Czech Republic: Truckloads of beer and car carriers are filling the nation’s highways

Truckloads of beer and car carriers are filling the nation’s already packed highways, which saw a roughly 20 % increase in use after EU accession, Czech Business Weekly communicated. Growth in the logistics sector, however, is tempered by increasing operating expenses.

Miroslav Rumler, president of the Czech Logistics Association (ČLA), said biggest demand for logistics continues to be from the automotive sector. Miloslav Mrkvička, chairman of the board at logistics provider ČSAD Jihotrans, said the automotive sector “provides a living to the entire country.” He also noted an increase in demand from breweries.

Brewery executives are now cooperating with logistics providers even closer than before, Rumler said.

Just last week the nation’s leading brewing group, Plzeňský Prazdroj, signed a contract with Jičín-based C.S. Cargo to transport 6 million hectoliters of Prazdroj’s goods domestically and throughout Europe for the next six years. The contract was reported to be worth Kč 300 million (€ 10.25 million) annually.

The pharmaceutical industry, domestically led by Zentiva, is also taking a larger part of the overall logistics capacity, according to Rumler.

New players in a tight field

At the end of September, Gefco Česká republika, owned by French automotive manufacturing group PSA Peugeot Citroen, announced the expansion of its Central and Eastern European division with the launch of an international automotive hub in Kolín. The hub will serve the Toyota Peugeot Citroen Automobile (TPCA) automotive assembly plant in the same town.

And there’s another new player. Last week Austrian logistics company Cargo Partner leased 1,250 square meters of warehouse space at the CTPark Brno — Modřice, where the company plans to serve its Brno industrial zone clients.

But new competition doesn’t necessarily come at the expense of local companies, some experts say. The country’s only steel wheel manufacturer, Hayes Lemmerz Autokola in Ostrava, for example, uses mostly mid-sized domestic carriers when it handles shipping.

“Growth in competition and quality is noticeable in the last few years,” said Jiří Adámek, managing director of Autokola. He added that due to increased competition there is room to negotiate prices with the logistics companies. “But the room for negotiations is getting smaller and smaller.”

Jaroslav Černý, a spokesman for Škoda Auto in Mladá Boleslav, said the both international and domestic logistics providers get business from the carmaker, and there are no significant changes due to new players in the market.

But Mrkvička of Jihotrans sees the new players as more than just competition. “The increasing number of logistics companies is putting a strain on the work force because there is a shortage of qualified drivers in the country,” he said.

Stuck with new tolls

Rumler points out that industrial zones get state support, which generally benefits manufacturers, whereas logistics zones don’t, despite their growing importance.

And the toll system that is to be set in place by the end of next year brings yet another expense to the logistics companies. Greater maintenance and road construction is welcomed, but the toll “only makes the problem worse,” Mrkvička said.

Mrkvička said haulers who operate in Germany aren’t able to pass all of those toll costs onto customers. “The competition here is harsh, and extra expenses don’t help,” he said.

An area for growth within logistics is combined transit, using both trucks and trains. Construction of these combined transit terminals is slowly taking off, Rumler said, and funding comes from EU sources, as well as state and private companies.

Škoda already uses a form of combined transit, as well as other forms of logistics, including rail. “But most of our transport takes place on the roads with trucks,” Černý said.

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