Debt of the TSL industry in 2022

According to the data of the National Debt Register, the average debt of an entrepreneur from the TSL industry stands at around 40,000 PLN. At the end of September 2022, the register of debtors included 28,139 companies from the transport and logistics sector. And although this number has decreased by about 3% compared to last year’s data, the total amount of debt, reaching 1.13 billion PLN, is still alarming.

For entrepreneurs from the TSL industry, the period of the pandemic was a very difficult time. According to the report of the National Debt Register from 2021 “Load above the norm – i.e. the financial situation in the TSL industry”, the debt of transport companies increased from the beginning of the pandemic in 2020 to the end of 2021 by as much as 27%. During the crisis, not only the number of companies entered on the list of debtors increased (by 925 entities), but also the average amount of debt – from 43,200 PLN in March 2020 to 52,600 PLN at the end of 2021. The latest KRD data indicate that the industry is slowly recovering from the difficulties caused by the COVID-19 pandemic. The year 2022 brought some stabilization in the level of debt, but it remains at a high level, which unfortunately suggests that the industry is far from returning to shape. So what are the main causes of persistent debt?

Payment backlogs.

Specialists point to the TSL industry as one of the most vulnerable to the risk of payment backlogs. They are most often caused by extended payment deadlines and delays in settling liabilities, which, unfortunately, are not uncommon in this industry. These are factors that are particularly painful for micro, small and medium-sized enterprises, as they can disrupt the functioning of the entire company. When a company does not receive payment for an invoice on time, it begins to have difficulties in making its own payments, and the problem escalates. The TSL industry has its debtors, mainly transport, commercial and production companies, whose total debt reaches 158.5 million PLN. The good news is that this amount has been reduced from 171.6 million PLN in 2021.

Constant increase in costs.

As Maciej Wroński, president of the employers’ association Transport i Logistyka Polska, points out that 2022 was a year full of challenges for the road transport industry. The New Polish Deal, changes in the rules of remuneration for drivers at the national level, new regulations of the Mobility Package or the failed reform of the system of training professional drivers are just some of them. Added to this is the increase in fuel and energy prices – no wonder that the costs of running a business are increasing exponentially. Constantly changing regulations and high competition on the market of transport services require carriers to invest in new equipment. These are challenges that not all entrepreneurs in the industry are able to meet. Difficulties may push them towards the gray economy, which unfortunately has a negative impact on competitiveness on the market and affects those companies that operate fully legally, in accordance with the regulations.

Disruptions in the supply chain

The war in Ukraine brought Europe not only an energy crisis and a deepening of the problem of rising fuel prices, but also disruptions in supply chains. The BIG InfoMonitor “SME Scanner” study leaves no illusions. Due to the fact that many companies have withdrawn from the Russian market and the number of transports to Belarus and Ukraine has also decreased, as much as 42 percent of surveyed companies from the transport sector admitted in the study that they recorded lower income because of this. Many entrepreneurs were forced to modify the directions and methods of delivery. There is no prospect of an improvement in the situation in the near future, as there are no conditions to exchange permits for 2023 with Russia and Belarus. Current permits for Belarus are valid until January 31, 2023, from February probably the only available permits will be paid permits, the cost of which is over 200 EUR. Unrestricted access to the market will be reserved only for Belarusian and Russian companies, which is part of the ongoing hybrid war. The transit ban for EU cars issued by Russia and Belarus has also cut off Polish carriers from markets such as Kazakhstan and Uzbekistan. It is estimated that around 2,000 of Polish entities must therefore find a different business idea.

Big problems of small businesses

The Polish TSL industry is characterized by a large number of small family-owned companies which unfortunately feel the pressure of growing requirements and costs the most. According to KRD, almost 70 percent of all indebted companies in the transport sector are sole proprietorships. We are talking about nearly 20,000 small companies that are responsible for 2/3 of the debt of the entire industry. These are disturbing data that clearly prove that our country lacks efficient protective instruments for carriers affected by the energy crisis. The smallest companies often struggle with payment backlogs the most, as it is not uncommon for larger companies to take advantage of their stronger position by imposing long payment terms. In the current market conditions, however, entrepreneurs are increasingly aware of the importance of maintaining the company’s financial liquidity. This can be seen in the decreasing tolerance for invoices not paid on time, which are submitted to debt collection faster.

The future of the industry.

Experts are of the opinion that the near future of the TSL industry will be influenced primarily by three factors: the European and global economic situation, the labor market and the policy of the government. The relationship between demand and supply of transport services will depend on the economic condition. The strongly felt and constantly growing problem of the lack of professional drivers will continue to exert pressure on the increase in salaries for this professional group. On the other hand, a poorly conducted policy, deaf to the postulates of the industry, may unfortunately have a negative impact on its condition and the competitiveness of our carriers on the European market.