Freight companies warned of the risk of bankruptcies in the market

Due to Western sanctions, trucking tariffs are falling, while prices for spare parts and consumables are rising, transport companies said.This threatens the industry with losses and problems with fleet renewal.

The freight transportation index FTL.RF, which reflects the change in tariffs for road transportation to 100 popular destinations in RUSSIA, decreased from the beginning of March by June 1 by 13.2%, to 1141 points. In particular, on the route St. Petersburg - Moscow, carriers use a tariff of 33.3 rubles. per kilometer, which is 34.3% less than three months ago. This follows from the presentation of the ATI.SU freight exchange presented at the Transport Logistics: Supernovae Reality conference (transactions on the ATI.SU exchange daily cover 300,000 participants, 250,000 cargo and 100,000 vehicles), which RBC got acquainted with.

The FTL.RF index can only be used as a guideline, says Roman Tinyaev, DIRECTOR of the Transport and Logistics practice at Strategy Partners: these exchanges do not take into account medium-term contracts - they fix the rate for months in advance.

The fall in rates leaves almost no room for development, Fail Shigabutdinov, CEO of GLT (there are more than 1.3 thousand road trains in the fleet), told RBC. The situation threatens to reduce profitability and, as a result, losses and problems with fleet renewal, adds Vladimir Tyan, managing director of Sovtransavto (more than 700 road trains).

Why rates have dropped

In April, the EU countries stopped letting trucks from Russia in connection with a military special operation in Ukraine. The logistics system, which was formed over decades, has changed, says German Raskin, founder of the Loginet it platform. In May, the HEAD of the Ministry of Transport, Vitaly Savelyev, said that the sanctions "virtually broke all the logistics in the country", so Moscow is forced to look for new logistics corridors.

According to the Association of International Road Carriers, 3.1 thousand Russian companies with a fleet of 45 thousand road trains were engaged in the delivery of goods to the EU. Most switched to flights within Russia, creating an additional offer. According to Danil Rudakov, the founder of the online freight forwarder Deliver, as a result, there is an excess of transport on the market: previously, 1 million cars accounted for 300,000 daily loadings, now 1.1 million cars account for 180,000 loadings.

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As a result, tariffs for cargo transportation began to decrease, in some areas - by 25%, says Valentin Kuliev, head of the direction for working with carriers at Oboz. “The balance of supply and demand has not been achieved, there is a possibility of further tariff cuts, the market has not reached the bottom,” he warns. Rudakov notes that tariffs fall mainly on transportation from Moscow (by 40-50%). In April, the price of transporting a 20-ton refrigerator from Moscow to Novosibirsk fell from 200,000 to 150,000 rubles. And to Yekaterinburg and St. Petersburg, goods leave the capital at a rate 30-40% lower than in 2021, adds Igor Kotov, managing partner of the GroozGo service. Rates for flights from St. Petersburg fell due to a drop in the turnover of the local port of St. Petersburg (due to sanctions, the figure was almost halved), explains Tinyaev.

The decline in traffic is more noticeable in the western part of Russia, bordering Europe, says Viktor Stroykov, head of the Monopoly group (there are 1,000 trucks in the fleet). As a result, there is high competition for cargo and reduced tariffs. The price of transportation on a number of interregional routes has not changed and even increased, Rudakov continues, without giving details. There has been a redistribution of cargo flows - from Moscow and St. Petersburg to other regions, a Delko representative agrees (there are 3.6 thousand cars in the fleet).

In addition, there is a shortage in a number of new corridors, Raskin notes. Thus, the number of applications for transportation to Russia from Georgia (growth by more than 100%) and Kazakhstan (by more than 76%) is growing. According to Kotov, the excess of cars is completely invisible: “Transport has returned to the pre-pandemic level of confirmation of applications, there is healthy competition.”

What other problems do carriers face?

In addition to falling rates, companies faced an increase in the cost of transportation, and it continued to grow, a Delko representative is sure: “Mainly due to an increase in the cost of spare parts, higher insurance costs and rising inflation.” After the start of the special operation in Ukraine, the ruble fell sharply, and suppliers of spare parts sharply raised prices, says Shigabutdinov. The increase in prices for components for his company amounted to 70%. The cost price increased by an average of 5.5 rubles. per mile, he says.

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Another problem for carriers is the supply of new cars. “It was expected that 25 thousand units of new equipment would enter the market, but now we are talking about only 5 thousand, despite the fact that the main array of trucks in Russia is 20 years old,” says a Delko representative. There are difficulties with the supply of imported spare parts.

In April, the head of the Ministry of Industry and Trade, Denis Manturov, approved a list of goods for parallel imports. The list contains sufficient products from Scania and Volvo, which can be imported without the permission of the copyright holder, the representative of Delko notes, but there are no products from Mercedes, MAN, Iveco, DAF, Isuzu and there are not a number of products for repair - for example, rubber products.

RBC sent a request to the press service of the Ministry of Industry and Trade.

How do governments help companies?

Chairman of the Board of the United Association of Carriers Bohdan Antonenko calls the authorities' measures to support the industry unprecedented. Among them are the following:

government grants and concessional loans; partial cancellation of weight and size control; now it is not necessary to obtain special permits for transportation if the carrying capacity of the transport is exceeded by less than 10% of the factory settings (previously - by 2%), adds the general director of the Traft carrier Artur Muradyan; refusal to increase Platon's tariffs.

However, given the volume of sanctions against transport and reduced demand, this is not enough, Tian said. Additional support measures are needed, agrees Maria Stepanova, the official representative of Globaltruck (there are more than 1.3 thousand road trains in the fleet). They say it is necessary to contain the rise in fuel prices, resolve issues of expedited customs clearance, help develop logistics corridors in the east, and temporarily reduce toll rates. Another problem remains "widespread non-compliance with legislation, primarily tax legislation," says Yevgeny Babaev, president of the Iteko group (there are 3,500 cars in the fleet). “In a crisis, it is the conscientious [market] participants who take the brunt,” he says.

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The situation on the market may lead to a reduction in the number of small carriers (individual entrepreneurs and self-employed), Kuliev believes. “It might be more profitable for them to put their own car in the parking lot and start working for a large company,” he explains. Stepanova believes that about 10% of small players may leave the market. But Shigabutdinov predicts that the industry is waiting for the mass exit of the majority of players and bankruptcy. If rates continue to fall, there is a risk that white players will leave the market, Tinyaev agrees.

According to a RBC source close to the government, a “systemic solution” is being worked out there to support the industry, taking into account the interests of carriers, shippers and consignees. The authorities are also monitoring the situation so that the market does not go into a gray area, he added. The press service of the government recommended that the Ministry of Transport be contacted for comments on the situation on the market. RBC sent a request to his representative.

When will the market return to growth?

The road freight transportation market is divided into two main segments - with a full load of vehicles (Full Truck Load, FTL) and transportation of groupage cargo (Less than Truck Load, LTL). According to Strategy Partners, in 2020 the market volume amounted to 1.8 trillion rubles, of which 1.6 trillion were FTL.

According to Tinyaev, in 2021 this segment grew by 10-15%, to 1.8 trillion rubles. In 2022, it can grow up to 1.9 trillion rubles. - due to the growing cost of transport companies and the seasonal increase in demand in the fall, he adds.

The inevitable increase in rates will begin with an increase in tariffs for refrigerated transportation, Kuliev is sure. In the summer, customers with temperature-controlled cargo (such as dairy products) will be ready to renegotiate rates, he said, because refrigerated truck operators are facing rising costs to ensure the quality of transportation.

It is possible to talk about the growth of tariffs by 20-30% in the near future, as soon as the cargo owners run out of goods, Raskin is sure. But Globaltruck predicts tariff growth only from the fourth quarter of 2022. Market recovery may begin in the first half of 2023, the GLT representative clarifies.

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