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Evidence of the fragile state of Eastern Europe’s road freight transportation sector has been provided by analysis of trailer demand carried out by UK-based consulting firm, CLEAR.

The firm says that in the five years to 2007, compound growth in the East European trailer markets was 27% p.a. However, in 2008 the market shrank by 11%, which was a much bigger fall than in Western Europe.  CLEAR says the Baltic countries were the worst affected, whilst Turkey, Ukraine and Belarus posted modest growth.

The situation has worsened in 2009 according to CLEAR’s Gary Beecroft.

“Given the massive growth in demand for transport equipment in Eastern Europe and the lack of exposure of these countries’ banks to toxic assets, there was some hope in early 2009 that trailer demand would fall by a relatively minor 20% compared to Western Europe’s more dramatic 40%,” he says.
“However, the eastern banks were hit by the lack of interbank lending in the same way as those in the West and many of the eastern banks and the larger eastern companies had borrowed in the West European capital markets.  This source of funding dried up overnight and many institutions now had large foreign currency debts. This meant that finance for investment in transport equipment dried up.”

CLEAR estimates that out of fifteen East European countries, five are forecast to have drops in trailer demand of between 80% and 90% this year.  The average for the region will be a drop of 63%.  The Baltic States are amongst the worst hit – in addition to the problems of finance, they, like Ireland and Spain, have seen the crash of a speculative property boom.
Another factor affecting these markets is that they have grown so fast that their trailer fleets are already approaching the size that will fully meet their transport requirements.

CLEAR forecasts that in 2009 every market in Eastern Europe will experience a big fall in trailer demand and trailer production.

The collapse in demand for new trailers in the east resulted in one of the top three western manufacturers being forced into liquidation, as demand for imported new trailers vanished.  Demand for used imports and locally made trailers has held up slightly better thanks to their lower cost.