Procuring transport in a weakended market

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  • Logistics

A sharp fall in construction activity, high inflation and disruption to shipping in the Red Sea: these are some of the factors having a recent impact on the logistics sector. “We are in the process of concluding our procurement of transport services for the upcoming period and it is apparent that the market has been weakened,” says Andreas Hamm, Commercial Manager, Marine at SCA Logistics, who is responsible for the procurement of maritime transport.

After the high pressure on the transport sector during and immediately after the pandemic, the market cooled significantly during 2023. In part, this was due to the sudden production halt in the construction industry and other sectors that require extensive transport services. 
The increase in transport capacity is confirmed by Charlotta Åkre, Commercial Manager, Road and Rail at SCA Logistics, who is responsible for road haulage procurement.
“The trend of rising prices has come to an end and the market has turned. However, we feel that we may have reached the bottom now,” she says.
Meanwhile, hauliers are grappling with increased costs due to inflation. Prices have risen sharply for vehicles, tyres, spare parts and much else.
“The industry is also affected by a number of new regulations and tolls. This includes road tolls and other fees,” says Charlotta.

Maritime cargo volumes declining

Maritime cargo volumes also declined during the second half of 2023 and, according to Andreas, it is difficult to predict how things will develop in the immediate future.
One recent major topic of discussion in the industry is the disruption to shipping in the Red Sea. Several container vessels have been attacked by Yemeni Houthis and merchant shipping is being forced to divert around the southern tip of Africa.
“The situation in the Red Sea is affecting us to a certain extent as we have some container cargoes that use that route. Our breakbulk vessels are not affected, as they do not pass through,”says Andreas.
Although access to transport has increased compared to last year, when the market was under significant pressure, Andreas still advises customers to place their orders in good time.
“It is still advisable to send inquiries and bookings in good time to ensure capacity with reliable partners.”

Text: Kerstin Olofsson
Photo: Roger Degerman