International Freight - A Lynchpin of the Economy in Denmark

It is a little known fact that the name Copenhagen is based on the Danish words for 'merchants harbour' and it is fitting that the whole concept of trade should be at the root of the name of the Danish capital. International trade has been a defining force of Denmark's economy for centuries.

For many people in the UK, Denmark's most famous export is bacon and it is sizzling Danish bacon that graces many a British breakfast plate every morning.

Denmark has long been focused on international trade and in fact this small country has very few natural resources and is very heavily dependent on imports, especially of raw materials. However, exports are also at a very significant level and Denmark has built up a steady market in the United States and Europe for its exports, in particular, for food products such as its world famous bacon as well as precision instruments and machinery. This is the main reason why Denmark advocates a liberal trade policy. So all this international trading activity has spawned a substantial freight forwarding industry, with a large number of shipping companies.

Indeed, in order to support the high level of international trade, Denmark has established a transport infrastructure and freight services that are the envy of the world. A typical Shipping company in Denmark is highly experienced and the service you can expect from freight forwarders in Denmark is totally streamlined and efficient.

The United States makes up about 5% of Denmark's total international exports and is the largest market outside Europe. In particular, this includes chemical products, furniture, pharmaceuticals and canned ham and pork. Denmark is, in fact, a net exporter of food.

Meanwhile, computers, machinery, instruments and aircraft are the main imports to Denmark from the United States. The diversity of the products represented within the list of imports means that the freight forwarding industry has had to evolve and adapt in order to service the varied requirements of the many different types of product. This has been a spur to improvement in the freight services sector overall and increased the capacity and capability of the average freight company.

The trade balance in Denmark has shown a surplus consistently for the last twenty years, putting Denmark in a very strong economic position with a stable currency. Denmark has chosen not to adopt the Euro. The government in Denmark has focused on boosting industrial competitiveness through labour market and tax reforms, as well as high budgets for research and development in order to keep Danish industry at the cutting edge.This is partly financed by a fiscal policy in Denmark which means the taxes in the country are the highest in the world. The income tax rates range from 43% to 63% and VAT is levied at 25% on the sale of most goods and services.

Combined with a buoyant economy, growing at an average of 3% per annum, this puts the government in Denmark in a strong position to be able to invest in its transport infrastructure as well as other public services. Of course, this has a positive impact for freight forwarders.

The transport infrastructure supporting international freight to and from Denmark is truly world class as a result of the high level of government investment. The airport at Copenhagen is a model of efficiency and the Oresund Bridge, spanning the 8 kilometres that separates Denmark from Sweden is a major feat of modern engineering. However, these landmark developments are seen as only the beginning of Denmark's ambitions to create a transport infrastructure that truly supports its economic growth and international freight market in future. With this in mind, the government is now focussing on the issues related to avoiding congestion problems on the road network. Of course, congestion causes problems for freight forwarders, reducing efficiencies in freight transport and increasing costs as well as creating logistical difficulties. So that it does not impede economic progress and productivity in future, the Danish government is now working on ways to overcome the transport challenges associated with congestion arising from population growth and an improving economy.

It is now planned therefore to create a number of ring roads around Copenhagen and build secondary links around the region as well as look at improving the gateway connections with other countries. This will only help to increase foreign trade and the international freight market overall. This will mean that international freight will stay at the heart of Denmark's economy, a real lynchpin in its economic strategy. Freight forwarders operating in the Danish market stand to benefit from this show of confidence and investment in Denmark's future.

Stephen Willis is Managing Director of RW Freight Services a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from Denmark

Comment on "International Freight - A Lynchpin of the Economy in Denmark"