What challenges is the transport industry currently facing?
The transport industry is constantly facing new challenges, legislative changes and economic conditions. After the period of pandemic restrictions and the economic crisis at the beginning of 2022, there was a light at the end of the tunnel. However, reality quickly vanquished the high hopes carriers may have held, turning the world order upside down with unprecedented Russian aggression against Ukraine. This event caused a domino effect, leading to a number of problems. What challenges is the transport industry currently facing? When can we expect the situation to stabilize? Here is an in-depth analysis of these questions.
Table of contents
Staff shortages in transport sector
Estimates and analytical data show that there is a shortage of 100,000 to 200,000 professional drivers in Poland. Until recently, carriers could count on workers from Ukraine and Belarus, which is unfortunately not the case at this point. Inept attempts to save the situation by refunding C driving license courses may bring real benefits only after a dozen or so years. More and more often we hear about recruitment processes in Asia, Africa and Turkey. However, this type of solution generates further, additional costs related to the accommodation of foreign drivers and the relocation of their families. The labour shortage in the transport industry also applies to office workers. There is no indication that the situation will improve in the coming months.
Mobility package, i.e. new challenges in the transport industry
The mobility package has been the hottest topic in the transport industry since 2020. Every year, further changes are introduced, aimed at unifying the rules of operation of transport companies as well as the working conditions of professional drivers. Further modifications are also planned for 2023 and pertain to:
- mandatory installation of newer generation tachographs in vehicles registered from August 20, 2023
- the need to submit declarations on the number of employees and drivers performing transport operations by entrepreneurs with a permit to carry out road transport
- increasing the number of parking places in the database
Digitalization of the supply chain and documentation
We are witnessing a real digital revolution in subsequent areas of everyday life and in individual sectors of the economy. Digitization of transport leads to easier establishment of business relations with other companies, simplification of many procedures and integration of various systems used in transport companies. In theory, such solutions are supposed to contribute to better control of order profitability, or even automatic calculation of driver working time. However, it is also a big challenge for transport companies that have developed their own working methods over the years.
High inflation, swirling fuel prices, low demand
We all feel the effects of inflation, but they are a particular challenge for the transport industry. High fuel prices mean higher transport prices, which in turn has an indirect impact on the final price of products in stores. The low value of the Polish zloty in relation to the euro or the dollar also plays a part in this.
Accounting and logistics departments in transport companies regularly analyse and estimate costs so as not to lose money on orders. However, price increases are unavoidable, which, in the face of limited business opportunities and low consumer demand, may lead to the bankruptcy of many carriers. Especially since data from the National Debt Register indicate that the debt of companies from the TSL sector is constantly growing. High interest rates, which affect the costs of loans and leases, also don’t help transport company activity.
Breaking off relations with Russia is a multi-level challenge
The economic and political sanctions imposed on Russia are justified because they contribute to the real weakening of the aggressor on many levels. However, it should be remembered that their effects will spread in two directions. Limiting trade relations with Russia led to the disruption of supply chains, which affected about 47% of companies in Poland. Companies were forced to look for new suppliers and substitutes for the products they had used so far. What’s more, the imposed sanctions led to transport completely disappearing on the Poland-Russia and Poland-Belarus axes. Thus, the transport industry faced another challenge, which was searching for orders in new markets.
Transport industry challenges in 2023 – summary
- Employee shortage in transport companies
- Breaks in supply chains
- Restrictions on transport to Russia and Belarus, and in the opposite direction
- Significant increase in fuel prices, reaching even several zlotys per litre in a few months.
- Increased competition in western and exotic markets.
- Decrease in the value of the Polish zloty.
- High inflation, limiting consumer demand
- High interest rates affecting monthly loan and lease instalments.
- Growing TSL sector debt