What challenges remain for shippers? 🚚
There are many indications that this year will bring some respite and calm to supply chains. The question is, was this the peace of mind that shippers and retailers wanted? In this latest issue of Market Insights ON, we attempt to outline the current situation of supply chains, reflecting on what lies ahead.
💫 Our expert and one of the report’s contributors, 👨🏫Piotr Roczniak, Head of Business Consulting and Data at CargoON, indicated the most telling challenges. We present an excerpt from the report, you can download the whole piece for free below.
🟢 FUEL PRICES
Fuel prices in Europe will depend on a number of factors, such as global oil supply, fuel market demand in Europe and worldwide, the geopolitical situation in other countries, as well as the impact of national energy policies on their fuel markets. Today, it is difficult to predict what the ultimate impact of the conflict in Ukraine will be on fuel prices in Europe. The ongoing war could affect oil prices on global markets, which in turn could affect fuel prices in Europe. If Ukraine’s counter-offensive against Russia leads to an escalation of the conflict and increased tension in the region, there could be hypothetical increases in oil prices. After all, Russia is one of the world’s largest oil manufacturers, and any unrest in the region could affect the supply of oil on global markets and thus impact fuel prices.
🟢 SHORTAGE OF DRIVERS
One of the major challenges in road transport in Europe is the lack of qualified drivers. Due to the increasing demand for transport services, companies must ensure that they employ qualified drivers, the shortage of which continues to be a huge problem. Investing in training and looking for innovative solutions to attract and retain qualified drivers is not yielding the expected results. In 2023, the driver shortage may not be as acute, due to the economic downturn and a decline in demand for transport. In the long term, however, the problem may return in even greater intensity.
🟢 DEMAND FOR TRANSPORT
The economic slowdown in Europe and the uncertain geopolitical situation is leading to reduced economic activity, which in turn results in noticeably lower demand for freight transport. Factors that clearly reduce demand in 2023 are lower demand for products (lower consumption due, among other things, to high inflation and reduced purchasing power), lower economic activity and a decline in investment levels. It is worth noting that a lower cost-carrying capacity of companies also leads to a lower capacity to bear freight costs. This is because manufacturers and distributors cannot easily pass on costs to buyers.
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