LKAB push their transportation and logistics companies to cheap solutions to survive

By: Thomas Ström 3/2/15

LKAB, a mining group owned by the Swedish government, is, at the moment, a telling example of how the Swedish industry is pushing the transport and logistic business.
This forces transport companies to come up with new solutions to survive, and the solutions are always looked for in reduced costs.

I wonder if LKAB has ever looked at the financial statements of their transport and logistic suppliers. If they had done so they would know that there are no excess profits. Most of them have to work really hard to avoid red numbers.

I assume that the reason for LKAB's actions stem from that they, in their own accounts, have seen that the costs for the transport and logistics services are high in comparison to other costs. This leads in turn to the idea that it would be possible to cut a few percent in this area.
Especially, truckers and train operators are pushed to deliver services almost for free. They are most definitely not making a profit.

It is this which in turn forces the transport and haulage industry to look for vehicles and manpower outside of Sweden. The foreign drivers and haulage companies have significantly lower costs than their Swedish counterparts. They have cheaper insurance, car purchases, fuel costs and salaries, etc. Everything is cheaper. Additionally, very few look at the environmental aspect as a competitive advantage which is why very few make environmental investments.

Transport prices in Sweden, and in the world, are far too low. If the price of transport generally increased, it would not mean very much for the goods being transported. The effect would be that we get a much healthier transport industry. This would also lead to more companies being able to invest more in development and environmental issues etc.