Eastern slump leaves trucks sitting idle
"I don't see a light at the end of the tunnel," said Andrzej Marciszak, general manager of Transforwarding Polska, a Polish unit of the Dutch freight forwarder.
Shipments to Russia and Eastern countries accounted for about 30% of international road shipments through Poland before this summer's crisis. That business has fallen by at least 70% since August, transport companies said. As a result, these firms have scrambled to redirect activities to other markets, but this has led to an oversupply and a 15% reduction in prices.
"A few months ago when you read the paper there were advertisements saying, 'I would like to buy a transportation firm with an international license.' Now you read, 'I'm selling the firm,'" said Jerzy Juszkiewicz, transportation director for Euroad, a U.S.-owned, but Poland-based transportation company that has 80 trucks licensed for international transport. "It must be bad," he added.
Before August, the government's Office for International Transport Service (BOTM) issued 300 permits a day for shipments to Russia, said Michal Jarucki, BOTM director. Now the office issues 30 permits a day, he added.
The downturn has affected both large and small firms among the 7,000 companies offering international road transport in Poland, which have about 23,000 licensed trucks.
Until this fall, Euroad had half its fleet constantly traveling to Russia. But in September and October, the company has hardly had a single order for a shipment to Russia. "We had to re-orient for other directions," Juszkiewicz said.
But these new destinations have become less profitable. Before August, freight forwarding companies charged DM 2,000 to deliver a 25-ton truck from central Poland to Belgium or the Netherlands. Now the price has dropped to DM 1,700, said Transforwarding's Marciszak.
"There is an oversupply of trucks," he said. Marciszak estimates that 70% of trucks that were once traveling to Russia are now plying routes in Western and Southern Europe.
Before August, Transforwarding sent an average of 30 trucks a month to Russia. It has not had a single shipment for the past two months, Marciszak said.
But switching business West isn't a viable option for all companies and some may face bankruptcy. "Unfortunately not all were lucky, the situation is very difficult," said Jarucki.
This is especially true for small transport companies. Rafal Nocun, who runs a small international transportation firm in the town of Zawiercie, earlier this year had three medium-sized trucks and averaged 10 shipments a month.
But drops in international shipments - Nocun had only one order in November - forced the small businessman to lay off one driver and sell two of his vehicles. Nocun planned to keep only one truck that he will drive himself. "But unless the situation improves by spring I give up," he said. "I don't know what I'm going to do."
The bleak outlook, along with poor conditions on the stock market have already taken their toll on transport companies looking to raise capital. Poland's largest transportation company, Pekaes Auto-Transport, was forced this fall to postpone its initial public offering (IPO).
Pekaes had planned to offer 12 million shares in late November or early December, but decided to postpone the issue until an unspecified date next year, said Katarzyna Iwaniuk, the IPO manager with CDM Pekao brokerage house.
Another firm, Trans Universal managed to sell 2 million new shares in a June IPO for zl. 3 a share, but has yet to begin trading on the Warsaw Stock Exchange (WSE), said Agnieszka Szostek, a spokeswoman for Universal, which holds an 84% stake in Trans Universal. Szostek did not know why the shares had not yet started trading and officials with Trans Universal were unavailable for comment.
The weakening in the transport industry is also starting to spread beyond the sector. Suppliers of heavy trucks are seeing sales stagnate as transport companies grapple with the new uncertainty on the market.
Volvo Truck Poland, a unit of the Swedish automobile giant, expected to sell 1,800 trucks this year, said Piotr Wysocki, information manager with the company. But that goal is questionable with 1,400 trucks sold by the end of October and many companies delaying purchasing decisions.
"There is not a sharp drop, but it is reasonable to say that the companies won't meet their targets," Wysocki said. But the drop off won't crush improvement at the truck maker. Even if sales stay at the end October level, the company will have moved 10% more units than last year.
Shipments to Russia and Eastern countries accounted for about 30% of international road shipments through Poland before this summer's crisis. That business has fallen by at least 70% since August, transport companies said. As a result, these firms have scrambled to redirect activities to other markets, but this has led to an oversupply and a 15% reduction in prices.
"A few months ago when you read the paper there were advertisements saying, 'I would like to buy a transportation firm with an international license.' Now you read, 'I'm selling the firm,'" said Jerzy Juszkiewicz, transportation director for Euroad, a U.S.-owned, but Poland-based transportation company that has 80 trucks licensed for international transport. "It must be bad," he added.
Before August, the government's Office for International Transport Service (BOTM) issued 300 permits a day for shipments to Russia, said Michal Jarucki, BOTM director. Now the office issues 30 permits a day, he added.
The downturn has affected both large and small firms among the 7,000 companies offering international road transport in Poland, which have about 23,000 licensed trucks.
Until this fall, Euroad had half its fleet constantly traveling to Russia. But in September and October, the company has hardly had a single order for a shipment to Russia. "We had to re-orient for other directions," Juszkiewicz said.
But these new destinations have become less profitable. Before August, freight forwarding companies charged DM 2,000 to deliver a 25-ton truck from central Poland to Belgium or the Netherlands. Now the price has dropped to DM 1,700, said Transforwarding's Marciszak.
"There is an oversupply of trucks," he said. Marciszak estimates that 70% of trucks that were once traveling to Russia are now plying routes in Western and Southern Europe.
Before August, Transforwarding sent an average of 30 trucks a month to Russia. It has not had a single shipment for the past two months, Marciszak said.
But switching business West isn't a viable option for all companies and some may face bankruptcy. "Unfortunately not all were lucky, the situation is very difficult," said Jarucki.
This is especially true for small transport companies. Rafal Nocun, who runs a small international transportation firm in the town of Zawiercie, earlier this year had three medium-sized trucks and averaged 10 shipments a month.
But drops in international shipments - Nocun had only one order in November - forced the small businessman to lay off one driver and sell two of his vehicles. Nocun planned to keep only one truck that he will drive himself. "But unless the situation improves by spring I give up," he said. "I don't know what I'm going to do."
The bleak outlook, along with poor conditions on the stock market have already taken their toll on transport companies looking to raise capital. Poland's largest transportation company, Pekaes Auto-Transport, was forced this fall to postpone its initial public offering (IPO).
Pekaes had planned to offer 12 million shares in late November or early December, but decided to postpone the issue until an unspecified date next year, said Katarzyna Iwaniuk, the IPO manager with CDM Pekao brokerage house.
Another firm, Trans Universal managed to sell 2 million new shares in a June IPO for zl. 3 a share, but has yet to begin trading on the Warsaw Stock Exchange (WSE), said Agnieszka Szostek, a spokeswoman for Universal, which holds an 84% stake in Trans Universal. Szostek did not know why the shares had not yet started trading and officials with Trans Universal were unavailable for comment.
The weakening in the transport industry is also starting to spread beyond the sector. Suppliers of heavy trucks are seeing sales stagnate as transport companies grapple with the new uncertainty on the market.
Volvo Truck Poland, a unit of the Swedish automobile giant, expected to sell 1,800 trucks this year, said Piotr Wysocki, information manager with the company. But that goal is questionable with 1,400 trucks sold by the end of October and many companies delaying purchasing decisions.
"There is not a sharp drop, but it is reasonable to say that the companies won't meet their targets," Wysocki said. But the drop off won't crush improvement at the truck maker. Even if sales stay at the end October level, the company will have moved 10% more units than last year.
