Furies leasing not out: carriers return trucks ahead of schedule
High costs of trucking companies force them to return leased equipment ahead of schedule. Taking into account the simultaneous reduction of tariffs for cargo transportation, up to 15% of carriers may leave the logistics market next year, industry experts warn. On the one hand, this will affect the final cost of goods, and on the other hand - will allow to recover the market of road transportation, experts believe. Details - in the material "Izvestia".
Candidates for exit
Next year 10-15% ofcompaniesmay leave the market of road freight transportation. This was announced by General Director of the National Agency for Industrial Information (NAPI) Tatyana Arabadzhi within the framework of the Comtrans-2024 exhibition held in Moscow. First of all, we are talking about small and medium-sized companies, she said.
- Since the beginning of the year, carriers' costs have increased by about 30%. First of all, these are expenses on leasing payments, purchase of spare parts and maintenance of transport, purchase of fuel. At the same time, freight transportation tariffs have decreased by 13%," she said.
According to the general director of NAPI, this forces carriers to revise their business model and try to reduce costs, including by reducing the number of trucks in the fleet. At the same time, one of the main factors in the increase of costs, she calls the size of leasing payments for vehicles, which have increased significantly due to the growth of the key rate.
- Currently, about 17.5 thousand leased trucks have been returned to the stock ahead of schedule. Companies are simply unable to service the sharply increased leasing payments and prefer to reduce part of their fleets, - said Tatiana Arabadzhi.
The expected departure of 10-15% of companies from the road transportation market does not mean that all of them will go bankrupt, emphasized the Director General of NAPI. According to her, some of them may merge, which will allow more efficient operation of the fleet. Another part of carriers may lease their trucks to larger logistics companies, she believes.
Shake-up for the market
NAPI data is confirmed by Taras Koval, President of the Association of Transport Experts and Specialists. According to him, in mid-autumn it was about 16 thousand vehicles. In 1.5-2months the total number of returns may well have increased even more, he believes. However, it is not only the growth of payments that affects it, the expert believes.
- Now a significant share of trucks on the market are Chinese models. And taking into account the peculiarities of their design their residual leasing value is often lower than the real market price for them. Simply put, such vehicles lose value much faster than their European counterparts. This also contributes to the early return of equipment to leasing companies," said Taras Koval.
He agrees that in the current economic conditions some carriers may leave the market. However, this will benefit the industry to a certain extent, the expert believes.
- It will certainly be a kind of shake-up for the market, but it will also allow to weed out weak and inefficient players. The main thing in this situation is that the government should make decisions that would put all industry participants in the same position, - says Taras Koval.
The prospect of some companies leaving the trucking market is more than real, believes Vladimir Matyagin, president of the association of road freight transport "Gruzavtotrans". According to him, the growth of costs is already forcing some carriers to think about the termination of business or its reorientation.
- Many members of our association openly say that they work on the edge of profitability. The growth of the key rate, which increases leasing payments, may well become the last straw that will force carriers to shut down their business," he says.
At the same time Vladimir Matyagin reminds that difficulties and problems in the sphere of cargo transportation are cyclical and periodically strengthen or weaken. In any case, this sphere of economy is able to adapt quickly enough to new conditions, so the departure of 10-15% of small carriers will not be critical for the market, he believes.
The process has slowed down
Leasing companies also note a decrease in the rate of conclusion of contracts in the III quarter of this year. According to Ilya Nogotkov, First Deputy General Director of LC "Europlan", if in the first half of the year the volume of new transactions in the segment of commercial vehicles increased by 29%, then at the end of three quarters the growth amounted to only 8%.
- The high rate of the Central Bank directly affects the ability of clients to purchase cars and equipment in leasing. Some clients are refusing or postponing deals. For example, if in the first half of the year the client planned a payment of 100 thousand rubles, now the amount may reach 110 thousand or 120 thousand rubles for the same equipment. This makes businessmen think about the possibility of covering such expenses from their revenue," Ilya Nogotkov told Izvestia.
To the main factors restraining the development of the commercial vehicles segment and the whole auto leasing, in addition to the tight monetary policy, we can add the increase in the utilization fee, deterioration of import conditions, financial condition and payment discipline of clients, he believes. Nevertheless, some customers are gradually finding ways to shift the increased costs to the end user and are beginning to return to the purchase of equipment on new terms, notes Ilya Nogotkov.
A significant transformation of truck leasing in 2024 is also noted in LC Alfa Leasing. According to Dmitry Ignatenko, the head of medium-sized corporate business Dmitry Ignatenko, if last year 85 thousand trucks were leased, this year this figure decreased by 18.9% to 69 thousand. As a result, according to Alfa-Leasing, by the beginning of November 2024, the number of vehicles withdrawn by leasing companies reached 52 thousand units, including 19 thousand trucks.
- Structural changes in the risk policy of leasing companies play an important role. At the end of 2022-beginningof 2023 the market took a course on reduction of advance payment, including deals with zero advance payment. This allowed customers to enter into leasing agreements without initial investment. As a consequence, some customers began to consider leasing with zero down payment as a short-term lease, using the equipment for several months and then returning it to the leasing company, - said Dmitry Ignatenko.
According to him, an additional factor of early return of equipment was the reduction of property value. For example, a dump truck, purchased in leasing at the end of 2023 for 10.5 million rubles, by October 2024 may cost about 9 million rubles. Under such conditions, it becomes economically unprofitable for clients to keep the asset, the expert emphasizes.
By the end of the year many clients, if they have such an opportunity, began to close leasing contracts ahead of schedule and buy out equipment, says Andrei Romaniuk, Head of Commercial Vehicles Sales Department of AAA Traxservice. This was a consequence of the fact that some leasing companies began to change the terms of existing deals in the direction of increasing their value, he emphasized.
-However, not everyone has an opportunity to buy out their equipment. Moreover, a large number of carriers could not pay the payments for their equipment, and it was withdrawn by leasing companies, - added Andrei Romaniuk.
Everything will go up in price
The withdrawal from the trucking market will lead to an increase in tariffs, according to Igor Morzharetto, a partner of the Avtostat analytical agency. For companies that choose to keep their business in this area, it's the only way to offset rising costs. At the same time, the increase in tariffs will eventually fall on the shoulders of the end consumer, he emphasizes.
- Since, to a greater or lesser extent, absolutely all goods are delivered to the point of sale by road transport, the growth of transportation tariffs will eventually lead to an increase in the price of all products - from building materials and industrial equipment to household appliances and foodstuffs," Igor Morzharetto believes.
Anton Shaparin, Vice-President of the National Automobile Union, also considers the growth of transportation tariffs inevitable when a certain part of players leave the market. As a result, this increase will be built into the retail price of each pack of yogurt or loaf of bread, he believes. In addition, to reduce their costs, carriers may well begin to save money on the safety of transportation itself, he believes.
- It is practically unrealistic to renew the extremely old freight fleet with the current prohibitive leasing and loan payments. At the same time, it is much more expensive to keep old equipment in more or less decent condition than to maintain new ones. It will not be possible to save on drivers' salaries - there is a huge shortage of them now. The carrier cannot reduce fuel and leasing costs either. The only thing left to do is to save money on car maintenance. This is a direct threat to road safety," Anton Shaparin told Izvestia.
Increase efficiency
Anton Rumyantsev, a consultant of Strategy Partners consulting company, believes that one of the ways to adapt to high costs in the sphere of cargo transportation is to increase the efficiency of the vehicle fleet. The current model of car operation by Russian carriers can hardly be called highly efficient, he believes. The expert reminded that a truck brings profit and "works off" leasing payments only when it is in motion and transports cargo. During idle time it only accumulates costs.
- We can often observe a picture when a truck just stands near a warehouse for dozens of hours or even several days waiting for loading or unloading. It is definitely impossible to call such a scheme effective," he said at the Comtrans-2024 exhibition.
According to him, this is largely due to the fact that in our country the ratio of tractors to semi-trailers is about 1:1, while abroad it is 1:2-1:2.5. In fact, the tractor in Russia is "tied" to the semi-trailer, which causes significant downtime while waiting for loading and unloading operations, Anton Rumyantsev notes.
At the same time, a number of trucking companies that have their own fleet and their own logistics bases intend to gradually move away from the "one tractor - one semi-trailer" scheme in the future, he noted. According to him, large retailers who transport goods between suppliers, bases and stores themselves are actively thinking about more efficient use of their trucks.
- The construction of new distribution centers provides for the expansion of parking areas by 20-30%. Upon entering such a base, a tractor driver will leave one semi-trailer in the parking lot, which will then be towed to unload it, and immediately pick up another, already loaded, to go on a new trip. This will significantly reduce the idle time of tractors and increase the efficiency of their use," emphasized Anton Rumyantsev.
Meyer Group, a Russian manufacturer of semi-trailers, supports the prospective scheme of cargo transportation.
- We always look positively at all new trends and support the development of our partners, especially when it can favorably affect the development of the industry and the economy as a whole," Alexander Potapov, General Director of the company, told Izvestia. At the same time, he found it difficult to estimate how the new scheme will affect the sales of semi-trailers in our country.
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