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Euro presence 'key to survival'

15th May 2008, Page 9
15th May 2008
Page 9
Page 9, 15th May 2008 — Euro presence 'key to survival'
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inuati LOGISTICS FIRMS with strength in fast-growing central and Eastern European countries will shield themselves from the effects of the downturn in the global economy, according to a new report.

Transport Intelligence says Kuehne + Nagel, Schenker and DSV have been among the most aggressive companies, building scale and networks across European regions and negating the impact of high fuel prices and an economic slowdown.

Its report claims Slovakia will experience the highest growth rate, reaching 26% . This compares with a Europewide annual rate of 6.6%, and is due to "a vibrant supply side, huge investment in production by Western manufacturers and increasing demand". The international road freight market is predicted to grow by 9.8% per annum over the next five years, "significantly" outstripping the UK market, which is characterised by rocketing fuel rates, difficulties in passing on costs and fears of a recession.

Transport Intelligence says this is leading to many small and medium-sized businesses being forced to absorb costs that their operations cannot support.

Analyst John Manners-Bell adds: "The European road freight market is becoming ever more challenging for all operators struggling to pass on cost increases to their customers. However, the major European players, especially those with strength in fast-growing central and Eastern Europe, are at a distinct advantage. Scale is definitely key to success — and even survival — in the present market conditions."

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