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SUMMARY OF THE LOGISTICS SECTOR

- Sectors: Logistics

The government considers logistics to be of outstanding significance due to the role Hungary’s geographical position plays in increasing competitiveness, stimulating investment and sustainable development. This endeavour is supported by the efforts of professional organizations and the programmes of foreign governments.

Approximately three-quarters of enterprises are carriers, of which nearly a half are sole proprietorships. More than 10% of logistics service-providers are primary-activity carrier enterprises, and 6% primary-activity postal-courier enterprises. Today barely a dozen majority Hungarian state-owned companies remain in the sector. The largest Hungarian-owned enterprises/groups (Hungarian Post Office, Waberer’s, MASPED group) currently lag behind their European competitors in terms of revenue and size. Foreign logistics service-providers are also present on the domestic market, for instance Austrian (Hödlmayr, Lagermax, Gebrüder Weiss), German (DPWN, DB-Schenker, Logwin, Dachser), Dutch (TNT, Vos), French (Geodis, Giraud), Italian (Catone, Prioglio), American (Expeditors, UPS), British (Wincanton, Eurogate) and Swiss (Kühne-Nagel) enterprises/groups.

Rail, pipeline laying and air carrier activities are characterized by a relatively high degree of concentration.

As a result of its location, Hungary enjoys natural advantages in the area of logistics. Four Pan-European and 2 ERTMS corridors transit the relatively small area of Hungary, permitting links between Western Europe and the Balkans as well as Southwest Europe and the CIS. In addition, in some areas there is already demand for Central-Eastern European north-south relations as well, primarily because of the producer companies established in the region. 

Diagram: Pan-European corridors and their segments in Hungary

Source: MÁV Tervezőintézet Kft., EU Transport and Energy Directorate

Hungary’s radial transport network has Budapest at its hub; cross linkages in both the road and rail networks are either absent or of poor quality. The density of the core network is sufficient, although in terms of its technical construction and general state of repair it is possible to state that – in the majority of cases – it is not suitable for the traffic demands placed on it and it lags behind the EU-15 average. The value of the transport infrastructure is approximately one-fifth of the national assets of the country.

Compared to other countries in the region, Hungary has significant domestic shipping lanes. Ships can travel on the inland section of the Danube only with loading restrictions for a half to two-thirds of the year depending on the water flow. The density of ports in Hungary built to an appropriate standard and capable of operating continuously is about one-third of the EU average, although as regards their standard of services they are overall below the EU average. The frequently low water level on the river Tisza, the formation of shallows and the occasional incapacitation of shipping locks all represent barriers to the utilization of the river for cargo transport.
As airports in Western Europe become increasingly clogged and the proportion of high value goods increases, there is ever greater demand for the formation of a Central-Eastern European cargo airport. Preparations for such an airport are underway at several potential sites  (for example, Taszár). Players on the air transport market in Hungary use Budapest Ferenc Liszt International Airport to the greatest extent. In addition, there are two other airports of regional significance in Hungary that also conduct international air transport (Sármellék and Debrecen).

Our goal is to increase the competitiveness of those domestic enterprises (particularly SMEs) using logistics services. Furthermore, we aim to expand the investments and revenues of existing logistics service-providers as well as those who are considering establishing themselves in Hungary, and achieve a position where the level of contribution of the sector to the GDP reaches the average of Western Europe.

There are great opportunities for Hungary in the development of countries within the region, the growth and change in direction of east-west (Asia-EU) trade/cargo shipments, thereby increasing the demand for logistics services (for example, development of ports on the Adriatic and Black Sea, the rail potential of Záhony, Schengen borders).

Sector consultant: Lilla Pausits, lilla.pausits@hita.hu