Some participants in the Polish road transport sector continue to feel the effects of 2011, which brought many difficult changes to the industry. First, the struggle for Russian permits, then the massive confusion over the introduction of the electronic toll collection system, and finally the unfavorable – especially for small companies – package of transport laws introduced on December 4th. If we add rising fuel prices to this, the outlook for Polish transport in 2012 does not look optimistic.
In addition to the aforementioned fuel price increases, the uncertain economic situation in Europe and payment bottlenecks in the market are also cause for concern. The end of the EU budget perspective and the organization of Euro 2012 are also significant factors. But there are positive aspects as well. Serbia could prove to be a huge opportunity for carriers; with a market of nearly 7.5 million inhabitants, it is a country where trade is developing dynamically and where it is becoming increasingly profitable to transport goods.
Are they paying or not?
There is little reason to count on an improvement in the timeliness of payments for transport services rendered. The scale of the problem in 2011, compared to 2010, decreased only minimally, and there is no indication that it will change for the better in the current year. In 2011, the Trans.eu Debt Collection Department accepted nearly 36,000 cases for recovery, 84 percent of which ended in the recovery of money owed to carriers. In this way, over 79 million PLN returned to transport companies. This shows how much companies suffer from payment bottlenecks, but it also proves that increasingly effective ways of recovering money are appearing on the market.
2012 and the rate per kilometer
In 2012, the standard rate for domestic freight transport should fluctuate in the range of 2.30 – 3.20 PLN/km. There are fewer and fewer of the cheapest transports. Simply put, no one wants to drive for a rate lower than 2.30 PLN/km, because as most market participants claim, this is the limit of profitability. Last year, the threshold below which “no one” wanted to transport goods was 10 percent lower. As for international transport, the situation here is slightly more stable. Rates fluctuate around 1 Euro (export) and 70 Eurocents (import).
2012 and changes in the construction industry
Significant problems may also await companies involved in road infrastructure construction. The end of major investments for Euro 2012 will cause many question marks. The shift in the main profile of investments in the construction industry from road to industrial will leave its mark on companies that “carried” mainly for construction firms. Change will become a necessity, but companies are reacting very slowly, because hauling aggregate for road construction is slightly more profitable than transporting goods with a 24-ton truck with a so-called “curtain-sider”.
In road construction, rates for specialized transport range from 3.50-3.70 PLN per kilometer. This is why the price of fuel does not have such a huge impact here as it does in the case of standard transport. If we assume that the price of fuel increased from 4.50 to 5.50 per liter, and rates per kilometer increased from about 3 PLN to about 3.50 (bituminous mass transport), then despite fuel price increases of over 22 percent, carriers are only charging slightly over 16 percent more.
Energy straw
What kind of goods will it be possible to make money on in 2012? A hit could turn out to be… straw, which is used in power plants as biomass for co-firing with coal. Due to EU directives related to increasing the share of renewable energy, there will be more and more such orders. This is a commodity that does not require a “curtain-sider”, is not a tempting morsel for thieves, and the routes themselves are not long.
2012 – ERP, consolidation, and outsourcing
In addition to the most significant change for entrepreneurs in the construction industry, 2012 will bring a series of actions in other sectors of the economy as well. These will mainly be processes of consolidation and the implementation of computer systems for cost optimization. The whole thing will be complemented by the outsourcing of logistics to large transport companies. Thanks to this, manufacturing plants will save many millions of zlotys. Small transport companies that have provided services for them so far may have a problem, because after their existing client merges with a larger enterprise, an ERP system is implemented there, and at least part of the logistics is handed over to external companies, they will be “cut out” of the supply chain. 2012 is another year in which small companies will increasingly fight for orders from large freight forwarders. It is difficult to negotiate good rates there. Such a situation may occur primarily in the meat production industry.
Serbia – a rising star
The Serbian market may prove to be an opportunity for many entrepreneurs who are not afraid of international challenges. Although wages there currently reach 400-600 euros per month, this country of nearly 7.5 million people is believed by many to have huge potential for growth in both warehouse space and direct sales. In other words, compared to other countries, there are not as many shopping malls and hypermarkets there, and investments will radically change this state of affairs as early as 2012. In Poland, on the other hand, there will be an increasing demand for transport services in… small towns. It is there that a large increase in investments related primarily to large-format retail trade will take place.
Expand or fold?
Despite concerns about the future, few companies intend to limit their operations. A survey prepared by Trans.eu shows that only 7% of companies are considering such an option. Nearly one in three respondents plans to expand their business. The rest, or about 65% of companies, have set maintaining their current form of operation as their minimum goal. People who have decided to give up working in transport often do not decide to completely break away from the industry. They want to use the experience gained over years of work in the industry, for example, by conducting training for transport companies.
The truth about the industry or national complaining?
Complaining is the domain of Poles, who, when given the opportunity to express their opinion, present the situation as much worse than it actually is. In transport, the situation is similar. In the Trans.eu survey, as many as 65% of people declare that the situation in the industry in 2012 will be worse. The Central Statistical Office, which studies the moods of Poles, is slightly more optimistic. The fact that, despite the complaints of entrepreneurs, the market is coming out of a slump is shown by hard data. In all of 2011, 155.5 million tons of cargo were transported, which is as much as 22.3% more than in 2010. According to the office’s analysts, we can also expect an increase in prices for transport services in 2012.
The truth, as usual, lies in the middle. Transport is a difficult and fickle industry, but also rewarding for anyone who can adapt quickly enough to conditions, carry out necessary changes, and take advantage of the opportunities that regularly appear on the market. Therefore, those who notice these changes and make good use of them will survive. And there has never been a shortage of such companies in the transport market.