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The Warsaw Voice » Business » April 16, 2008
Special Section - Transportation & Logistics
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Moving Ahead
April 16, 2008   
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The transport and logistics industries are an economic "circulatory system" of sorts. The positive economic outlook, coupled with global economic trends and Poland's central European location, all add up to excellent developmental prospects. The influx of EU funds is additionally expected to improve the country's road and rail infrastructure on which the sector depends. Transport and logistics are set to become even more important to Poland.

This sector accounts for zl.100 billion, some 5 percent of GDP, and employs around 400,000 people. "Nearshoring" by Western European firms to Central and Eastern Europe has really seen the sector take off as Poland has so far grabbed a 30 percent slice of this wave of foreign investment by dint of being the largest market in the region.

The constant pressure to cut costs and focus on core business has been leading companies to outsource transport and logistics. Poland's transport industry has been growing by around 6.5 percent annually since 1994. The nature of the industry has been changing dramatically. Road transport has been rapidly increasing its market share at the expense of rail and now accounts for more than 60 percent. Many new road carriers have been sidestepping the competition by poaching customers from other types of carrier through lower prices and other benefits.

But the market remains considerably fragmented. Poland has about 43,000 transport firms, most of which are small companies with small fleets. The country also has around 38,000 firms offering road transport services as a sideline. Firms employing more than nine people account for less than 10 percent of orders and 36 percent of goods handled. As small firms do not have the capacity to take on bigger orders or larger customers, a good deal of consolidation is expected over the next few years. Small firms unable to find niche markets will have to survive on subcontracting for larger players.

New opportunities opened up when the borders did once Poland joined the EU in May 2004. By the beginning of 2007, the number of firms holding international transport licenses had shot up from 9,000 to over 16,000 and the number of vehicles in service had doubled. Most vehicles being relatively new have few problems meeting EU and other requirements.

But it's not all singing and dancing. Transport companies have to contend with rising fuel and labor costs and a poor road infrastructure. Poland has 381,500 kilometers of road of which 18,255 km, or around 5 percent, is national highway. This figure includes 673 km of freeway and 230 km of expressway, the lowest density in the EU. Poland also has too few beltways and many of the country's bridges and overpasses cannot cope with heavy traffic. The General Directorate for National Roads and Motorways (GDDKiA) rates 49 percent of roads good, 26 percent satisfactory and 25 percent unsatisfactory. The average truck speed here is half that in Western Europe. But all is not lost. EU largesse might just save the situation. Between zl.120 billion and zl.150 billion can be pressed into service in the 2007-2013 period, according to the Ministry of Transport. The government is planning to have 80 percent of national roads classified as "good" by tripling the amount of freeways and building 2,000 km of expressways by 2013. This all sounds impressive but experience in recent years provides grounds for skepticism. The paltry 200-odd km of freeways and expressways built over the last three years says a great deal about government efficiency.
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