The performance of freight transport companies is declining and market competition is strengthening. Rail transporting companies are in the worst situation. Road transporting firms are cutting their costs in order to maintain operation. In the choice of transporting companies (and the method of transportation) price is becoming the most important factor.
The performance of freight transport companies is declining and market competition is strengthening. Rail transporting companies are in the worst situation. Road transporting firms are cutting their costs in order to maintain operation. In the choice of transporting companies (and the method of transportation) price is becoming the most important factor.
In July 2009 GKI Economic Research Co. made an analysis on the domestic trends of freight transport in the light of the economic crisis. The research evaluated the current situation of the Hungarian freight transport sector in Europe, examined the performance of domestic freight transport, and made an overview on the most important planned and implemented road and rail investment as well as their expected impacts. We contacted personally several transport companies and other big firms with significant transport needs in order to identify their views on the prospects of freight transport.
Road freight transporting firms with relative low turnover are in a very difficult situation, due to declining demand caused by the economic crisis. A big number of road transporting respondents struggle for survival. Even the largest transporting companies implemented significant cost cuts as a response to the economic crisis. Despite the crisis, the position of smaller rail transport companies is considered to be relatively stable due to their extensive formal and informal contacts to partners and their flexibility. The high price for the use of the railway infrastructure to be introduced at the end of 2010 is considered to be the greatest danger by railway transporting firms, and the majority of them expect a decline in their turnover.
Many respondents indicated that at a lower price they would favour freight transport by rail more, although it is true that in the choice of the mode of transport, price has an important role, but it is not always the primary factor. Environmental considerations are not taken into account in practice in the choice of the mode of transport, since cost efficiency is substantially more important for the respondents. The majority of the respondents expect the stagnation of current freight transport demand.
With lower freight demand and the only slowly reducible transport capacities market competition is increasing, weaker companies are defaulting. Price reductions are expected in the whole sector. In 2010 the fall of freight transport performance is projected to slow down, whereas a stagnation at a lower level in annual average is expected, then in 2011 with the recovery of freight transport intensive sectors slight growth is anticipated.
