Russia offers some of the best long term prospects in Europe for logistics and express companies, according to a new report by Transport Intelligence.
Author Raphael Chalogany accepts that even during the good times the Russian business environment is one of the most challenging in the world.
“Inefficiency, bureaucracy and corruption are rife and security is still a major issue for logistics companies and shippers. Systemic structural problems combine with the vast geography of the country to create truly unique supply chain challenges.”
The report identified ten reasons why the market continues to attract foreign logistics and express companies:
1. Russia remains one of the fastest growing economies in the world. A recovery is expected in 2010, and growth is forecast to average about 4.5 per cent in 2011-13.
2. The wealth generated in the past few years has meant that there has been high demand for West European and global products, particularly high value and luxury goods.
3. Russia is the fastest growing car market in the world, with most of the global manufacturers now having plants in the country.
4. There is a large project forwarding sector related to oil, gas, chemicals and minerals industries and long term prospects for these sectors are good.
5. Domestic road freight and parcels networks are in their infancy, and improving road infrastructure will create demand for higher value products.
6. Russian manufacturers and retailers are increasingly likely to out-source their logistics requirements to 3PLs.
7. Demand is growing for single, integrated providers which can deal with international and domestic flows of goods.
8. There is high demand for good quality warehousing.
9. There is increasing demand for western logistics providers from foreign multi-national manufacturers basing production facilities in the country.
10. Trade processes and customs procedures are gradually being reformed, leading to a more efficient and transparent import/export regime.