Shortage of personnel and rising costs: Alfa-Leasing Group told about the main problems of the road freight market

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Alfa-Leasing 18 April 2024 15:20

By the end of 2023, the volume of truck traffic in Russia increased by 12%. But the main problems of the logistics industry – the shortage of personnel and rising costs – remained unresolved. What will accelerate the full recovery of the industry, Alfa-Leasing Group told.

In Russia, the volume of road freight traffic in 2023 increased by 12% compared to 2022, especially in domestic traffic. The main prerequisite for this was the active development of marketplaces and e-commerce. In addition, the turnover of industrial enterprises is growing in the country, whose products need to be promptly shipped to consumers.  Increased demand for delivery to retail chains is another reason for the positive dynamics. The volume of traffic to retail outlets increased by 26% year-on-year. The express delivery market has seen a 45% increase in demand and a 63% increase in cargo turnover. In addition, last year, road transport partially covered the volume of railway transportation, especially during periods of railway downtime due to bad weather.

International road freight transportation shows a more moderate growth. For example, the volume of the European market in 2023 decreased by 0.4% in real terms to 448 million euros compared to 2022. Belarus remains the leader in absolute volumes of international road transport - the growth of applications in export traffic increased by 48%, in import traffic — by 41%.

China is also doing well in terms of traffic volume: The number of applications for imports increased 3 times, for exports – by 88%. Cargo transportation to and from China includes consumer goods and equipment, in addition, in 2023, the customs restriction on fruit supplies from China was lifted, and therefore the number of orders for refrigerated transportation increased.

In other countries with which Russia has established trade, there is a decrease in demand for international road freight. However, the negative results are indirectly affected not only by the low patency of border posts, but also by the shortage of qualified personnel and, in general, the increase in costs of logistics companies. For example, the shortage of truckers caused a 27.9% increase in prices for trucking goods by the beginning of 2024. Now the labor market in Russia in this direction is the job seeker's market, where they have the opportunity to demand an increase in the salary level, a convenient schedule and working conditions for them. Despite this, the influx of new personnel into the industry is quite weak. The average age of truckers is 45-55 years. Excessive demand for staff, together with low demand, can raise salaries in the logistics sector by another 20-30% in 2024, as the ratio of vacancies to resumes in the industry is now 3:1.

Now the costs of logistics companies, in addition to the shortage of drivers and rising salary expectations, are growing due to the rise in the cost of fuel and vehicle maintenance. Accordingly, this is reflected in the cost of transportation. Thus, in 2023, prices for road freight transportation in Russia increased by an average of 27.9%, and in the last three months there has been an increase of 6.1%. Flights from Moscow to Nizhny Novgorod have risen in price especially noticeably — by 72.6%. At the same time, the cost of delivery from Moscow to Yekaterinburg decreased by 7.4%. International tariffs have also increased: exports from Russia have risen in price by 16%, and imports by 12%.

The revival of specialized educational institutions by the state, which used to be located in different regions of the country and trained professional drivers of categories D and CE, as well as work on popularization of the driver's profession, will help to overcome the personnel shortage. Logistics companies should privately consider organizing their own short-term training courses to train specialized personnel. Leasing with minimal initial costs on favorable terms for business representatives will help to reduce the operating costs of updating fleets and warehouse equipment.

"In order to keep prices for road freight transportation rising, the industry needs automation and digitalization, due to which it is possible to reduce part of operating costs, optimize routes and improve the efficiency of transport use," says Anna Grakhova, head of the department for work with medium–sized corporate business of Alfa-Leasing Group. – But in the field of cargo transportation, not only drivers are missing, but also warehouse workers, loaders, couriers, forwarders. Here, too, digitization of a number of processes will be the optimal solution. For example, test shipments using electronic waybills began in 2023, and their full transition to online is expected in 2024. This year, the number of robots involved in many operational processes in warehouses is also growing."

Please note that this press release is based on materials provided by the company. AK&M Information Agency shall not be held liable for its contents, nor for the legal and other consequences of its publication.