Increase in freight transport, still leaving room for uncertainties

The recovery of the international freight transport, although on the right track, is still shadowed by uncertainties based on the risks generated by the geopolitical events in the global economy, shows a report of the  International Transport Forum (ITF).
Globally, the transport of goods is on a growing trend, with cargo volumes continueing their ascent. Railway freight transport seems to be on the right track, and the positive trend of cargo volumes continues. In the European Union, where rail freight traffic dropped during the financial crisis, the volume is 14% below the level of the second quarter of 2008. For the transport and logistics segment, although recovering from the drop caused by the economic crisis and the companies’ general managers see a growth in the sector, in the study called “Growth reimagined – Transportation & Logistics”, PricewaterhouseCoopers (PwC) reports the same uncertainty as that of the ITF, although the general managers of the companies involved in the study are optimistic for the period that comes. The study refers to 1201 companies from 69 countries in the final quarter of 2010.Therefore, 60% of the companies’ general managers are “very confident” about their company’s prospects for revenue growth for the next 12 months (Figure 1). This optimism is the result of a growth in efficiency: most transport and logistics companies have seriously reduced costs in the past 12 months. Another reason pointed out by PwC is the “change of strategy”. 90% of the companies’ general managers said that in the past 2 years they changed strategies and 37% of them describe this change as “fundamental”. The main factors identified were the customer’s demand and the dynamics of the industry (72% of the CEOs believe both factors are decisive).The IMF forecasts that growth rates for 2011 will continue to be slow for developed economies. But there is a highly positive trend in emerging markets providing huge opportunities for transport and logistics companies. Many companies have established centres for supply of services on emerging markets and have even made their business grow on these markets. Therefore, the companies’ CEOs resort to new strategies: 73% say they will significantly change their strategy in the next 3 years.The transport and logistics segment is the most infrastructure-dependent as compared to the other sectors. Therefore, 50% of the companies’ CEOs say they are worried about the fact that inappropriate infrastructure conditions could hinder growth.  This explains the fact that 27% of the respondents believe the inappropriate infrastructure is in the top of the risk factors. Therefore, the companies’ representatives say that infrastructure should be among the authorities’ main concerns: 62% believe that these should be one of the first three priorities that governments should report to; 55% say they increase commitment by improving the infrastructure in their countries.

by Pamela Luică


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