Are Eastern markets a lost opportunity or a new challenge for Polish transport and forwarding companies?
Grzegorz Szenejko, Go Logis, expert in trade with CIS countries: In 2017, the road transport market to the East stabilized, supply met demand, and transport growth remained at a relatively constant level. In our case, we recorded a growth of 35 to 40 percent. We mainly organized less-than-truckload (LTL) and full-truckload (FTL) shipments for the chemical (including ADR hazardous materials), hydraulic, and agricultural industries. We observed a particularly large increase in orders and inquiries for the Ukrainian direction; here, the increase in demand for transport resulted from a limited number of permits. Interestingly, there were also unexpected fluctuations; for example, in July and August, we recorded a very large increase in transport to Russia, and a significant decline in September. Despite the revival in relations with the East, we did not notice the return of carriers to this market from which they had previously withdrawn. This market is still very difficult for us. After the collapse, Polish transport companies began looking for new directions, mainly in Southern Europe, Bulgaria, or Turkey. Now they are carrying out transport there and no longer want to give up new contracts. This applies to both small and large companies. Those who stayed could therefore drive up rates. In addition, we felt the pressure of strong competition from Belarusian carriers, who are doing quite well, are cheaper than us, and above all, find it easier to communicate with Russians or Kazakhs. Many small transport companies have also been established in Belarus, each owning a few smaller vehicles. This is usually an older fleet that would not be allowed into the EU, but is accepted in Russia or Kazakhstan. Moreover, these older car models perform better on Eastern roads. Belarusians are also opening companies in Russia, as it is easier for them to conduct business there and they get more permits than in their home country. Thanks to this, Belarus, despite being a small country, has already gained a significant market share. Polish carriers lack vehicles, and the shortage of drivers was a major barrier to the development of transport, not only in the EU.
Next year, we should expect further development of LTL transport and related services, such as cargo consolidation and warehousing services. Specialized vehicles that are in short supply on the market, such as refrigerated trucks, will be needed. There is also a shortage of drivers. Transport service prices will therefore rise, not only to Russia. As for the Eastern markets, it is difficult to predict, because this direction often surprises. We can certainly expect further growth in road transport. This may be influenced by the next stage of modernization of the Siedlce – Terespol railway line. Traction repairs usually extend delivery times. The biggest problem may be faced by companies transporting wood and food products, i.e., sensitive goods with a set delivery deadline, for which contractual penalties must be paid if exceeded. For them, road transport may turn out to be the best solution. And since there are too few carriers, I predict price increases on these routes in this situation. Next year, we may also have to reckon with increased competition from Lithuanian and Latvian carriers. Certainly, in 2018, Go Logis will develop its road transport offer in this direction. We are already planning to launch a regular LTL line to the East, including Russia, Kazakhstan, and Belarus.