Transportation challenges: every second company may leave the road logistics industry

High costs, fines for overloading, increased credit and leasing payments may lead to up to half of logistics companies leaving the road freight transportation market this year, according to the association Gruzavtotrans. Experts recognize serious problems in the industry, but believe that they will not have such a global impact on the market. Details - in the material of "Izvestia".

Large-capacity problems

This year, the market of road freight transportation may leave up to half of the companies engaged in this type of business. This was announced at a press conference at the MICE "Izvestia" by the president of the association "Gruzavtotrans", chairman of the subcommittee on freight transport and weight and dimensional control at the Public Council at Rostransnadzor Vladimir Matyagin. This is due to a sharp increase in the financial burden that has recently fallen on logistics companies, he said.

According to him, last year the trucking companies' expenses for fuel increased by about 10%; due to the shortage of personnel, in order to retain truck drivers, the companies have to raise their salaries, which now reach an average of 150-200 thousand rubles. The increase in the key rate and the indexation of the recycling fee also contribute to the increase in carriers' expenses, said Vladimir Matyagin.

- Last year, the key rate increased by 6% in total. As a consequence, banks and leasing companies raised interest rates on loans and leasing. As a result, we see a mass refusal of carriers from leased vans: companies are simply unable to repay monthly payments. In addition, the cost of the equipment itself has also increased due to the increase in the utilization fee. At the same time the rates for freight transportation have not changed, and in some cases even slightly decreased, - said Vladimir Matyagin.

This has a negative impact on the natural aging of vehicles that transport cargo in Russia. According to Vladimir Matyagin, the average age of a truck in the Russian fleet is now 23 years and growing. Under conditions of high credit and leasing payments, carriers simply do not have the opportunity to renew the fleet, he noted.

As "Izvestia" reported earlier, as of the end of last year there were more than 17 thousand units of truck equipment on the sites of leasing companies, which were returned by transportation companies because of the inability to pay for leasing.

Due to increased costs, according to Gruzavtotrans, many automobile logistics companies are now not only not making a profit, but also operating at a loss. On average, the profitability is -17% of the cost of transportation itself, said the president of the association.

Foreigners will come to Russia

Vladimir Matyagin calls another factor of pressure on domestic road freight carriers the possibility for foreign companies to work from March 1, 2025 on transportation within the country. He reminded that from that date amendments to the legislation allowing cabotage in Russia will come into force - a scheme under which carriers from other countries, after completion of an international voyage, have the right to take orders for delivery of cargo between Russian loading and unloading points.

According to amendments to the law "On State Control of International Road Transportation" and "Statute of Road Transport and Urban Land Transport" adopted at the end of 2022, from March 1, foreign carriers are allowed to make no more than three consecutive flights within Russia within seven days after the first unloading in our country. This will already aggravate the difficult situation in which Russian carriers are now, says the president of Gruzavtotrans.

- Foreigners have lower costs than Russian companies, including due to lower leasing payments and lower costs for maintenance of vehicles. They will "drop" the already low rates for freight transportation. It is absolutely incomprehensible why we are launching foreign companies in our country, while domestic carriers are barely making ends meet," says Vladimir Matyagin.

Another "bonus" for foreign companies that will work by cabotage, he calls difficulties with administration and registration of fines for overweight for such carriers. However, the Ministry of Transport of the Russian Federation has already promised to block the exit from Russia of foreign trucks that violate the established rules.

Framework issue

Vladimir Matyagin notes that the increase in fines for violations of traffic rules, in particular for overweight, since January 1 has become a significant additional burden on motor carriers. Now non-compliance with the norm is "estimated" at 375-600 thousand rubles against the previous 250-400 thousand.

- Undoubtedly, fines for overloading are necessary, the issue is that automatic weight and dimensional control points (APVGK), on the basis of which these fines are issued, due to defects in the roadway very often give erroneous measurement results. Practice shows that it is extremely difficult for carriers to prove that the frame worked incorrectly. The cases when it was possible to cancel fines from the APVGK are few, and as a rule it happens only after the intervention of the prosecutor's office, - said Vladimir Matyagin.

In addition, with the traditional introduction of spring restrictions on the passage of heavy trucks on the roads APVGK openly work to the detriment of even law-abiding carriers, he notes. By setting restrictions on the so-called "drying" of roads in the spring, regional authorities introduce a list of goods for the transportation of which these barriers do not apply, recalled Matyagin. As a rule, these are foodstuffs, fuel, medicines, some other essential goods.

- The result is an absurd situation: a truck is carrying food, and temporary load restrictions do not apply to it. But the carrier will still get a fine from the APVCC - the frame does not see what is in the back of the car. At the same time, the company first has to pay the fine, and then to dispute it for a long time, proving its rightness, - said the president of Gruzavtotrans.

Self-cleaning

Carriers do have a significant increase in costs, but they are unlikely to lead to a sharp reduction in the number of players in this market, says Taras Koval, president of the Association of Transport Experts and Specialists. According to him, unlike other modes of transportation, the sphere of road freight transportation is very flexible and can adapt quickly.

- It is obvious that the road freight transportation market is likely to transform and change. But even if one or another company closes down, another company will quickly take its place. The market will naturally get rid of weak players, it will be self-cleansing. At the same time, the forecasts that we are expecting the departure of half of the cargo carriers are, in my opinion, overly pessimistic," Taras Koval told Izvestia.

The possibility of cabotage will somewhat worsen the situation of domestic carriers, but it is unlikely to radically affect the industry as a whole, the expert believes. According to him, the requirements that will be imposed on foreign carriers that decide to take orders for transportation within the country, "are comparable to obtaining a permit for the departure of the aircraft." In addition, foreign companies will be able to work on domestic transportation for a rather short time, so the geography of such trips will be limited, he believes.

- A foreign company is given a week for short sea transportation. Taking into account possible delays in loading and unloading, at best it will be able to make only a couple of domestic trips during this time. Otherwise, the truck will simply not be able to leave Russia in time," emphasized Taras Koval.

The figure solves

Anton Shaparin, Vice-President of the National Automobile Union, is sure that the problem with incorrect work of APVCC and long terms of appealing fines for overweight is leveled by digitalization of these processes.

- The issue with the fact that the frames do not see the contents of the truck and send carriers unjustified fines, is solved by more active use of electronic waybills, which specify the type of cargo, and integration of this information with databases, which determine the owner of the car that receives the fine, - he believes.

Anton Shaparin also doubts that the number of automobile carriers may halve. In his opinion, such a development is unlikely. He cites statistics, according to which 70% of freight transportation in our country is carried out by motor transport.

- Now the emphasis is on whitewashing of trucking companies. Therefore, first of all, firms that do not want to work according to the established rules may leave the market. First of all, these are small players, - believes the vice-president of NAC.

Big fish

Igor Morzharetto, a partner of the Avtostat analytical agency, admits that the Russian road freight transportation industry is in a difficult situation. The main difficulties are experienced by small and medium-sized businesses, he notes. It is such companies, which do not have impressive financial resources due to expensive credit or leasing contracts, that find it more difficult to renew their vehicle fleet, and large fines for one or another violation are also more sensitive for them, the expert emphasizes.

- It is likely that a certain part of carriers, mainly small companies, will eventually leave this business or reorient themselves to the low-tonnage segment of transportation, which is gaining momentum. As a result, the basis of transportation by heavy trucks will eventually be formed by large logistics firms," Igor Morzharetto believes.