Odd Lots - How Ukraine Delivers the Mail During Wartime

Episode Date: February 23, 2024

If you order something from Ukraine right now, be it a T-shirt or a vintage Christmas ornament, chances are it will arrive on time and in good shape. Not only is the country's mail service still operating, even as it grapples with an invasion by Russia, but the role of the post office has also changed. The mail has become a lifeline for Ukrainians who rely on it to receive pension payments, medicine, or to run online businesses as domestic jobs get disrupted. So how exactly is the Ukrainian mail system working right now? What operational and logistical changes has it had to make to keep going, and what does the service's future look like? In this episode, we speak with Igor Smelyansky, the CEO of Ukrposhta, about delivering the mail during a time of war.See omnystudio.com/listener for privacy information.

Thanks for listening to OddLots. Follow the show on Amazon Music for more future episodes or just ask Alexa play the podcast, OddLots on Amazon Music. Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the All Thoughts podcast. I'm Tracy Allo. And I'm Joe Wisenthall. Joe, do you ever order stuff online? I don't mean just like Amazon day-to-day stuff. I mean like do you go out looking for interviews? things to buy online. Every once in a while, I get the edge. You know what I bought yesterday? What?

A guitar. No, I don't I have bought guitars online. Too many. A hat from the 90s from the Bureau of Reclamation celebrating like the 50th anniversary of the building of the Hoover Dam. Wait. And I'm going to wear it. It's a baseball cap.

I'll show it to you after this. It's really cool. I'm going to wear it at our next concert, I think. It's really cool looking. I am very jealous. Yeah, it's a good one. All right. Well, I buy stuff all the time.

My husband does a similar thing and buys lots of vintage, not baseball hats, but rugby shirts. Oh, that's cool. And the other day, he ordered a rugby shirt off of eBay, and it showed up a few weeks later. And to both of our surprise, it had come from Ukraine and specifically a place called Zaporoja. Huh. And it was not like a Ukrainian jersey or something like that. It just happened to be sent from it. It happened to be sent from Ukraine.

I can't remember exactly which jersey it was. was. But I was kind of surprised because it was in this like perfect little box. You know, it took a while to get to the U.S. but not an inordinate amount of time. And it peaked my interest and it got me thinking, how in the world is Ukraine still shipping things in the middle of a military conflict? Yeah. I mean, it's pretty striking. You know, we talked one time about pallets in the context of the war and this idea that like logistics is the key to keeping everything going in good, logistics, et cetera. But the idea that you could quickly get a pristine package from eBay to the U.S. in the middle of an ongoing conflict, does extraordinary raise this questions about, like,

how do you keep day-to-day operations of a sort of crucial delivery infrastructure, such as Postal Service, whether shipping internationally or just shipping domestically going under such extreme conditions? Right. And also, how does the role of the Postal Service actually change during the war time? I imagine shipping rugby to my husband. in the U.S. is probably not an essential service at the moment, but Ukraine is using the Postal Service to send medicines and AIDS and cash and things like that. So we should talk about this. I'd love to. And I am very pleased to say we do, in fact, have the perfect guest. We're going to be speaking with Igor Smoliansky. He is the CEO of the Ukrainian national postal operator,

Ucroposte. And before heading Ukraine's Postal Service, he also worked at KPMG and Boston Consulting. group. So really a perfect all-thoughts guest, a supply chain expert with a side interest in finance. That's how I'm putting it. Let's do it. All right. Igor, thank you so much for coming on all thoughts. Thank you for inviting me. So first of all, thank you for getting packages to me. I appreciate it. My husband appreciates it. I have since ordered things that came from Kiev as well, knowingly ordered stuff from Kiev, and those also came in pristine condition. Can you describe maybe just the challenges that the Postal Service is facing at the moment? How much have things changed now versus, you know, pre-2020? I mean, obviously it had changed a lot. Like, as an example,

we used to have five flights per week to New York, which would allow us to quickly deliver parcels to the U.S. And by the way, parcels to the U.S. is about 50% of our export volumes. Wow. Over 1.3 million Ukrainian SKUs are sold on Amazon, even. by an Etsy. So it's actually thousands of small businesses jobs. People that do things for the dogs, fashion, Ukrainian fashion is very popular things for the houses. And we understood that if you stop delivering, these people will lose their jobs. And you can imagine during the war, you cannot get the jobs easily. And so we had to face in one day that there are no more flights. There are no flights from Ukraine. At the same time, if you don't deliver on time on eBay or Amazon or Etsy, your rating as a seller drops.

Which is why we had to do what we could to make sure things are delivered. And we moved to new logistical routes. So during the war, hopefully not that many people know it, but during the war, you have a curfew, which means you cannot drive at night. And usually the mail is delivered overnight. So we recalled that 25 years ago, we moved the mail via train. So I met with a friend of mine who was the head of Ukrainian railways, and in five days, we resume moving a mail-bail railway.

So we're moving, for example, from Kiev to Leviv, and from there we take the truck, and it goes to Warsaw or Frankfurt or London, and from there it flies to New York, and then it's delivered to you. Right now, we strive to deliver to any point. in the US within two weeks maximum, which means we have 24 hours turn around in Ukraine, about two, three days on the road, and then it gets on the plane. It's challenging, but we're making things happen. So, for example, via railway, we already moved over 20 million parcels. Talk to us about the domestic needs. I think you mentioned it's not just a postal service,

but a pharmacy as well. Talk to us about the main internal priorities of delivering the mail. Sure. I mean, Ukraine is the largest country in Europe. And not its only largest, there are 27,000 cities and villages in Ukraine. And many of those very small, up to 100 people or 500 people. As you can imagine during the war, giving refugees, they did not get any larger. What it means is in those villages, there are no pharmacies. There are no banks. Actually, banks only remain in 4% of cities in villages in Ukraine.

And you have to make sure these people do guests. Plus, when we talk about the occupied areas, Russians destroy the entire infrastructure, which means when Ukraine deacupies these villages, for about five to six weeks, you don't have mobile connection, you don't have electricity. But we have to work because you cannot leave people in the vacuum, not to mention they would operate in Russian rubles and you want to bring them back to Ukraine. So you have to bring them Ukrainian currency. And we are the first company they see.

We usually come two, three days after the occupation. just give time to deminers, to demine the fields, so we can relatively safely operate. And we restructured our operations so we can work with or without power and electricity. Thanks to Starlink from Elon Musk and about 1,500 generators, we now had built a system which can work whenever, under any conditions. So we had to change our processes to make sure we deliver pensions in cash, because obviously if there is no electricity, your ATM doesn't work for you, post-terminal does not. work, but people still need to live. I mean, they have little bazaars, they work. So we basically

create the ecosystem of life around those small villages, and we keep it going. What's the labor situation like at the moment? I mean, you mentioned demining. It sounds like this is a risky job. Here in the U.S., we have a postal worker shortage, even without having to worry about military conflict? I mean, it's a severe shortage. You can imagine, first of all, we have to separate male and female works, right? And you can imagine there are many male population in the army. Second, we have lots of refugees. And so, I mean, we understand it's a big problem. So, for example, now to attract personnel, we have to make sure that our offices are equipped for people with disabilities, so we can get them to work. We're trying the best we can,

to implement automatic sorting lines. Our goal for this year, I know it sounds weird during the war, but we want to be 100% digital, even when there is no digital, meaning we build a system where in the morning, our mail carriers will download through Starlink and generators the data, work during the day, and then upload the data at night, which means, again, we are not dependent on the infrastructure,

if Russians shut down the electricity or mobile or anything. So we're doing our best to increase efficiency, to maintain as normal life for people as possible. Why, you can imagine there is no rush of new stores opening in Ukraine right now. There are no rush of new banks and pharmacies. So the e-commerce becomes this tool to maintain a sense of normalcy even on the front lines. So, for example, we have lots of soldiers that would order something on Amazon or on Alibaba, PowerBank, or the Saks or stuff or whatever they need and they'll deliver. So, you know, the e-commerce becomes the tool to keep you connected to the world, even when the

world is in a difficult situation. I'm actually curious. You mentioned Starlink. I don't know that much about it, but I'm curious, are there efficiency gains or infrastructure gains that you've discovered with the use of Starlink? satellite internet, such that when there's a proper rebuilding phase, that there are things that will never have to be rebuilt in their original form because of, I guess, that there's some sort of leapfrogging or efficiency that you've discovered out of this period of duress.

Good question. No, absolutely. I mean, you know, we don't want to discuss Elon in his views, but the Starlink has been really a saver to us. you won't be able to run internet cables in those areas, right? I mean, it just will be millions of dollars. Probably it will run through the field which you need to demine and then Russians can bomb it again and it can go off, etc.

So via Starlink, you are flexible enough when you combine Starlink and the generator. When you combine the two, you're basically no longer dependent on the central infrastructure. And you can provide civilized services right away. not five months after the occupation, not three months after Russian destroyed the buildings today, like for example, it was in our case. So we rebuilt it. They put up the Starlink generator, and they get back to work.

So, you know, it's like a theory of broken windows. You cannot have that. You should have the services, and the Starlink allows you to have that connection to the world. So I take the point about Starlink and also switching from driving the mail to going by rail, but there must be areas that you just cannot get mail to at the moment. I mean, the occupied areas, for instance.

How widespread are those, I guess, pockets of non-service? I mean, roughly 20% of Ukrainian territory is occupied by Russians. We try to be creative. If you talk strictly about the law, there is a Geneva Convention. So if Russia occupies a certain area, they're responsible for, well-being of people there. Obviously, knowing Russia, the world responsible is, you know, exaggeration. So, for example, in Hirson, when Hirson was occupied by Russians, we wanted to keep

Ukrainian pensions going because we wanted people feel they're part of Ukraine. So what we've done is, for example, we knew we could not get cash to the occupied area. What we did, for example, we agreed to small shops, like, you know, bakery shop or gas stations or barbershops, that they would give us cash and we would pay their bills on Ukrainian territories. And we would use that cash to pay, you know, grandma and grandpa their pensions. So they would come back again to the store. And this way we kept grivna operation, Ukrainian currency, going even under Russian occupation. They did not understand how the grinsna got to the occupied area. But, you know, when you're creative enough, you can make things happen.

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Make us part of your weekend routine on Bloomberg Television. radio, and wherever you get your podcasts. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to Leading by Example, executives making an impact on the IHeart Radio

app, Apple Podcast, or wherever you get your podcasts. How do you protect cash? I mean, obviously, in the U.S., and we have the Brinks trucks and there's a whole separate infrastructure for cash management that's separate from the normal postal service and their guards on the trucks and all that. Has cash delivery always been an important role that the Postal Service has played in Ukraine? And how do you think about protecting those packages versus sort of more normal mail?

No, absolutely. they always been important. Why? Because, you know, in small villages, if you don't have banking infrastructure, the cash is the king in reality. Because if, for example, if you have a bank card, but nowhere to use it, you're not going to use it. So you're going to stay in cash.

We always have, I mean, we have lots of people with guns to protect it. When we talk about the areas close to the front lines, we get help from the army that, you know, basically drives with our trucks to make sure they're protected and make sure we are delivered. So we have the whole entire system of controls, of monitoring of our armed guards to help us deliver cash.

I mean, that's the reason I've set a goal to build 100% digital infrastructure in every single village so we can reduce the cash. So, for example, right now in the village you cannot use the bank card. We are now trying to get the banking license and so then basically devices that we're building

that people will be able to use banking and e-commerce infrastructure in every single village. You know, basically it's like ecosystem. So right now we pay pension in cash. You know, you get your retirement payments in cash. And then you pay us for utility bills. You pay us for the food. You pay us for the medicine.

So we can convert all of it into non-cash format. Will it happen right away? No. But slowly, once we build this digital infrastructure, we can. That reminds me. A project like that, it sounds like it costs money. So how is that being financed? And then more broadly, how is Ucura Posta finance?

Because here in the U.S., there is a perpetual ongoing discussion over the financial health of the U.S. Postal Service and whether it should be treated like a private enterprise or a public service. I'm curious how it's done in Ukraine. Well, I mean, coming from the U.S., you know, I'm a big proponent of a non-socialist way of working. So the more independent you are from the government, the most successful you are. So in Ukraine, we are joint stock company where we are not. not financed by the government, we actually paying dividends to the government. So anything we do, even during the war, we have to finance ourselves. One of the reasons we went to the parliament

and we had asked to reduce regulation. So, for example, in Ukraine, only first-class mail is now regulated. So only first-class letters are regulated by the government, meaning the tariffs and the newspapers. Everything else is a market base, which means we set the tariffs, which we believe cover our cost plus profit, and that's how we finance operation. So our goal is to reduce number of state-related revenues to less than 10%. You know, I was reading something not in preparation for this episode specifically. I was actually, but I was reading a little bit recently about U.S. postal history in the importance of the U.S. Post Office and U.S. industrial development. And, you know, a post office obviously has a postal service, obviously has a distinct, unique perspective

on the sort of geography and territory of a population. And you probably have some of the best visibility on where people are at any given moment and the name of every road, the name of every address. How valuable is the information that must be contained within your organization into the broader, I guess, war effort right now of the government, even if it is sort of formerly disconnected, the sort of ability of the government to essentially have the insight that only a postal service can have about where people are at any given moment.

I mean, in the modern world, obviously, there are a different place of getting that information. Probably the most reliable is the mobile operators, because via signal, you can exactly say how many people are in the area in any particular point and even track down how they move. Obviously, we are probably the next best choice because we physically see people. We know how many are there. We know their age. So compared to the mobile operators where they just track the signal, we actually know that, for example, people here are older or people here on retirement or here it's a younger population because, you know, for example, you have 500 and 500 people in two villages, but one can have older people in retirement and the other can have people of the younger age. For example, it's a farming village. So we have a better understanding of the economy of a particular area or how fast people are coming back.

We see it, for example, in how they pay utility bills. Because, for example, you can pay utility bills online even when you left Ukraine, right? You can be right now in New York as a refugee and paying your electricity bill online, which means if you just track down the payments, you won't be able to see whether the person is actually in the village, like in Harkei or in Zaporizia or there in New York, we know when we take the payments, we know exactly how many people are there because when we bring utility bills,

we know they are received enough. I mean, it does sound like you are working closely with the Ukrainian military. So you mentioned the demining operations, armed escorts in some cases. I imagine that wasn't the case pre-2020. Could you maybe talk about how you built up that relationship?

with the military? Like, what were those conversations actually like? And how do you start formalizing a structure of cooperation or information sharing? I think that's where Ukraine is stronger than Russia. Russia is all about vertical rules and all about, you know, rules written. There's one Tsar and then you go all the way down. So the reason Ukraine was overcoming Russia at the beginning, because we are flexible. For example, our military commanders have a right to make decisions. Russians don't. I even had to negotiate with Russians. It's impossible. They don't make any decisions on the ground. Every time they have to check with Moscow. So Ucroposte was working from day one. Throughout the war, the only day we did not work was February 24th, because I stopped

all the operations because I could not understand what I can do to secure lives of people. Every single day thereafter, we continue to work. Never stop. And my day, start. We designed the procedure where my day starts, we check with the military, where it's safe or not safe today to deliver. We unfortunately lost a few lives because we thought it was safe and the military thought was safe, but Russians extended too fast in the first days of the war and we lost a few people because they attacked. So it's a standard procedure where we check with them, how is the situation on the ground today? Where do they think it's okay to go and where we should, for example, seize operations? I just an hour ago, I got a note from the military in Kharkiv region that we should not go near certain areas today because it will be dangerous.

And that's how we work in chats, in messengers, in communication where you have to quickly make a decision. The most difficult part was, you know, it's a war. So where do you delegate and where you make decisions like in the army? So I had to find the balance between decisions that I make and I'm physically able. to make because in terms of the U.S., we have like 24 states. So I had to make decisions each and every one of them. And where do they delegate? So I build a system where I have head of regions and they allow to make certain decisions. Certain decisions, they have to agree with me in different messengers, you know, signal, telegram, et cetera. And we make it quickly and then we go. So we're

trying to be as informal as possible and as efficient as possible. Going back to some of the external aspects and how we started this conversation. And you mentioned that, did you say 50% of Ukrainian exports are to the U.S.? And, you know, there's so much conversation about commodities exports, particularly wheat and so forth. But in terms of actual value, half of it is sort of various sales of goods to the U.S.? You know, it's the postal experts, so to speak, you know, e-commerce. Oh, 50% of the postal experts. Oh, postal experts. Yeah, it's e-commerce. Mainly, you know, If you know, Etsy, it has to be only handmade, right? So it cannot be mass produced.

So it's a handmade things. Not sure whether the baseball shirt was handmade, but... It wasn't. But I am aware on Etsy, there's, like, amazing handmade, like, fabrics and embroidery that come from Ukraine, dog clothes. I'm not saying I'm buying dog clothes for my Corgi, but I know they were there. But I also noticed that on your website, you have... There's a whole section right on the front page.

start a successful international business, and it has guides and videos, like how to set up a business and sell on Etsy, how to set up a business and use Shopify? So right there, like, have these long been things, or is this something that you helped accelerate and implement, or has this been a long part of one of the services that the post office focuses on? No, I mean, it's actually the project we're very proud of. We actually got award as the best sustainable postal operator in the world because that's how we get people. people in the smallest village, sometimes they do wedding dresses for $5,000 and sell it in the U.S. You can imagine it's a huge part of the local economy. Or right now, many of our military

guys in the trenches, they dream after the victory to set up their own business. So they're watching those videos in the trenches and think about their business that they will open once they're back. So, you know, it's a huge part of the success. And we plan to extend. this project, especially, for example, for people with disabilities. You can imagine Ukraine losing a lot of people, you know, people losing limbs in the war, but they can work from home. They can set up shop. They can do this embroidery at home. We can send a courier to pick it up, and they sell it on Etsy. So they don't feel like they have to get social subsidies. They feel like a part of the society. So, you know, it's very important. That's why we understand how

important it is for us to deliver quickly. We kind of hope, you know, no, it's been two years. as I'm trying to launch a postal train to Europe. So, for example, I can get down the time to deliver to the S to seven days. So I'll get, for example, overnight from Kiev to Warsaw. And from Warsaw, the plane will fly to New York. And you will have the shorts not in 14 days, but in seven. That's sort of our goal. And we're trying to strive it.

But it's been a part of our work for a long time. Some of it has been helped by the war, because you probably heard about our famous stamps. I was about to ask, speaking of new business, you also sort of have one in the form of these new edition stamps. Yep. And we actually got the price from eBay as the rising star because we maintain delivery standards global worldwide. We sold millions of stamps. We had a joke I met with the Postmaster General in the US and he joked that we probably the only postal service that makes money on the

stamps. Wait, talk to us about the design of the stamps. Describe maybe the most famous one. Well, the most famous, obviously, is Russian warship go F yourself. You know, we're breaking any possible rule there is in philatel. So we're doing the stamps. Usually the postal service has like two-year plan to issue stamps. And we don't. We just issued them. So, for example, when Ukraine bombed the Russian Crimea bridge,

we issued stamp in one hour, which tend Russian TV to believe we knew about the operation and prepared the stamp in advance. I mean, obviously we did. And there are some other stamps. the Russian Moscow ship. So we issued STEM, and then the ship was sunk three days after. You know, but it helped. Yeah, we precede some of the events.

Let's put it this way. Same with Crimea Bridge. We have a few more surprises with F-16s and other things. But, you know, it's a huge moral boost, and it's a good part of the revenue for us. It's an image of Ukraine. We are the only postal service that has our own stores on Amazon and eBay. So you can check, there's only one. just for our postal operator.

And we have global sales. People come from all over the world to our stores, buying the stamps, and we ship them. And giving the ratings we have, we deliver it within very short periods of time. This is Tom Keane, inviting you to join us for the Bloomberg Surveillance podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of the U.S. market open. We cover stocks, bonds, commodities, even crypto, all the information.

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Bloomberg Surveillance, Essential Listening, each and every business day. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to leading by example, executives making an impact on the IHeart radio app, Apple Podcasts, or wherever you get your podcasts. Joe, I have to say, I think the Russian warship go F yourself stamp. That must be the only stamp in the world that has a depiction of a middle finger. I think.

I could be wrong. Yeah. But I would guess. Well, we made it to the daily show, so, you know, it probably was the only stamp that made there. Let's talk more about mail by rail. And you mentioned in the beginning that, you know, there used to be several flights direct to New York each week, and now there are none. And so you have to go by rail. What happens at the border?

What are the challenges, just sort of the nuts and bolts, so to speak, of establishing that link between Ukraine and Frankfurt? I mean, obviously the main challenge is that, you know, the border was made for the trucks. And the huge part of the Ukrainian exports and imports was done by the sea, because Ukraine is a sea country, right? We have a black sea. It was done by air. And once that was canceled by the war, imagine the entire flow, including the military aid and military supplies, had to go through the small window of a few roads to Europe. which, by the way, obviously, everyone was concerned that Russians will bump and the railway.

So you left to two choices and you had to squeeze the entire volume through those few roads to Poland, to Romania, to Slovakia, etc. So the challenge remains. It will remain going forward. I do hope that we win soon. And imagine during the reconstruction, the flow will increase several times, but the roads won't, which is why we're trying to do the best we can to move certain clothes to railway

because railway is more efficient you don't have to stay online in the border and you can basically run on schedule. So the reason we've been so successful because we connected our postal cars not to the cargo trains but to passenger trains and passenger trains, you can imagine run on schedule. So it allows us strict predictability

as to when your parcel will arrive when we have to unload it and deliver it to you. What's been the most creative solution that you've deployed during this time period? Like, is there a particular workaround or decision that you're especially proud of? Two things. One is the system that we built with Starlings and the generators. And the second is the combined logistical chain, train, car, plane to make sure that we deliver across the globe. I think that was the key. We used it at the beginning of the war to bring back to Ukraine humanitarian

aid. So for example, we chartered the plane during the first week of the war. We chartered our own plane in Poland and we brought all those parcels to New York and obviously we did not have that big overflow on the way back. So we loaded that plane with humanitarian assistance

with medical supplies, some of the military supplies. So we use, you know, we don't fly empty and we use the most efficient way of transporting it. You mentioned that other than first class mail and news papers, your pricing is totally deregulated. Can you talk about some of the decisions that you've made around pricing? Are there certain types of goods? Is it sizes? Like, how did you, are there,

there must be low priority things that you sort of like want to discourage people from using your capacity? Talk to us about like some of the decisions you made around pricing and how the war has changed those. There are a few things. Ukraine is a very competitive market. So we have analog of FedEx and UPS, which are dominating the market. So that was our argument to the regulators. Why want to regulate us when the market will take care of ourselves? That's the first thing. Second, what we learn is, you know, if at the beginning of the war,

people were thankful for us that we in generally work, right? Because when I talked to my colleagues and other postal services, they amaze that we in generally work. And that will probably last for about a few months. But then people move from, okay, thank you for working. now I want my next day delivery. And the expectation grow, which means we have to deliver. We have two sets of tariff, which is next day and two, five days,

to make sure we distinguish between cheap goods and, I guess, more immediate needs, which people need fast. So that's our sort of value proposition that you can choose. Our competitors have only one tariff. So it's just expressed next day. So imagine how competitive the market is, even during the market. the war. We're striving to achieve next day delivery, even the country

as large as in Ukraine. So, for example, for me, to deliver from Ushgrad, which is close to Poland and Hungary, to Pakrovsk, which is close to the front line, we are using the truck to take it to Lviv, loaded on the train. The train brings it to Nipro at 10am.

We sorted for two hours, we get it on track, and then 3 p.m. it's in Pekrovsk, which is the other side of Ukraine, I think, a few thousand kilometers. But again, that's what expect and that's what we need to deliver. We just try to price it. I mean, in general, it's very cheap. So, for example, it's like $1 next day delivery for up to one kilo. Do you get any pushback from people in terms of price increases, or is it generally accepted that these are exceptional

times? And so the price is sort of justified. You know, it depends on the price. For example, when a person pays $500 for a computer, do they really care whether a delivery is $3 or $5? not that on. They want it to be delivered next day. If it's a mom that, you know, moms exchanging clothes for the kids, they're okay to wait. Or if it's a medicine. So if it's a medicine that you need the next day because you're really sick, we need to deliver next day. If you have some kind of chronical illness and you get your medicine every month the same day, we can plan it in advance, right? So we can, the reason we have to be flexible is we offer the client a choice. You can pick cheap or you can pick.

more expensive depending what fits you need. But people do want quality. I mean, you know, with e-commerce, it's an immediate gratification. So I order today, I want to get it tomorrow, even if it's a war. You know, obviously we're having this conversation about the extraordinary challenges of delivering the mail during a war. When the war started, the entire world was still in the throes of the broader, I guess, supply chain crisis, spring 2022, who's still all kinds of parts for every type of thing were missing and pallet scarcity and container scarcity due to COVID and everything. How did that affect you? And what have you seen on that front since then in terms of parts that you need, equipment that you need, and so forth just to run your operation?

You know, I thought we prepared during COVID and we adopted. But then when the war starts, the situation becomes even worse. For example, we've been buying trucks from Belarus. Now, Belarus is an enemy. Yeah. How do you get the parts for the trucks? How do you get the parts for Russian tracks? We're now running a procurement for the new trucks. The issue is, do you let China company participate or you don't?

Do you let them participate if they stay in Russia? Do you deal with companies that stay in Russia? So, you know, you have much wider range of issues that we need to handle and make a strategic decision on. I mean, we made a strategic decision that we have to get rid of Russian-made vehicles as soon as possible. We made a strategic decision that is probably not a good idea to have trucks from China because if tomorrow they become big friends with Russia,

we're not going to get parts and we're just going to be stuck. So you have to think a few steps in advance. we buying some other equipment from China, which we think strategically will not be in danger our operations. But we learned that in the modern world, as you correctly pointed out, you know, there could be various of things affecting the supply chain. Igor Smilyansky of Ucorposte. Thank you so much for coming on odd lots. That was such a fascinating conversation. Thank you very much for having me.

So, Joe, I found that an absolutely fascinating conversation, not to get really philosophical, but the theme that kind of jumped out at me is it's sort of like simultaneously globalized and also de-globalized. There's nothing more de-globalized than war and a country invading another country, it feels like. But at the same time, hearing Igor describe the importance of e-commerce to the Ukrainian economy. The idea that there are soldiers in the trenches who are coming up with business plans for a small business on Etsy is it kind of blows your mind. in some ways. And there's such a tension there between the war zone and then that like globalize. You order something online. You expected to get it the next day kind of aspect of the economy. Yeah. Thinking about villagers in Ukraine going online and figuring out how to set up a Etsy shop or an Amazon shop or your Shopify makes the world feel very small and feel very familiar.

And so I thought that was striking. Also the idea of, you know, Starlink and how. how crucial that's been and that you can sort of essentially, as he put it seemingly in a day or to recreate destroyed infrastructure with a combination of Starlink and generators. And you have to imagine that like some of that will become the norm. I don't know if like the generator, you know, I think they probably not the generators. But like the idea of like, well, will you really rebuild an entire wired infrastructure if satellite internet works well? Like that's like really sort of interesting.

You can see how that could like reshape society. reshape infrastructure. Yeah, I'm glad you ask that leapfrogging question because it sounds like that's kind of what's happening or what could happen once reconstruction actually begins. But overall, super interesting conversation. The switch from driving the mail to rail was really interesting. Just the idea of, I guess, post office workers who are having to think about stuff like mines on a day-to-day basis and communicate with the military about where is safe to go. Pretty interesting times. Yes. And I should just mention, Joe, if anyone is interested in learning more about Ucour posta and how Ukraine is delivering the mail at the moment, there was a really brilliant profile of Igor by our Bloomberg colleague, Todd Shields. I think it came out in 2022. You should definitely go check that out. And a big thank you to Todd as well for helping us arrange this interview and putting us in touch with Igor in the first place. Shall we leave it there? Let's leave it there. Okay, this has been another episode of the Oddlots podcast.

I'm Tracy Alloway. You can follow me at Tracy Allaway. And I'm Jill Wisenthal. You can follow me at the stalwart. Follow our guest Igor Smelyansky. He's at Smeljanski, Igor. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashel Bennett at Dashbot and Kel Brooks at Kel Brooks.

Thank you to our producer, Moses Ondom. For more Oddlots content, go to Bloomberg.com slash Oddlots, where we have transcripts, blog, and a newsletter. and you can chat with fellow listeners 24-7 in the Discord. Discord.g.g. And if you enjoy Oddlots, if you like it when we do these logistics-oriented episodes, then please leave us a positive review on your favorite podcast platform. And remember, if you're a Bloomberg subscriber, you can listen to all our episodes.

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