Russian Trucking Companies & Shippers Face Challenges

Trucking firms in Russia are consolidating and expanding their services in order to survive the country’s stagnant economy and remain competitive with containerized rail transportation, according to the Journal of Commerce.

Consolidation is most directly impacting small- and medium-sized Russian trucking companies with fleets of up to 50 trucks that make up nearly 90 percent of Russia’s trucking capacity. Large trucking operations with 100 tractors or more make up 10 percent of the market.

As the deteriorating market hit shippers, they sought to cut costs wherever possible, putting strain on Russian truckers and transportation firms, according to an official spokesperson of Russia’s Minister of Transport Maxim Sokolov. In addition to smaller companies, consolidation is also disproportionately impacting niche carriers, the ministry said.

Several trucking companies that specialize in containerized cargo have had to declare bankruptcy since the beginning of the year.  The current financial uncertainty in Russia and poor business climate were the major reasons for their bankruptcy.

In addition to competing on costs, Russian trucking companies are now expanding their value-added services, introducing door-to-door delivery and allowing for deferred payments. Many carriers have also revised their pricing policies with the aim of making them more flexible.

In addition to economic challenges, Russia’s trucking companies must deal with a newly reinvigorated RZD, the state railway monopoly.  RZD has announced plans to cut the cost of shipping by rail to compete with trucking and also said that it would reduce transit times via investments in new infrastructure.

The railroad has begun to offer personal managers for its most important clients and even floated the idea of high-speed container trains. RZD is also preparing to introduce a new web tool that will allow the ordering of complex transport services via the internet.

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