Market Overview
Market Overview section is based on MegaReserach Report and all data, estimations, projections and opinions in this section were provided by MegaResearch (unless otherwise noted).
Overview of Russian Road Transportation Industry
Trucking is the most popular method of transporting goods accounting for 66.5% of the total freight volume in Russia. Customers use trucking services because trucking is cheaper than air and rail transportation, and because of its flexibility, which enables freight delivery to any location.

At the beginning of 2015, the freight trucking market saw a significant decline in freight volumes, but during the summer of 2015, the situation began to stabilise as prices for trucking services began to increase: by the end of the first half of 2017, prices grew by 15-20% as compared to the prices as at the end of 2014.

Starting from the second half of 2016, the long-haul trucking market has been more stable. In general, large long-haul trucking companies remained competitive during 2015-2016.

The segments of the road transportation market include:

  • Full Truck Load (FTL) services, where one consignment is carried on a whole truck;
  • Less than Truck Load (LTL) services, where consignments from several sources are combined into one vehicle load;
  • Groupage, where goods from several shippers are consolidated in a depot where they are sorted by destination and then shipped collectively with other goods with the same destination.
Significant share of all freight in Russia is trucked within the European part of the country. At the same time, there are long haul trucking routes within the Siberian Federal District, as well as within Far Eastern Federal District. As for the international districts, after sharp decline in Russia-EU shipments in 2014-2015, in 2016 the situation stabilised. Also, China has become a favourable destination for the Russian long-haul trucking market due to increasing freight turnover between Russia and China.

Competitive Environment in Russia
The trucking industry in Russia is very competitive with the ten largest FTL trucking companies controlling approximately 16% of the market. There are several key groups of market players operating in the Russian trucking market: large companies (operating over 300 trucks), medium companies (50-300 trucks), family-run companies and self-employed individuals (1-50 trucks), asset-light logistic companies, in-house logistic companies (servicing large retail chains) and firms specialising in transportation of certain types of products (e.g. cars).

Large-sized companies (such as Globaltruck) directly compete with medium-sized companies, asset-light logistic companies and in-house logistic companies.

The share of the medium and large companies in the total number of trucking companies in Russia is 2.3%, while the share of the medium and large companies in the total number of trucks is 49% and is estimated at 66,000 trucks.
Market Trends
One of the key trends in the long-haul market has been business consolidation. Increasing tax compliance, transparency requirements, as well as the introduction of automatic weight control, are additional factors affecting smaller trucking companies that are less equipped to efficiently manage compliance with evolving regulatory requirements.

The share of large companies with large truck fleets has been steadily growing, while small companies and self-employed individuals with trucks older than 5-7 years exit the market. This factor will lower the number of actively used long-haul trucks. The continuing consolidation process will result in an increase in the top 10 companies' market share to above 20% by 2020.

Sectorally the most developed, advanced and promising market segments are FTL-transportation for retailers, FMCG companies and e-commerce. Freight transport services are strongest in the FMCG segment (41.3% of all truck traffic), which demonstrates rapid growth, including in the regions of the Urals and Siberia. The value of the e-commerce market in Russia, according to AKIT, in 2016 grew by 21% compared to 2015 and amounted to 920 billion rubles.
Regulatory Environment
There were significant changes in the regulatory environment in recent years which benefits large and professional trucking companies:

  • Since 15 November 2015, owners of heavy trucks have been paying a charge for using federal roads (the Platon charge). The idea behind the charge is to cover the damage caused to Russian roads by heavy trucks. The charge was initially set at RUB 3.73 per 1 km. However, after large-scale strikes in late 2015, the Government of the Russian Federation introduced a reduction factor of 0.41 and set the tariff at RUB 1.53 per 1 km.
  • The Rules for Carriage of Goods set out the maximum vehicle weight and axle load. Weight control is carried out by the traffic police and Rostransnadzor via an automatic in-motion weight and dimensions control system and at stationary weight control checkpoints. It is envisaged that all major roads will be equipped with weight control checkpoints by 2022.
  • In 2015 VAT administration became more stringent, which left fewer options for smaller trucking companies to exploit loopholes in the tax legislation.