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Pandemic Push For Digitalisation And Automation

As was seen during the pandemic, online sales and the digitalisation of business operations were both a source of stress and an opportunity for those logistics companies that were open to innovations and digitalisation, as well as the automation of storage operations

Freight transport and logistics are seen as important drivers of economic development and key ingredients of improved competitiveness, economic growth and employment for any country. Furthermore, developments in logistics and transport go hand-in-hand with the implementation of new technologies, R&D and a highly qualified workforce.

According to the World Bank’s Logistics Performance Index (LPI), which is the weighted average of country scores in terms of the efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies, including customs; quality of trade and transport-related infrastructure (e.g., ports, railroads, roads, information technology), ease of arranging competitively priced shipments; the competence and quality of logistics services (e.g., transport operators, customs brokers), the ability to track and trace consignments and the timeliness of shipments in reaching their destination within scheduled or expected delivery times, Serbia had a rating of 2.84 out of 5 in 2018, which is the latest year for which data are available. This is slightly less favourable than 2015, when that figure stood at 2.96.

Apart from road transport, which is developing at a relatively high pace in Serbia, other forms of transport (rail, water and air) are still in their infancy when it comes to the transport of goods, which represents a serious obstacle to attracting global supply chains. As of 2018, rail transport in Serbia and the Western Balkans has been recognised as one of the priorities of the EU Connectivity Agenda.

Although some progress has been made, border procedures remain complicated and time consuming, while trade and nontrade barriers are significant and result in considerable delays and losses in transport and logistics.

the industry expects the state to take further steps to upgrade the business environment, bringing predictability to regulations and laws, and increasing investments in the development of intermodal transport

At present, due to the pace of infrastructure development, both domestic and foreign logistics companies and logistics centres are mostly concentrated in the area of Belgrade and other larger cities, whereas other parts of Serbia remain insufficiently developed in terms of logistics. These are serious constrains for an industry that is facing an increased push from value chains to shorten procedures and allow for smaller and more frequent deliveries, with very short and strict deadlines, and high penalties.

As was seen during the pandemic, online sales and the digitalisation of business operations were both a source of stress and an opportunity for those logistics companies that were open to innovations and digitalisation, as well as, for example, the automation of storage operations.

As expected, the pandemic has hit local companies harder than multinational ones.

Moreover, the pandemic hit those companies that specialise in certain procedures harder, while those with portfolios that feature a wider range of logistics services fared better.

In certain forms of transport, such as rail and river transport, there has been a noticeable drop in handling goods like agricultural products, mineral fertilisers, petroleum products etc. Yet, as confirmed by recent investments in 2020 and 2021, the industry is experiencing intensive growth and it is realistic to expect this growth to be even higher in the future.

According to real estate consultancy company CBS International, the logistics and industrial market was one of the most progressive and fastest-growing real estate market segments, which showed the greatest resilience even under the altered circumstances caused by the pandemic. The observed space for growth arises from the low level of operations, i.e., significantly lower logistics stock per capita than in the West, booming e-commerce and a short supply of available space on the Serbian market.

Now that the situation has somewhat normalised, the industry expects the state to take further steps to upgrade the business environment, bringing predictability to regulations and laws, and increasing investments in the development of intermodal transport.

Naturally, it is also important for the current programme to construct and renew traffic infrastructure to continue, and for the state to proceed with addressing the problems of huge delays at border crossings, both on the Serbian side and on the side of neighbouring countries.

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