REGIONAL REPORTAUSTRIA & SWITZERLAND


Dealing with the downturn


Slow and brutal, with little room for negotiating … the heavy lift and project forwarding sector in Austria and Switzerland is tough but, as Felicity Landon reports, there are glimmers of optimism for the year ahead.


P


roject and heavy lift specialists in Austria and Switzerland are facing challenges from all sides. Throughout the past year the market has had few highs, prices have been crunched, competition has been intense.


According to FocusEconomics, both


Austria and Switzerland are struggling with sluggish economic growth. Austria’s gross domestic product (GDP) is forecast to


grow by 1.4 percent year-on-year in 2017, while the Swiss economy is expected to expand by 1.5 percent. At the same time, customers are seeking to heap more and more liability on to their logistics suppliers. Meanwhile, a reported lack of investment in infrastructure is increasing transport costs – with no chance of those at the sharp end recouping them. “Things have been slow, with little to almost nothing physically moving,” said


Roger Kündig, managing director of KOG Transport in Switzerland. “Because of the low oil prices, little has been going on and there has been a lot of competitive pressure. Things that were out there physically moving were all put on the spot market. It has been brutal. “At the same time, the liability that the


client tends to put on to the forwarder has increased so much that we as a forwarding agent have to weigh up whether we want to take on those liabilities. Also, taking on such liabilities triggers the need for taking out additional insurance. With price competition so bad, there is the question of whether the associated expenses will be covered or not.” Clients are inserting penalty clauses in


contracts such as consequential damages for delivery delays, he said. “There is little room for negotiating or changing this – they are just not prepared to talk about it. When things were busy, clients were more open for reasonable discussions on such issues. Now they are, for example, adding extended payment terms – payment dates way after the work has been performed. These are well-known things which just make the whole situation very ruthless.”


Liabilities Dominik Keller, head of international development at Fracht Basel, echoed Kündig’s comments. “We are encountering contracts where they literally put everything on your shoulders, all the liabilities,” he said. “You have to show the client insurance policies and liability insurance policies. If you sign the contract, you are fully


88


January/February 2017


www.heavyliftpfi.com


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