Freight Forwarding in Denmark Weathering the Storm of Political and Economic Change
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By: Stephen Willis
Submitted
2009-07-10 19:08:24 |
It s all change in Denmark following the decision by Anders Fogh Rasmussen to step down as Prime Minister so as to take up the position of Secretary General at NATO. The new Prime Minister, the Liberal Party s Lars Lokke Rasmussen takes up the role at the head of Denmark s coalition government after experience as Denmark s Finance Minister. This change at the top of the government comes hot on the heels of the economic maelstrom being experienced in Denmark as a result of the global economic crisis.
What could the double whammy and upheaval in Denmark signify for the international freight and freight forwarding market?
In the face of the weakening economy in Denmark, which is buffeted by the same winds that are creating economic crisis worldwide, the new prime Minister is having to deal with an increasingly vociferous opposition. The opposition party, the Social Democrats, are buoyed by public opinion polls that suggest that their leader enjoys more popular support on a number of issues, especially healthcare, welfare and the integration of immigrants.
But as a former Finance Minister, Rasmussen enjoys most support for his ability to handle the economic crisis.
It is his handling of the economy that will be of interest to freight forwarders and shipping companies,which will be directly affected by Rasmussen s decisions regarding spending on transport infrastructure projects.
The deteriorating budget deficit and debt position of the public finances in Denmark are likely to have an impact upon the investment in the transport infrastructure on which international freight depends.
Rasmussen s hopes of winning a fourth election for the Liberal Conservative coalition will depend on how successful his policies are at mitigating negative effects from the economic downturn.
The government will need to show the long term sustainability of the public finances through reforms to public services and the welfare system. Future investment in transport infrastructure is likely to be a casualty of government spending cutbacks and this could have a negative impact on the freight forwarding industry.
However, the Danish government is keenly aware of the importance of international trade and is likely to do all it can to balance the need for cutbacks with the need to maintain efficient freight forwarding for exports. Because the domestic market is limited, Danish manufacturers are highly export orientated. Denmark has a healthy trade balance as a result.
European markets account for 70 of all exports. Germany, Sweden, UK and United States together account for 50 of all Danish exports. Other significant export markets, in order of magnitude, are Norway, Netherlands, France, Italy, Finland and Spain. New markets have also been opening up in Central Europe, Eastern Europe, Australia and the Far East, necessitating the creation of new partnerships and ways of working within the Danish freight services industry.
With real GDP in Denmark forecast to shrink by 3.5 in 2009, and a severe contraction of the economy predicted, it remains to be seen whether future plans to improve the transport infrastructure will be put on ice or whether Denmark s dependence on exports will mean that the transport infrastructure remains a high priority despite the economic crisis and the need to cut government expenditure.
It is to be hoped that the government in Denmark take a long term view and continue to invest in their freight transport infrastructure and their international freight and freight services industry.
However, if Rasmussen decides to rein in spending to help balance the budget, at least Denmark is better placed than most other countries worldwide to weather the storm, as it already has such a strong transport infrastructure in place.
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Stephen Willis is Managing Director of RW Freight Services http://www.rwfreight.co.uk a UK based freight transport company, established in 1971 and operating specialist freight services to and from Denmark. http://www.rwfreight.co.uk/Denmark-Freight-Services.html
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