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Market Guide Agency predicts an increase of 1.2–2.0% in demand on logistics services on the territory of Chuvash Republic from 2016 to 2025

   The total volume of the freight turnover of the Chuvash Republic is 17.0–18.0 million tons per year, with the largest share being intra- and inter-regional flow, which is in the range of 80–90%; the share of the export turnover is about 1.5–2.0%, the share of import turnover does not exceed 3.0–5.0%. In the total volume of the cargo transportation the leadership belongs to the railway and road transport. Their share in 2012–2013 amounted to 30 and 60% of the total freight turnover of the Chuvash Republic respectively.

   In comparison with other regions of the Volga Federal District the cargo transportation volumes in the Chuvash Republic are negligible: so, according to Rosstat, Chuvash Republic takes the last place in rail cargo transportation volumes in Volga Federal District, and the second-to-last place in road cargo transportation volumes (Mari El Republic took the bottom).

   The region annually imports about 5.9–6.0 million tons of commercial products. The structure of the incoming traffic is mainly composed of categories such as building and mineral products (33%), food products (16%), machinery and equipment, metal products (13%), consumer goods (10%). The volume of the marketable products export from the region is significantly lower and is about 2.3–2.5 million tons per year, with the largest share in the structure of export products being represented by engineering and chemical industry – the total share is about 64% (Fig. 1). 

Figure 1
Structure of the incoming and outgoing cargo traffic on the territory of the
Chuvash Republic as of year-end 2014 (railway and road transport)

   Transport and logistics service market capacity can be defined as the volume of goods transported by all modes of transport in the region for a certain period of time (year). According to the official statistics data, in 2014 the capacity of the transport and logistics services market of the Chuvash Republic (excluding pipelines transportation) was 17.7 million tons. 

   In general, the development of logistics services in the Chuvash Republic can be characterized as insufficient. In 2013 the experts of the Russian logistics market conducted the integral evaluation of the efficiency of logistics at the regional level and formed the rating of regions in terms of favorable conditions for the development of logistics. According to this rating Chuvash Republic joined the group of regions characterized by almost complete lack of conditions for the development of logistics, as it occupied the 71st place among the 80 regions. 

   On the territory of the Chuvash Republic there are no high-quality modern warehouse complexes of A, B +, B classes, except for the logistics complexes built by industrial companies to meet domestic needs (warehouses of Akkond, Buket Chuvashii, Maslosyrbaza Chuvashskaya companies and others). Most part of the transport and logistics market of the Chuvash Republic is currently occupied by small transport companies that specialize exclusively in intraregional, interregional and international cargo transportation, as well as by a significant number of individual entrepreneurs, offering services to transport goods at low prices. Thus, transport and logistics market players of the Chuvash Republic are engaged only in the delivery of goods. They generally do not have their own storage space, renting from time to time small spaces for short-term storage of goods before passing the goods to the client.

   The structure of the potential demand for logistics services by functionality on the territory of the Chuvash Republic, as well as throughout whole Russia, is presented mainly by “Transportation and forwarding” segment, which deals predominantly with the transportation of cargo (Fig. 2).

Figure 2
Structure of the potential demand for logistics services in the Chuvash Republic, % 

   It should be noted that the majority of services in the transport and storage of goods, inventory management and supply chain management on the territory of the Chuvash Republic is performed by their own transport and logistics services of manufacturers, distributors or retailers. According to the experts’ estimations, their own divisions in enterprises and organizations carry out about 65–70% of the total volume of logistical operations. 

   In 2013–2014 capacity of the transport and logistics services market in the Chuvash Republic decreased (Fig. 3). 

Figure 3
Dynamics of capacity of the logistics services market in the Chuvash Republic in physical terms in the 2010–2014, million tons 

   In 2013, sharp decline in capacity of the transport and logistics services market in the Chuvash Republic (–14.6% compared to 2012), was primarily due to the decrease in the volume of cargo transportation by road and rail, which is the largest segment of transport and logistics services on the territory of the Chuvash Republic and the Russian Federation as a whole. 

   According to the data of the Ministry of Economic Development, Industry and Trade of the Chuvash Republic, in January-June 2015 there is a decrease in industrial production (–11.4% compared to the same period of 2014). According to the experts’ estimations, there will be continued the capacity reduction of the transport and logistics market of the Chuvash Republic in 2015 and it may reach up to –1.0 ... 3.0% if compared to the level of 2014. The decline in capacity of the transport and logistics services market is due to the overall reduction in traffic volumes in terms of import and export as a result of the current sanctions regime of the Russian economy. 

Figure 4

Forecast of the capacity of the transportation and logistics services market in the
Chuvash Republic in 2015-2025 

   According to the experts of LLC Market Guide Agency, in the long term (2016–2025) the demand for transport and logistics services on the territory of the Chuvash Republic will increase under the influence of the growth of industrial and agricultural production, development of retail trade and the building sector. As the transport and logistics market develops on the territory of the Chuvash Republic the demand for administrative logistics will be increased. 

   According to the basic forecast of the experts, in the long term until 2025 the growth in demand for transport and logistics services of the Chuvash Republic will be about 1.2–2.0% per year and will reach 17.6 million tons (it is above the level of 2014 by 2.3 million tons, i.e. by 15.0%)*.

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* When developing the forecast the following sources of information were used: The forecast of socio-economic development of the Russian Federation until 2025 (Ministry of Economic Development); Strategy for Socio-Economic Development of the Chuvash Republic for the period up to 2020; analysis of macroeconomic indicators characterizing socio-economic situation of the Chuvash Republic.