Lithuania's record road transport completed

Lithuania’s project cargo sector may face stagnation in 2024-2025

Photo: Petrofac

Lithuania’s project cargo sector may stagnate in 2024-2025 due to ongoing geopolitical uncertainty and complex economics.

The past year was a boon for the country’s cargo transport sector, including the project cargo segment. Traffic volume increased by a remarkable 17 per cent, and revenue rose correspondingly. Still, according to local operators and analysts, this year will be significantly more challenging for the industry as the current pressure on it will continue to grow.

According to earlier statements made by Povilas Drizhas, head of the International Transport and Logistics Alliance (TTLA) of Lithuania, one of the biggest problems for the industry this year will remain the shortage of drivers, as well as the ever-growing operating costs coupled with the current crisis around the Russian-Ukrainian war.

Western sanctions significantly hit the project cargo sector of Lithuania and other Baltic states, whose economies were historically tied with Russia. The suspension of significant investment projects with Russia (primarily those in the field of energy) and the closure of borders led to a substantial drop in the sector’s project cargo transportation.

According to SEB bank economist Tadas Povilauskas, due to the decline in orders, the level of competition has tightened in the sector, which has led to the decline in the profitability of major local transport operators. Therefore, most analysts expect consolidation of the segment and withdrawal of smaller players by large companies.

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Author: Eugene Gerden

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Lithuania’s project cargo sector may face stagnation in 2024-2025 | Project Cargo Journal
Lithuania's record road transport completed

Lithuania’s project cargo sector may face stagnation in 2024-2025

Photo: Petrofac

Lithuania’s project cargo sector may stagnate in 2024-2025 due to ongoing geopolitical uncertainty and complex economics.

The past year was a boon for the country’s cargo transport sector, including the project cargo segment. Traffic volume increased by a remarkable 17 per cent, and revenue rose correspondingly. Still, according to local operators and analysts, this year will be significantly more challenging for the industry as the current pressure on it will continue to grow.

According to earlier statements made by Povilas Drizhas, head of the International Transport and Logistics Alliance (TTLA) of Lithuania, one of the biggest problems for the industry this year will remain the shortage of drivers, as well as the ever-growing operating costs coupled with the current crisis around the Russian-Ukrainian war.

Western sanctions significantly hit the project cargo sector of Lithuania and other Baltic states, whose economies were historically tied with Russia. The suspension of significant investment projects with Russia (primarily those in the field of energy) and the closure of borders led to a substantial drop in the sector’s project cargo transportation.

According to SEB bank economist Tadas Povilauskas, due to the decline in orders, the level of competition has tightened in the sector, which has led to the decline in the profitability of major local transport operators. Therefore, most analysts expect consolidation of the segment and withdrawal of smaller players by large companies.

You just read one of our premium articles free of charge

Want full access? Take advantage of our exclusive offer

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Author: Eugene Gerden

Add your comment

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