Europe currently accounts for 36% of world trade and within Europe it is the emerging countries such as the Czech Republic that are seeing the most significant growth. In the last ten years, the share of world trade represented by the Czech Rep has gone up a staggering 111%. This growth has resulted in a boom in freight forwarding to and from Czech and growth in the number of freight companies serving the country.
The Czech Republic, largely because of its geographical position right in the centre of Europe, is highly trade dependent and international freight is growing. Some 80% of its GDP is accounted for by trade, and 90% of this is accounted for by its trade with the European Union. Since 1998 the Czech government has put a great deal of effort into stimulating inward investment into the country through tax incentives and a low corporation tax at just 19%. This has stimulated total inward investments (FDI) amounting to some Euro 84bn up to the end of the second quarter of 2009.This too has helped buoy the freight services industry and attract the interest of shipping companies based overseas.
Some would argue that the global financial crisis has in fact helped the Czech economy even though it did certainly affect demand for trade finance. Although trade with the European Union has fallen, exports to the CIS have remained stable while exports to Asia and to the European Free Trade area (particularly Norway) have grown. Freight companies have reported strong trade with these countries. Overall trade has doubled in the last two years and with the upturn in manufacturing output that the Czech Republic economy is now seeing, there is every chance that the Czech economy will indeed achieve its current forecasts for strong continued growth. This will be good news for the freight companies and shipping companies that have recently invested in the Czech Republic.
Most exports from the Czech Republic go to Germany, Slovakia and France. Germany accounts for freight forwarding worth 9923 million US Dollars in the last quarter of 2009, Slovakia accounted for 2615 million US Dolars and France 1778 US Dollars. This quick summary of the leading export markets shows that the Czech Republic is now looking firmly to the West.
With the separation of Czechoslovakia, the new Czech Republic has swiftly replaced its former Eastern European trading partners with Western ones (primarily Germany and the rest of the EU). This has been a relatively rapid shift in the pattern of trade and one that has been very significant for freight forwarders. This fundamental shift in the direction of freight forwarding of goods into and out of the Czech Republic has overloaded the current infrastructure of roads, airports, and railroads. At present in the Czech Republic, most freight transport goods are shipped by truck. Currently, underdeveloped railroads and waterways often can not accommodate intermodal transport.
In 1993, the government in the Czech Republic set itself several goals to develop the transportation infrastructure in the country, with a view to streamlining and improving freight forwarding. This included the development of better connections between Prague and Vienna, Berlin, Warsaw, Nuremberg, Munich, and Linz; the construction of 264 km (164 mi) of new highways over the next 8-10 years for improved freight transport links by truck; expansion of the Prague Ruzyne airport; and connection to Western Europe’s high-speed rail system, as well as the purchase of better rolling stock. A multi billion dollar project is underway to modernize the rail system. The delivery of these ambitious and progressive plans are eagerly awaited by every freight company and shipping company operating in the Czech Republic.