Logistics: Russia faces large pent-up demand

”If logistics is the engine of globalization then Russia’s engine is momentarily running on one cylinder only”, the Swiss consulting firm BrainNet precisely outlines Russia’s situation. According to Rosawtodor, the authority responsible for the road network, Russia would have to invest about € 40 billion per year in the extension of its road network to keep up with the west. Additionally there is a striking lack of well-versed logistics experts. Caused by lacking modernization and few new constructions degree programmes for engineers and logistics experts were far from attractive in the past. Orders lost because of poor infrastructure and lacking logistics skills cause the country an annual economic loss of several billions.

The Russian government is familiar with this problem and according to the Federal Target Programme for the Development of Transport Systems € 373 billion shall be invested between 2010 and 2015. Almost half of it shall go into the poor rail freight sector.

Apart from mobile traffic and lacking logistics experts things are not really looking good for logistics centres either. As far as storage facilities are concerned the next years will also be a dry spell despite a long list of building projects. Booking a top quality storage facility in Moscow requires several months of waiting. Regardless of the numerous new constructions this situation will not improve significantly very soon.