Transport and logistics companies have nothing to complain about in terms of volumes: demand will grow by at least two per cent over the next few years. Yet due to persistent price pressure and rising costs, turnover growth still lags behind.
This is according to ING Economic Bureau's new transport and logistics outlook. In 2017, growing demand of 2.5 per cent is expected for the sector. Growth is also on the cards for 2018, yet sector-wide price levels still lag behind, while costs are rising again. Financial progress will therefore mainly come from increased demand and efficiency improvements.
Price pressure remains a hard sell
Price pressure will continue to run like a thread through the sector in the coming years. Companies in logistics are still not in a strong position when it comes to price negotiations. Nevertheless, lower fuel costs and productivity improvements ensured a better operating result in 2016. For 2017, however, ING expects costs to rise due to higher wages and fuel costs. This could put pressure on sales. The bank sees strategic collaboration as the answer to these challenges. In addition, companies should focus on efficiency improvements. "As higher rates realise transport and logistics companies do not succeed enough, it is mainly about making strokes in efficiency. This goes hand in hand with increasing intelligence supported by data and ICT, which, for example, ensures higher utilisation and load factors," the bank said.
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