UTK summarizes 2020 in transport, an exceptional year. Everything started "normally", i.e. the winter months, planned with a significant share of coal in the transported mass, and the climate shows what it can do. January declines on the market are significant, almost 13% compared to the same period of 2019. Later, not only the climate shows, but also, and above all, COVID-19 and there is, and in fact was "Like with Hitchcock - first an earthquake, and then the tension will increase". Unfortunately, it is not a cinema, it is a reality full of twists, surprises, difficult and good moments. Looking at the overall picture of the year, it ended happily.
The coronavirus pandemic and the global economic crisis meant that, according to UTK data, less than in 2019 was transported by 13.2 million tons of cargo. The exploitation work for the entire market is only 3 months with a better result than in 2019, the remaining months are declines, especially visible in the three months of the hard lockdown and immediately after, i.e. March, April and May. The end of the year - rebound and improvement of parameters compared to 2019. The transport performance for the market is analogous to the operational performance - September, November and December 2020 in the plus vs 2019, other months under a smaller or larger line.
Przemysław Palonka, Member of the Management Board / Development Director of the CTL Group:
2020 year was an attempt and at the same time a test or work on improving the management of the sales process, a change in the approach to planning rail transport and strengthening cooperation between our companies from Germany, the Czech Republic and Gdynia in in the time of crisis, it will bring the expected effect and the company will pass through this year with a relatively dry foot. For me, the most important experience this year is a very good teamwork of the sales team and the operations team. These were two strictly business areas that functioned almost without remote work, reacting on an ongoing basis to the situation, changes in the functioning of border crossings, temporary production downtime at customers, or staff shortages in ports and other places of loading or unloading goods.
According to UTK data, the share of CTL Logistics by weight of goods in 2020 amounted to 3.55%, which is equivalent to the 6th place in this statistical category. In 2019, the share of CTL Logistics is also 3.55%, which means statistical stability in the unstable 2020. Taking into account the transport performance, the CTL market share was 4.31% vs 3.95% in 2019, which means improvement and the 5th place in 2020.
In 2020, CTL Logistics transported 7,886 million tonnes and the transport performance amounted to 2,226 [million tonnes-km]. The weight of goods transported was not evenly distributed in the individual months, which is in line with the general situation on the market. There is a clear upward trend in transport for a period of 3 months at the beginning of the year, a slight reduction in weight in April and May and a dynamic rebound from March 2020. CTL Logistics noted record-breaking cargo transport in June and July 2020. In the following months, CTL Logistics carried out transports at a stable level (the maximum month-to-month variation in weight was 8.3%). CTL Logistics performed the largest transport work in March, September and December 2020 and the lowest in January and April 2020. CTL Logistics performed the longest average distances in May and September 2020.
Przemysław Palonka, Member of the Management Board / Development Director of the CTL Group:
looking at the share of carriers by weight of goods, CTL Logistics ranked 6th with the same share as in 2019. Two carriers of five who stay one step ahead, improved their share compared to 2019, and the others have lost. Those who have benefited are in a comfortable situation - they have their own cargo administrator. We do not have such comfort, but you do not need your own factory to carry out transport. There remains the question of profitability and what practices are used by individual market players when there are less goods to transport by rail. Our observation and everyday practice indicate one thing - the better with large carriers, the better in the entire industry, therefore we keep our fingers crossed for the entire freight transport market in 2021. And CTL has had a stronghold position in this market for almost 30 years and we do everything to keep it that way.
During the spring lockdown of 2020, the demand for coal and coke on the market decreased, and thus the weight of coal and coke transported by rail decreased. CTL Logistics suffered from these inconveniences to a much lesser extent than the market due to both the very wide portfolio of customers and the diversification of coal and coke supply locations. As a result of the reduction in production in Polish mines and the very limited access to high-quality coal assortments, the burden of transport shifted to high-margin, long-distance - import relations from eastern directions and seaports. The period of gradual recovery from the restrictions resulting from the pandemic at CTL Logistics has resulted in increasing volumes of coal transport, both for companies producing electricity and heat, as well as for importers. CTL Logistics expects stabilization of coal and coke transport in the coming months, which is in line with its resource capacity.
2020 was extremely difficult for the steel sector for all entities operating on the market, both in Poland and the entire European Union. Limiting production in Polish steel mills and the automotive industry required CTL Logistics to optimally adapt to the dynamically changing market conditions. The 30% lower production of passenger cars in Poland in 2020 resulted in a reduction in the production of post-production scrap, which resulted in a lower number of orders for its transport. In addition, lower production in steel mills resulted in a much smaller amount of iron ore for transport by rail. As a result of market changes, CTL Logistics reorganized the original transport assumptions and, thanks to the possession of a specialized fleet, focused on specialized transport, including cross-border transport, both in the country and to Europe south and west. Despite strong competition from road transport (fuel prices in the lockdown period in Poland were exceptionally low), we successfully competed with road transport, offering such a comprehensive first and last mile service for customers. In December 2020, in line with the market trend, CTL Logistics reached its peak transport of steel products, mainly in cross-border relations. CTL Logistics expects to achieve the level of transport of steel products before the pandemic in Q2 2021, among others due to the highly probable rebound in the automotive market and the start of a number of infrastructure programs, which slowed down due to the pandemic.
The SARS-CoV-2 virus pandemic has significantly disrupted intermodal transport on the Polish freight transport market. There were considerable problems related to the significant limitation of container deliveries from China to Poland by sea. The change of market conditions required from CTL Logistics to reconfigure transport realizations taking into account the limited supply of containers in sea ports. The lockdown period and the following months were a very effective time for CTL Logistics to systematically expand the base of owned platform wagons for the intensification of cross-border shipments, mainly to Germany, with the involvement of CTL Logistics GmbH. Intermodal Transport The CTL Logistics, just like the market, showed a clear upward trend despite the pandemic and constitute the foundation for the further development of the Company. The gradual recovery from the pandemic and the clear control of the situation in China has an impact on even greater dynamics of transport, including cross-border transport to the West of Europe and in domestic relations, using the company's resource potential. The situation of CTL in the intermodal segment is very well illustrated by the UTK data for Q3 2020. Both in terms of weight and transport performance, we recorded a quarter by quarter increase in the share in intermodal transport and two times better results for both parameters in 2020. compared to 2019. Thanks to our companies in Berlin, Ostrava and Gdynia, many years of experience and competences, it is possible to systematically build this market.
Fuel sector and chemicals
The freezing of the economy in Poland during the pandemic determined a strong decline in fuel demand, both on the wholesale and retail markets. The falling demand caused an increase in the fuel stocks of domestic producers. CTL Logistics turned out to be much less sensitive than the market to a decrease in demand for fuels on the market and a marked increase in supply, as it intensified fuel transport for key Polish producers of this assortment in import relations
from ports and the eastern border and from Germany to fuel bases located in Poland. The year 2020 turned out to be a year of greater demand for fertilizers, which resulted in increased shipments of this product compared to 2019. The strictly fuel segment also resulted in the expansion of cooperation with the leading fuel group in Poland. The gradual defrosting of the economy influenced the increase in demand for fuel on the market and allowed CTL Logistics to systematically increase the transported volume within the existing portfolio of customers and significant newly acquired key customers. At CTL Logistics, the last two quarters of 2020 are much higher transport volumes of fuels than in the corresponding period of 2019.
Przemysław Palonka, Member of the Management Board, Development Director of the CTL Group:
Summing up 2020, one thing should be said - we did not miss the declines, but due to the scale of the company, the possibility of smooth adaptation to the changing situation, and a large portfolio of clients, we maintained an unwavering position on the market. What distinguishes us and constitutes our advantage is flexibility and speed in making decisions. If something happens to the composition, you need a quick root cause analysis and an immediate decision on what to do with it - we make it. People who follow freight operations have more opportunities to make independent decisions, the decision path is short because we realize that a quick and, of course, the right decision improves the implementation of this transport at the next stages.
I am sure that the current sales department is adapted not only to the needs of external customers, but also integrates much better with other departments of the company involved in the management and implementation of transport. We are every day driven by teamwork, customer satisfaction and the most effective use of resources.
Plans for 2021
Probably the most important from the point of view of the Company, customer service, quality and efficiency of work will be the completion of the RailSoft system implementation. The individual modules were implemented in 2020, which was a huge challenge in a pandemic year, largely based on remote work, social distancing, and minimizing face-to-face meetings.
The system has about 70 modules, and the last straight by CTL Logistics, hence great mobilization on all fronts. The system will cover trade, starting from submitting an inquiry by the client, offer and contract, through transport planning, traction teams, dispatchers, loco drivers, railway auditors, technical, finance and controlling departments. The system also includes workshops, i.e. the process of periodic and current rolling stock repairs.
The implementation of this IT tool will allow the CTL Logistics Group to enter the 21st century. Until now, most of the operations were carried out through the use of a partially implemented Logistics system, supported by hundreds of Excel sheets. After Railsoft is implemented, all operations will be logged online. Loco drivers will log in on mobile devices and based on the records, their working time will be billed on an ongoing basis. Brake tests will also be performed on mobile devices, which will allow for automatic sending of the R7 to the system and ongoing monitoring of the course of the wagons. The monitoring of trains and the operations performed on them will also be monitored on an ongoing basis by the dispatcher and ultimately the customers.
Because the customer is the most important in this business!