Analysis Gebrüder Weiss Romania: Transport and logistics market in 2024 – from challenges to opportunities

In 2023, the local transport and logistics market, at all its levels, went through a period of adjustment, marked on the one hand by important opportunities, but also by challenges, according to an analysis carried out by Gebrüder Weiss Romania. Of course, the effects will be visible in 2024 as well, but still this year is marked by optimism, even if a reserved one.

The new government requirements and fiscal policies adopted, such as the implementation of the e-Invoice, e-Transport or SAF-T (Standard Audit File for Tax) system, but also the policies to increase the minimum wage in the economy and the labor shortage were the main pressures felt by the business environment. However, these local challenges have been combined with the effects of international events, such as regional conflicts and the general inflationary context. Thus, an additional effort was required for companies, both in terms of human resources and financially, to comply with these new requirements and to adapt their operational processes.

Boosting the industry – Investing in the local transport infrastructure

The development of transport infrastructure and the alignment of regulations with international standards represented a challenge, but also a crucial opportunity for improving the efficiency and competitiveness of the logistics industry in Romania in 2023. Several major projects such as the expansion and modernization of the network of highways and express roads are took place in 2023. For example, the A1 Autostrada (Soarelui Autostrada), the A3 Autostrada (Transilvania Autostrada), as well as the Brașov – Cluj-Napoca and Pitești – Sibiu expressways. These projects have facilitated the transport of goods by road, reducing travel time and associated costs.

The investments also considered the port and railway infrastructure. For example, the Port of Constanța continued to be a crucial transit point for goods, and upgrades were made to improve operational efficiency and port capacity. Improvements to railway infrastructure were also on the development agenda, with the aim of increasing inter-connectivity between different regions of the country and promoting rail freight as an alternative to road transport. The modernization and electrification of some railway lines have increased the efficiency and capacity of the railway network.

The logistics and air transport segments, pillars of sustainability

Regarding the logistics segment, last year saw a steady increase in the demand for services, fueled by the continued expansion of the industry and the strengthening of the country’s position as a logistics hub in the Eastern European region.

Air transport has also proven to be a pillar for growth, providing quality and timely service even during difficult times. In this sector, some key entities that have helped stabilize this segment are manufacturing, e-commerce and FMCG companies. In the first part of 2023, demand for air transport was below the level of the previous year, causing excess supply from airlines and a drop in prices. However, in the second half of the year, the global economic recovery intensified demand and cargo volumes showed a solid upward trend, especially in the context of difficulties in maritime transport.

Global challenges with local response

The transport and logistics market was deeply influenced, last year, by a series of significant events, which shaped the dynamics and imposed new directions for the sector. Among them, regional conflicts, climate change and the integration of electric vehicles in supply chains stood out as particularly influential”, said Viorel Leca, General Manager of Gebrüder Weiss Romania.

Regional conflicts, such as the ongoing one in Ukraine and those that erupted during 2023, including tensions between Israel and Hamas and attacks in the Red Sea, have had a direct impact on the security and efficiency of globalized supply chains. These have contributed to increased uncertainty in the market, affecting the prices and availability of transport services, and have required quick adaptations by companies, such as detour routes, to keep the flow of goods uninterrupted.

In addition to these challenges, climate change has become increasingly evident, with direct effects on the transport and logistics industry. For example, the problem of drought and increased sea temperatures that have affected traffic through the Panama Canal illustrates how extreme weather events can disrupt traditional trade routes and drive up freight rates.

Another aspect relevant to 2023 was the increasing integration of electric vehicles (EVs) into supply chains in response to the need for sustainability and carbon footprint reduction. This trend reflects a significant change in the industry, with companies increasingly investing in green technologies to optimize their operations and meet growing demands for eco-friendly services.

“All these have tested the resilience of supply chains, imposed new operating strategies and imposed an accelerated movement towards sustainability and green technologies, underscoring the need for innovation and flexibility in the face of a constantly changing global landscape,” Viorel Leca said.

The trends of 2024 – a difficult year, but still marked by optimism

Even though the beginning of the year brought a slight drop in international traffic and a contraction in consumption and purchasing power, there is reserved optimism that things will stabilize in 2024. This period requires adaptation and flexibility to manage economic and political changes.

Thus, in the context of the globalization of the economy and international trade, an increase in demand for transport and logistics services in Romania is expected. Advanced technologies, sustainability and adaptation to political changes will be a priority for profile companies, and infrastructure investments will play a crucial role in improving the efficiency of the sector.

Expectations are moderately optimistic on the maritime and air transport segment, with the awareness that the economic environment will be closely linked to the political one, in a year also marked by major electoral events.

“A difficult year awaits us, with declining volumes and reduced profit margins, similar to the situation in Europe in this first part of the year. In front of the customer, the difference will be made by companies that manage to attract and keep motivated and engaged people, who bring real value through their activity”, declared, for her part, Adelina Anghel, Area Manager East, Gebrüder Weiss Romania.

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