- Business and Employment
Eastern European Logistics
Many manufacturing companies are looking at Eastern Europe as the newest place to set up shop because of the high number of low wage skilled workers
Eastern Europe Logistics
Since the fall of the Soviet Union the countries that were once under its influence are now restructuring their economies to take advantage of new markets and new opportunities. Many manufacturing companies are looking at Eastern Europe as the newest place to set up shop because of the high number of low wage skilled workers and the proximity to their primary consumer, Western Europe. Before any major move can be made to take advantage of this opportunity logistic companies will need to be in place that fully understand the problems of working in this part of the world.
As of the date of the article CEE Change; Central and Eastern Europe Make Waves, the average GDP for Central and Eastern European countries was at $6,300 versus $25,200 for Western Europe. The economies of these former Soviet Bloc countries are growing much faster than the economies of Western Europe. This is due in part to manufacturing companies outsourcing to this region. However, before these companies can go much further logistic companies will need to move and start solving many of the problems that currently exist. The major problem of course is the lack of transportation infrastructure. Most roads, rail lines, and airports are outdated and lack maintenance.
While there may not be much that logistics company can do to solve these problems directly, it is possible to work around them. For example there is already a system in place that could be used for distribution hubs, the major capitals. Once warehouses and distribution centers are built in these cities, transferring goods from there to the consumer is made much easier. The European Union is also working on a solution for the lack interconnectivity between roadways, railways, and airlines. The TEN-T (Trans-European Network for Transportation) program is being designed to establish better interconnectivity and interoperability between national transportation networks. This will include Central and Eastern Europe.