker 5: starlink allows you to have that connection to the world.
Speaker 2: So I take the point about starlink and also switching
Speaker 2: from driving the mail to going by rail. But there
Speaker 2: must be areas that you just cannot get mail to
Speaker 2: at the moment, I mean the occupied areas for instance,
Speaker 2: how widespread are those I guess pockets of non service?
Speaker 5: I mean roughly twenty percent of Ukrainian territories occupied by Russians.
Speaker 5: We try to be creative. If you talk strictly about
Speaker 5: the law, there is a Geneva Convention, so if Russia
Speaker 5: occupies certain area, they're responsible for wellbeing of people there. Obviously,
Speaker 5: annoying Russia the world responsible is you know exaggeration. So
Speaker 5: for example, in her song when her son was occupied
Speaker 5: by Russians. We wanted to keep Ukrainian pensions going because
Speaker 5: we wanted.
Speaker 4: People feel the part of Ukraine.
Speaker 5: So what we've done is, for example, we knew we
Speaker 5: could not get cash to the occupied area. What we did,
Speaker 5: for example, we agreed to small shops like in a
Speaker 5: bakery shop or gas stations or barbershops that they would
Speaker 5: give us cash and we would pay the bills in
Speaker 5: Ukrainian territories and we would use that cash to pay
Speaker 5: you know, grand grandma and grandpa the attensions, so they
Speaker 5: would come back again to the store. And this way
Speaker 5: we kept Grivna operation Ukrainian currency going even under Nursian occupation.
Speaker 5: They did not understand how the grin uh you know,
Speaker 5: got to the occupied area. But you know, when youre
Speaker 5: creative enough even make things happen.
Speaker 3: How do you protect cash? I mean, obviously in the
Speaker 3: US and we have the instructions and there's a whole
Speaker 3: separate infrastructure for cash management that's separate from the normal
Speaker 3: postal service and their guards on the trucks and all
Speaker 3: that has cash delivery always been an important role that
Speaker 3: the postal service is played in Ukraine. And how do
Speaker 3: you think about protecting those packages versus sort of more
Speaker 3: normal mail.
Speaker 4: No. Absolutely, they always been important.
Speaker 5: Why because you know, in small villages, if you don't
Speaker 5: have banking infrastructure, the cash is the king in you know,
Speaker 5: in reality, because if for example, if you have a
Speaker 5: bank card but no way to use it, you're not going.
Speaker 4: To use it, so you're going to stay in cash.
Speaker 5: We always had, I mean, we have lots of people
Speaker 5: with guns to protect it. When we talk about the
Speaker 5: areas close to the front lines, we get help from
Speaker 5: the army that you know basically drives is our trucks
Speaker 5: to make sure they're protected and make sure we delivered.
Speaker 5: So we have the whole entire system of controls, of
Speaker 5: monitoring of our armed guards to help.
Speaker 4: Us deliver deliver cash.
Speaker 5: I mean, that's the reason I've set a goal to
Speaker 5: build one hundred percent digital infrastructure and every single village
Speaker 5: so we can reduce the cash. So for example, right
Speaker 5: now in the village, you cannot use the bank card.
Speaker 5: We are now trying to get the banking license and
Speaker 5: certain basically devices that we're building that people will be
Speaker 5: able to use banking and e commerce infrastructure and every
Speaker 5: single village. You know, basically it's like ecosystems. So right
Speaker 5: now we pay pension in cash. You know, you get
Speaker 5: your retirement payments in cash, and then you pay us
Speaker 5: for utility bills, you pays for the food, you pays
Speaker 5: for the medicine. So we can convert all of it
Speaker 5: into a none cash format. Will it happen right away now?
Speaker 5: But slowly once we build this digital infrastructure we can.
Speaker 2: That reminds me a project like that, it sounds like
Speaker 2: it costs money, So how is that being financed? And
Speaker 2: then more broadly, how is uker post a finance Because
Speaker 2: here in the US there is a perpetual, ongoing discussion
Speaker 2: over the financial health of the US postal service and
Speaker 2: whether it should be treated like a private enterprise or
Speaker 2: a public service. I'm curious how it's done in Ukraine.
Speaker 5: Well, I mean, coming from the US, you know, I'm
Speaker 5: a big proponent of a non socialist way of working.
Speaker 5: So the more independent you are from the government, the
Speaker 5: most successful you are. So in Ukraine we are a
Speaker 5: joint stock company where we are not financed by the government.
Speaker 4: We're actually paying dividends to the government.
Speaker 5: So anything we do, even during the war, we have
Speaker 5: to finance ourselves.
Speaker 4: One of the reasons.
Speaker 5: We went to the Parliament and we had asked to
Speaker 5: reduce regulation. So, for example, in Ukraine, only first class
Speaker 5: mail is now regulated, So only the first class letters
Speaker 5: are regulated by the government, meaning the tariffs and the newspapers.
Speaker 5: Everything else is a market base, which means we set
Speaker 5: the tariffs which we believe cover our cost plus.
Speaker 4: Profit, and that's how we finance separation.
Speaker 5: So our goal is to reduce number of state related
Speaker 5: revenues to less than ten percent.
Speaker 3: You know, I was reading something not in preparation for
Speaker 3: this episode specifically, I was actually but I was reading
Speaker 3: a little bit recently about US postal history and the
Speaker 3: importance of the US post office and US industrial development.
Speaker 3: And you know, a post office obviously has a postal service,
Speaker 3: obviously has a distinct, unique perspective on the sort of
Speaker 3: geography and territory of a population, and you probably have
Speaker 3: some of the best visibility on where people are at
Speaker 3: any given moment. And the name of every road, the
Speaker 3: name of every address, how valuable is the information that
Speaker 3: must be contained within your organization into the broader I
Speaker 3: guess war effort right now of the government, even if
Speaker 3: it is sort of formerly disconnected. The sort of ability
Speaker 3: of the government to essentially have the insight that only
Speaker 3: a postal service can have about where people are at
Speaker 3: any given moment.
Speaker 4: I mean in the more than the world.
Speaker 5: Obviously, there are different ways of getting that information. Probably
Speaker 5: the most reliable is the mobile operators, because vis signal
Speaker 5: you can exactly say how many people are in the
Speaker 5: area in any particular point, and even track.
Speaker 4: Down how they move.
Speaker 5: Obviously, we're probably the next best choice because we physically
Speaker 5: see people, We know how many are there, we know
Speaker 5: the age, so compared to the mobile operators, where they
Speaker 5: just track the signal, we actually know that for example,
Speaker 5: people here older, or people here on retirement, or here
Speaker 5: it's a younger population, because you know, for example, you
Speaker 5: have five hundred and hundred people in two villages, but
Speaker 5: one can have all the people on retirement and the
Speaker 5: other can have people of the younger age. For example
Speaker 5: it's a farming village. So we have a better.
Speaker 4: Understanding of the economy of a particular area of.
Speaker 5: Particular or how fast people are coming back. We see it,
Speaker 5: for example, in how they pay utility bills, because for example,
Speaker 5: you can pay utility bills online even when you left
Speaker 5: the create right you can be right now in New
Speaker 5: York as a refugee and paying your electricity bill online,
Speaker 5: which means if you just track down the payments, you
Speaker 5: won't be able to see what the person is actually
Speaker 5: in the village. Look in Harky, Finzo, Parisia or there
Speaker 5: in New York. We know when we take the payments,
Speaker 5: we know exactly how many people are there, because when
Speaker 5: we bring utunity bills, we know they are received or not.
Speaker 2: I mean, it does sound like you are working closely
Speaker 2: with the Ukrainian military. So you mentioned the demining operations,
Speaker 2: armed escorts in some cases, I imagine that wasn't the case
Speaker 2: pre twenty twenty two. Could you maybe talk about how
Speaker 2: you built up that relationship with the military, Like what
Speaker 2: were those conversations actually like and how do you start
Speaker 2: formalizing a structure of cooperation or information sharing.
Speaker 5: I think that's where Ukraine is stronger than Russia. Russia
Speaker 5: is all about vertical rules and all about you know,
Speaker 5: rules written, there's one sar and then you go all
Speaker 5: the way down. So the reason Ukraine was overcoming Russia
Speaker 5: at the beginning because we are flexible. For example, our
Speaker 5: million thy commanders have a right to make decisions. Russians don't.
Speaker 5: I even had to negotiate with Russians. It's impossible. They
Speaker 5: don't make any decisions on the ground. Every time they
Speaker 5: have to check this mascot. So Uoker POSTA was working
Speaker 5: from day one throughout the war. The only day we
Speaker 5: did not work was February twenty fourth because I stopped
Speaker 5: all the operations because I could not understand what I
Speaker 5: can do to secure lives of people. Every single day
Speaker 5: thereafter we continue to work, never stopped, and my day starts.
Speaker 4: We designed the procedure where my day starts.
Speaker 5: We check with the military where it's safe or not
Speaker 5: safe today to deliver. We unfortunately lost a few lives
Speaker 5: because we thought it was safe and the military thought
Speaker 5: was saved. But Russians extended too fast the first days
Speaker 5: of the war and we lost a.
Speaker 4: Few people because they attacked.
Speaker 5: So it's a standard procedure where we check with them
Speaker 5: house the situation on the ground today, where do they
Speaker 5: think it's okay to go and where we should for example,
Speaker 5: se the operations. I just an hour ago I got
Speaker 5: a note from the military in Highkief region that we
Speaker 5: should not go near certain areas today because it will
Speaker 5: be dangerous. And that's how we work in you know, chats,
Speaker 5: in messengers, in communication where you have to quickly make
Speaker 5: a decision. The most difficult part was, you know, it's
Speaker 5: a war, so where do you delegate and where you
Speaker 5: make decisions like in the army. So I had to
Speaker 5: find the balance between decisions that I make and I
Speaker 5: am physically able to make.
Speaker 4: Because in terms of the US, we have like twenty.
Speaker 5: Four states, so I had to make decisions each each
Speaker 5: and every one of them, and where do they delegate?
Speaker 5: So I build a system where I have kedo regions
Speaker 5: and they allow to make certain decisions, certain decisions. They
Speaker 5: have to agree with me in different messengers you know, signal, telegram,
Speaker 5: et cetera, and we make it quickly and then we go.
Speaker 5: So we're trying to be as informal as possible and
Speaker 5: as efficient as possible.
Speaker 3: Going back to some of the external aspects and how
Speaker 3: we started this conversation and you mentioned that, did you
Speaker 3: see fifty percent of Ukrainian exports are to the US,
Speaker 3: And you know there's so much conversation about commodities exports,
Speaker 3: particularly wheat and sover but in terms of actual value,
Speaker 3: half of it is sort of various sales of goods
Speaker 3: to the US.
Speaker 4: You know, it's the postal experts so to speak, you know,
Speaker 4: e commerce.
Speaker 3: Opt pocastal experts.
Speaker 4: Yeah, it's e commerce mainly.
Speaker 5: You know, if you know it, it has to be
Speaker 5: only handmade, right, so it cannot be mass produced. So
Speaker 5: it's the handmade things. Not sure whether they you know,
Speaker 5: the baseball sir was handmade.
Speaker 4: But it wasn't.
Speaker 2: But I am aware. On Etsy there's like amazing handmade
Speaker 2: like fabrics and embroidery that come from Ukraine. Dog clothes.
Speaker 2: I'm not saying I'm buying dog clothes for my core hey,
Speaker 2: but I know they are there.
Speaker 3: But I also noticed that on your website you have
Speaker 3: there's a whole section right on the front page start
Speaker 3: a successful International Business, and it has guides and videos
Speaker 3: like how to set up a business and sell on Etsy,
Speaker 3: how do you set up a business and new Shopify?
Speaker 3: So right there, Like, have these long been things or
Speaker 3: is this something that you helped accelerate and implement or
Speaker 3: has this been a long part of one of the
Speaker 3: services that the post office focuses on.
Speaker 4: No, I mean it's actually the project we're very proud of.
Speaker 5: We actually got award as the best sustainable postal operator
Speaker 5: in the world because that's how we get people. Imagine
Speaker 5: people in the smallest village sometimes they do wedding dresses
Speaker 5: for five thousand dollars and sell it in uk or
Speaker 5: in the US.
Speaker 4: You can imagine it's a huge part of the local economy.
Speaker 5: Or right now, many of our military guys in the trenches,
Speaker 5: they dream after the victory to set up their own business.
Speaker 5: So they're watching those videos in the trenches and think
Speaker 5: about the business that they will open once day back.
Speaker 5: So you know, it's a huge part of the success,
Speaker 5: and we plan to extend this project, especially for example,
Speaker 5: for people with disabilities. You can imagine Ukraine losing a
Speaker 5: lot of people, you know, people losing limbs in the war.
Speaker 5: But they can work from home, they can set up shop,
Speaker 5: they can do this embroidery at home. We can send
Speaker 5: the courier to pick it up and they sell it
Speaker 5: on Edsy.
Speaker 4: So they don't.
Speaker 5: Feel like they have to get social subjects. They feel
Speaker 5: like a part of the society. So you know, it's
Speaker 5: very important. That's why we understand how important it is
Speaker 5: for us to deliver quickly the kind of hope. No, No,
Speaker 5: it's been two years. As I'm trying to launch a
Speaker 5: postal training to Europe. So for example, I can get
Speaker 5: down the time to deliver to the s to seven days,
Speaker 5: so I'll get to for example, overnight from Kiev to Warsaw,
Speaker 5: and from Warsaw the plane will fly to New York
Speaker 5: and you will have the shorts not on floteen days,
Speaker 5: but in seven. That's a sort of our goal and
Speaker 5: we're trying to strive it. But it's been a part
Speaker 5: of our work for a long time. Some of it
Speaker 5: has been helped by the war. Because you probably heard
Speaker 5: about how famous stems I was about.
Speaker 2: As speaking of new businesses, you also sort of have
Speaker 2: one in the form of these new edition stamps.
Speaker 4: Yep.
Speaker 5: And we actually got the price from eBay as the
Speaker 5: rising Star because we maintained delivery standards global worldwide.
Speaker 4: We sold millions of stamps.
Speaker 5: We had the joke I met with the Postmaster General
Speaker 5: in the US and he joked that we probably the
Speaker 5: only postal service that makes money on the stems.
Speaker 2: We talked to us about the design of the stamps.
Speaker 2: Describe maybe the most famous one.
Speaker 5: Well, the most famous obviously is Russian worship.
Speaker 4: Go f yourself.
Speaker 5: You know, we're breaking any possible rule there is in philately,
Speaker 5: so we're doing the stamps. Usually the postal service has
Speaker 5: like two year plan to issue stamps and we don't.
Speaker 4: We just issued them. So for example, when Ukraine bummed the.
Speaker 5: Russian crimea bridge, we issued stamp in one hour, which
Speaker 5: tend Russian TV to believe we knew about the operation.
Speaker 4: And prepare the stamp in advance. I mean, I've just
Speaker 4: lit it.
Speaker 5: And there are some other stems like the Russian Moscow ships,
Speaker 5: so we issued stamp and then.
Speaker 4: The ships was three days after, you know, but it helps.
Speaker 5: Yeah, we precede some of the events. Let's put it
Speaker 5: this way. Screaming a bridge. We have a few more surprises,
Speaker 5: we have sixteens and other things. But you know, it's
Speaker 5: a huge moral boost and it's a good part of
Speaker 5: the revenue for us. It's an image of Ukraine. We
Speaker 5: had the only postal service that has our own stores
Speaker 5: on Amazon and eBay, so you can check there's only one.
Speaker 5: It's just for our postal operator, and we have global sales.
Speaker 5: People come from all over the world to our stores
Speaker 5: buying the stamps and we ship them and given the
Speaker 5: ratings we have, we deliver it within very short periods
Speaker 5: of time.
Speaker 2: Joe, I have to say, I think the Russian warship
Speaker 2: Go f Yourself stamped. That must be the only stamp
Speaker 2: in the world that has a depiction of a middle finger.
Speaker 2: I think I could be wrong, Yeah, but I would guess.
Speaker 5: Well, we made it to the Daily Show, so you
Speaker 5: know it probably was the only stamp that made that.
Speaker 3: Let's talk more about the mail by rail, and you
Speaker 3: mentioned in the beginning that you know, there used to
Speaker 3: be several flights direct to New York each week and
Speaker 3: owother or none, and so you have to go by rail.
Speaker 3: What happens at the border? What are the challenges? Just
Speaker 3: sort of the nuts and bolts, so to speak, of
Speaker 3: establishing that link between Ukraine and Frankfurt.
Speaker 5: I mean, obviously the main challenge is that, you know,
Speaker 5: the border was made for the trucks, and the huge
Speaker 5: part of the Ukrainian experts and imports was done by
Speaker 5: the sea, because Ukraine is the sea country, right we
Speaker 5: have a black Sea was done by air and once
Speaker 5: that was canceled by the war, imagined the entire flow,
Speaker 5: including the military aid and military supplies had.
Speaker 4: To go through the small window of few roads.
Speaker 5: To Europe, which by the way, obviously everyone was concerned
Speaker 5: that Russians will bump and the railway, so you left
Speaker 5: to two choices and you had to squeeze the entire
Speaker 5: volume through those few roads to Poland, to Romania, to Slovakia, etc.
Speaker 5: So that's the challenge remains, it will remain going forward.
Speaker 5: I do hope that we win soon and imagine during
Speaker 5: the reconstruction the flow will increase several times, but the
Speaker 5: roads won't, which is why we're trying to do the
Speaker 5: best the best we can to move certain clothes to
Speaker 5: railway because railway is more efficient, you don't have to
Speaker 5: stay online in the border, and you can basically run
Speaker 5: on schedule. So the reason we've been so successful because
Speaker 5: we connected our postal cars not to the carget trains,
Speaker 5: but to passenger trains, and passenger trains you can imagine
Speaker 5: run on schedule, so it allows us strict predictability as
Speaker 5: to when your parcels will arrive when we have to
Speaker 5: unload it.
Speaker 2: And really, what's been the most creative solution that you've
Speaker 2: deployed during this time period, Like is there a particular
Speaker 2: workaround or decision that you're especially proud of.
Speaker 4: The two things.
Speaker 5: One is the system that we built with the Startlings
Speaker 5: and the generators, and the second is the combined logistical
Speaker 5: chain train car plane to make sure that we delivered
Speaker 5: across the globe. I think that was the key. We
Speaker 5: use it at the beginning of the war to bring
Speaker 5: back to Ukraine humanitarian needs for example, which chartered the
Speaker 5: plane during the first week of the war, which chartered
Speaker 5: our own plane in Poland, and we brought all those
Speaker 5: parcels to New York and obviously we did not have
Speaker 5: that big of a flow on the way back, so
Speaker 5: well loaded that plane with humanitarian systems, with medical supplies,
Speaker 5: some of the military supplies. So we use you know,
Speaker 5: we don't fly empty and we use the most efficient
Speaker 5: way of transporting it.
Speaker 3: You mentioned that other than first class mail and newspapers,
Speaker 3: your pricing is totally deregulated. Can you talk about some
Speaker 3: of the decisions that you've made around pricing. Are there
Speaker 3: certain types of goods? Is it sizes? Like how did
Speaker 3: you are there? There must be low priority things that
Speaker 3: you sort of like want to discourage people from using
Speaker 3: your capacity. Talk to us about like some of the
Speaker 3: decisions you've made around pricing and how the war has
Speaker 3: changed those.
Speaker 4: There are a few things.
Speaker 5: Ukraine is a very competitive market, so we have analog
Speaker 5: of FedEx and UPS which are dominating the market. So
Speaker 5: that was our argument to the regulators. Why want to
Speaker 5: regulate us when the market will.
Speaker 4: Take care of ourselves. That's the first thing.
Speaker 5: Second, what we learn is, you know, if at the
Speaker 5: beginning of the war, people were thankful for us that
Speaker 5: we in generally work, right, because when I talk to
Speaker 5: my colleagues and other postal services, they amaze that we
Speaker 5: in generally work and that will probably last for.
Speaker 4: About a few months. But then people move from okay,
Speaker 4: thank you for working.
Speaker 5: Now I want my next day delivery, and you know,
Speaker 5: the expectations grow, which means we have to deliver. We
Speaker 5: have two sets of tariff, which is next day and
Speaker 5: two five days.
Speaker 4: To make sure we distinguish between between.
Speaker 5: Cheap goods and I guess more immediate needs which people
Speaker 5: need fast. So that's our sort of value proposition that
Speaker 5: you can choose. Our competitors have only one tariff, so
Speaker 5: it's just expressed as the next day. So imagine how
Speaker 5: competitive the market is even during the war we're striving
Speaker 5: to achieve next day delivery, even the country as large.
Speaker 4: As in Ukraine.
Speaker 5: So for example, for me to deliver from Ushgrad, which
Speaker 5: is close to Poland and Hungary, to Pakrofsk, which is
Speaker 5: close to the front line, we're using the truck to
Speaker 5: take it to Vive, loaded on the train, the train
Speaker 5: brings it.
Speaker 4: To NeuPro At ten am.
Speaker 5: We sorted for two hours, we get it on truck
Speaker 5: and the three pm it's in Pa Crops, which is
Speaker 5: the other side of Ukraine.
Speaker 4: I think a few thousand kilometers.
Speaker 5: But again that's what people expect and that's what we
Speaker 5: need to delive.
Speaker 4: We just try to price it. I mean, in general
Speaker 4: it's very cheap.
Speaker 5: So for example, it's like one dollar next day delivery
Speaker 5: for up to one killer.
Speaker 2: Do you get any pushback from people in terms of
Speaker 2: price increases or is it generally accepted that these are
Speaker 2: exceptional times and so the price is sort of justified.
Speaker 5: You know, it depends on the price. So for example,
Speaker 5: when person pays five hundred dollars for a computer, do
Speaker 5: they really care whether delivery is three dollars to five dollars.
Speaker 4: No, they don't. They want it to be delivered next day.
Speaker 5: If it's a mom that you know, moms exchanging clothes
Speaker 5: for the kids, they're okay to wait. Or if it's
Speaker 5: a medicine, So if it's a medicine that you need
Speaker 5: the next day because you're really seek we need to
Speaker 5: deliver next day.
Speaker 4: If you have some kind.
Speaker 5: Of chronicle illness and you get your medicine every month
Speaker 5: the same day, we can plant it in advance, right,
Speaker 5: so we can. The reason we have to be flexible
Speaker 5: is we offer the client to choice. You can pick
Speaker 5: cheap or you can pick more expensive, depending what fits
Speaker 5: you need. But people do want quality, know e commerce,
Speaker 5: it's an immediate gratification, So I ordered today, I want
Speaker 5: to get it tomorrow, even if it's a war.
Speaker 3: You know, obviously we're having this conversation about the extraordinary
Speaker 3: challenges of delivering the mail during a war. When the
Speaker 3: war started, the entire world was still in the throes
Speaker 3: of the broader I guess supply chain crisis Spring twenty
Speaker 3: twenty two. Who's still all kinds of parts for every
Speaker 3: type of thing we're missing? And palette scarcity, container scarcity
Speaker 3: due to COVID and everything. How did that affect you
Speaker 3: and what have you seen on that front since then
Speaker 3: in terms of parts that you need, equipment that you
Speaker 3: need and so for just to run your operation.
Speaker 5: You know, I thought we prepared during COVID and we adopted,
Speaker 5: but then when the war starts, the situation becomes even worse.
Speaker 5: For example, we've been buying trucks from Belarus. Now Belarus
Speaker 5: is an enemy. Yeah, how do you get the parts
Speaker 5: for the trucks? How do you get the parts for
Speaker 5: Russian drugs? We're now running a procurement for the new trucks.
Speaker 5: The issues do you let China company participate or you don't?
Speaker 5: Do you let them participate if they stay in Russia?
Speaker 5: Do you deal with companies that stay in Russia? So
Speaker 5: you know, you have much wider range of issues that
Speaker 5: we need.
Speaker 4: To handle and make a strategic decision on.
Speaker 5: I mean, we made a strategic decision that we have
Speaker 5: to get rid of Russian made vehicles as soon as possible.
Speaker 5: We made a strategic decision that is probably not a
Speaker 5: good idea to have trucks from China because if tomorrow
Speaker 5: they become, you know, big friends with Russia, we don't
Speaker 5: We're not going to get parts and we're just going
Speaker 5: to be stuck, so you have to think a few
Speaker 5: steps in advance. We're buying some other equipment from China,
Speaker 5: which we think strategically will not be endanger our operations,
Speaker 5: but we'll learned that in the modern world, as you
Speaker 5: correctly pointed out, you know, would be various of things
Speaker 5: affecting the supply chain.
Speaker 2: Igor Smeliansky of ukar Posha, thank you so much for
Speaker 2: coming on odd Lots. That was such a fascinating conversation.
Speaker 4: Thank you very much for having me.
Speaker 2: So Joe. I found that an absolutely fascinating conversation. Not
Speaker 2: to get really philosophical, but the theme that kind of
Speaker 2: jumped out at me is it's sort of like simultaneously
Speaker 2: globalized and also deglobalized. There's nothing more deglobalized than war
Speaker 2: and a country invading another country, it feels like. But
Speaker 2: at the same time, hearing Igor describe the importance of
Speaker 2: e commerce to the Ukrainian economy, the idea that there
Speaker 2: are soldiers in the trenches who are coming up with
Speaker 2: business plans for a small business on Etsy is it
Speaker 2: kind of blows your mind in some ways. And there's
Speaker 2: such a tension there between the war zone and then
Speaker 2: that like globalize. You order something online, you expected to
Speaker 2: get it the next day, kind of aspect of the economy.
Speaker 3: Yeah, thinking about villagers in Ukraine going online and figuring
Speaker 3: out how to set up a at sea shop or
Speaker 3: an Amazon shop or your shopify makes the world feel
Speaker 3: very small and feel very familiar, And so I thought
Speaker 3: that was striking. Also the idea of you know, starlink
Speaker 3: and how crucial that's been and that you can sort
Speaker 3: of essentially, as you put it, seemingly in a day
Speaker 3: or to recreate destroyed infrastructure with a combination of starlink
Speaker 3: and generators, and you have to imagine that like some
Speaker 3: of that will become the norm. I don't like the generator,
Speaker 3: you know, I think.
Speaker 2: They probably not the generator, right, But like the.
Speaker 3: Idea of like, well, will you really rebuild an entire
Speaker 3: wired infrastructure if satellite internet works? Well, like that's like
Speaker 3: really sort of interesting. You could see how that could
Speaker 3: like reshape society or reshape.
Speaker 2: Infrastruct Yeah, I'm glad you asked that leapfrogging question because
Speaker 2: it sounds like that's kind of what's happening or what
Speaker 2: could happen once reconstruction actually begins. But overall, super interesting conversation.
Speaker 2: The switch from driving the mail to rail was really interesting.
Speaker 2: Just the idea of I guess post office workers who
Speaker 2: are having to think about stuff like minds on a
Speaker 2: day to day basis and communicate with the military about
Speaker 2: where is safe to go pretty interesting times. Yes, and
Speaker 2: I should just mention Joe if anyone is interested in
Speaker 2: learning more about Uker Poshta and how Ukraine is delivering
Speaker 2: the mail at the moment. There was a really brilliant
Speaker 2: profile of Igor by our Bloomberg colleague Todd Shields. I
Speaker 2: think it came out in twenty twenty two. You should
Speaker 2: definitely go check that out. And a big thank you
Speaker 2: to Todd as well for helping us arrange this interview
Speaker 2: and putting us in touch with Igor in the first place.
Speaker 2: Shall we leave it there, Let's leave it there. Okay.
Speaker 2: This has been another episode of the Odd Thoughts podcast.
Speaker 2: I'm Tracy. You can follow me at Tracy Alloway.
Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 3: Follow our guest Igor smel Yansky. He's at smel Yansky Igor.
Speaker 3: Follow our producers Carmen Rodriguez at Carmen Arman Dashel Bennett
Speaker 3: at Dashbot and kel Brooks at Kelbrooks. Thank you to
Speaker 3: our producer, Moses Ondam. Form more Oddlogscontent, go to Bloomberg
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Speaker 4: In