While a year ago it was mainly trading companies that were struggling under the weight of unreliable contractors, this time the situation is worst in transport. More than half of entrepreneurs already have clients who are over 60 days late in paying their invoices.
Road freight transport has seen a decline in demand for its services by several percent last year. It is overwhelmed by unequal competition from Ukrainian companies, which N.B. Corporations from Western Europe are also establishing themselves beyond the eastern border.
– This has clearly prompted Polish transport companies to undertake increasingly risky orders, regardless of the certainty of receiving payment. Unfortunately, efforts to maintain results encourage some entrepreneurs to build a competitive advantage through long terms of deferred payments and turning a blind eye to delays, which has its unpleasant consequences – says Sławomir Grzelczak, president of BIG InfoMonitor.
There are many challenges
According to a report entitled “Transport Market in Poland and the World” prepared by the Polish Development Fund (PFR), in September 2023, Polish transporters transported only one percent more goods than a year earlier. It may seem like a small change, but in the period January-September last year, 3.1 percent less goods were transported than in the same period a year ago. One could conclude from this that this market is shrinking rather than expanding, were it not for the fact that employment in transport and warehousing at the end of the second quarter of 2023 amounted to 699 thousand people and was 2.1 percent higher compared to the same period of the previous year.
An undoubted pain (from the point of view of business owners) is the inflation-driven increase in wages – in September 2023, the salary in transport and warehousing amounted to PLN 7,260, which is a 13.7% increase compared to the previous year.
Polish transport companies face many challenges. The most current one is the aforementioned unequal competition with Ukrainian carriers, who – I guess it is not necessary to explain why – have lower operating costs. This creates problems both in transport to and from Ukraine and in transport services within the European Union. Unfortunately, this is accompanied by a decrease in demand for transport services, and consequently a decrease in transport rates.
Entrepreneurs were also surprised by changes originating from EU regulations – they have to adapt to the guidelines of the Mobility Package, exchange tachographs or introduce e-CMR. DSV – Global Transport and Logistics specialists point out that all this is taking place in the environment of an average 15% increase in road toll rates, which in turn results from the inflation regulation in force from 1 January 2024.
Everyone is getting more problems
For several years now, the bar has been set higher than usual for those running a business. It is now a well-known fact that last year we witnessed a record number of over 4.2 thousand company restructurings. There were as many as in the previous two years combined. According to Dun&Bradstreet data, 250 thousand companies (which is a shameful record) were suspended (61% more than a year ago and more than twice as many as before the pandemic).
The “SME Scanner” study conducted in the first quarter of this year showed that anyone who trades with deferred payment terms has unreliable payers. And the type of activity or size of the company does not matter. Over half (53%) of the SME sector had recipients who settled their receivables more than 30 days late in the last three months, while 40% of the 500 surveyed micro, small and medium-sized companies had payments delayed by more than 60 days. All this together paints a very poor picture of the condition of Polish entrepreneurship in the SME sector.