Europe Long Haul Transport Market Size

Europe Long Haul Transport Market Analysis

During the time frame of the forecast, the Europe long-haul transport market is expected to register a CAGR of more than 3%.

• Due to COVID-19, road freight rates in June 2020 were down 14.3% year over year. The rates were up by 3% compared to May 2020. Although rates were stable through Q1 2020, price levels declined sharply from April on as COVID-19 lockdowns dragged down demand and available capacity increased significantly. As a result of COVID-19, most demands eroded, but there were sector-by-sector variations. Production in the automotive sector largely came to a standstill, whereas there were violent jumps in demand for grocery-related transport, chemical and pharmaceutical products saw sustained higher demand levels, and the fashion retail and industrial sectors suffered. The COVID-19 pandemic increased the importance of digitalization in the industry.
• Strong increases in all types of operations drove a 6.5 percent increase in European road freight transport from 2020 to 2021.In the second quarter of 2020, lockdowns and restrictions on cross-border movements were put in place. In the second quarter of 2021, the number of tonne-kilometers done in the EU rose by 19.3%, to 496.5 billion tonne-kilometers.In terms of tons, Germany had the highest volume of road freight traffic on its territory in 2021.Fuel prices play an important role in long-haul trucking. As the trucks have to cover longer distances, fuel costs can significantly impact freight costs. Similar to the first quarter of 2022, the spike in diesel prices was the main driver of the increase in transportation costs.
• Although this factor contributed to the increase in 2021, demand growth was primarily responsible.Although there are different developments in different countries, the EU-27 pre-tax diesel price jumped 69% from its January level. At EUR 1.9 (USD 1.99) per liter, the average price of diesel at the pump in Q2 2022 in the main European countries showed an increase of 13% compared to Q1 2022. Many countries have taken steps to minimize the impact of this surge in fuel prices, including through reductions in taxes. Despite this, the increase remains significant. Fuel now accounts for about 50% of the operating costs of a long-distance truck, compared to a third before.
• According to information from an industry group, the European road freight market will slow down in 2023, growing by only 1.1% in real terms to reach USD 408 billion. Inflation that is going up, the energy crisis, the risk of a recession, and problems with manufacturing will all hurt the market a lot in 2023. Long-haul transportation, which is a part of the road freight market, will be affected in the same way. Since the COVID-19 pandemic, the automotive industry, which used to be a big part of road traffic in Europe, was having trouble. For the year 2022, European production was expected to have fallen by 0.5%. The shortage of semiconductors had a negative impact on supply in Europe. But at the end of 2022, demand was also beginning to crumble. In Germany, the largest market in Europe, sales are expected to fall by 5% this year. One small positive factor is e-commerce. As cross-border e-commerce (purchasing in a country other than that of delivery) accounts for 40% of purchases, it is a strong provider of flows for international transport. But this driving force is also starting to weaken.