Market Trends of germany road freight transport Industry
Germany leads European logistics and transportation with USD12.80 billion investment in highways in 2022
- The German transportation industry is key to maintaining well-functioning services and moving goods within and outside the nation. The country has some of the highest-ranked infrastructural networks in the world, with its roads being some of the more heavily traveled thoroughfares in Europe. Transportation and storage recorded a high growth rate of 6.80% YoY in March 2022 and a low rate of -1.60% YoY in March 2021 due to the recovery from the pandemic and the resumption of trade with foreign countries.
- The transportation and warehouse sector's significance extends to the facilitation of operations in various other industries. Germany asserts its dominance, surpassing even the second and third-largest logistics markets, namely France and the United Kingdom. Globally, Germany holds the esteemed rank of being the third-largest both in terms of imports and exports of goods. The German federal government articulated its plans to augment investments in transportation infrastructure, signaling a commitment to allocate additional funds in 2022. This commitment materialized through an allocation exceeding EUR 12 billion (USD 12.80 billion) for federal highways and approximately EUR 1.7 billion (USD 1.81 billion) for waterways in the same year.
- The German government intends to invest more in rail than roads to promote environmental protection, sustainability, and effective transportation. In 2022, Deutsche Bahn, the federal government, and the local and regional governments invested roughly EUR 13.6 billion (USD 14.51 billion) in rail infrastructure. Lower Saxony, Hamburg, Bremen, Mecklenburg-Western Pomerania, and Schleswig-Holstein, together with DB, invested in modernizing their rail networks by 2030.
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Fuel prices in Germany have been rising rapidly owing to high annual inflation rate
- In January 2022, Germany's daily average diesel price was USD 1.66 per liter, almost 37 cents (USD 0.37) more than the average monthly diesel price in January 2021. The price of E10 premium petrol also followed a similar trend. In January 2022, it cost USD 1.84 a liter, 32 cents (USD 0.32) cheaper compared to January 2021. The price hike for diesel and E10 fuels can be attributed to rising oil prices. Crude oil price indicators WTI and Brent Crude hit seven-year high in 2022.
- Transport prices on Europe's roads reached an all-time high in Q4 2021, the sixth consecutive quarter recording an increase in freight rates. On the carrier side, the biggest drivers behind this development were rising fuel costs, up by 25% YoY in Germany. However, petrol and diesel fuel were more expensive in Germany than in the rest of the European Union. As the discount on fuel expired, motor fuel prices in Germany increased, with filling stations charging more for petrol and diesel fuel than those in all the EU countries bordering Germany.
- German consumers faced the fastest price rise, and the high annual inflation rate was primarily driven by extreme price increases for energy and groceries since the Russia-Ukraine War. Germany is among the world's biggest natural gas importers. Around 95% of its gas consumption is met by imports. In 2022, 55% of gas imports came from Russia, 30% from Norway, and 13% from the Netherlands. The prices of heating oil (up 87%) and natural gas (up 64.8%) increased the most, while electricity prices rose by 20.1%. Petroleum and diesel prices at the pump increased by 26.8% for drivers.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- German manufacturers intend to invest more than USD 10 billion in smart manufacturing technologies by 2025
- Germany's e-commerce sector declined by 12% YoY in 2022 due to effects of the war in Ukraine and rising inflation
- Germany ranked 3rd in 2023 Logistic Performance Index with a score of 4.1, dominates in the European market
- Germany recorded 64% annual growth in automobile exports in March 2023, driven by rise in automobile production
- Driver shortages and fuel costs impact operational costs and raise the overall logistics costs in the country
- Despite leading the heavy commercial vehicle market in Europe, Germany witnessed decline in 2022 sales owing to supply chain constraints
- Transport prices in cross-border traffic witnessed record high increases in 2021 followed by rise in fuel prices and driver wages
- Increasing energy and food prices have accounted for record levels of inflation
- Rising construction industry and strong retail sales boost GDP growth in the economy
- Germany is the largest Additive Manufacturing (AM) market in Europe and is expected to grow by 15% in the coming years
- Germany, one of the most established logistics corridors in Europe, focuses on national highway policies, investments, and modernization of existing roads
- Germany envisages increasing LNG imports from the US, Qatar, and the UAE in 2023, with an aim to reduce Russian imports
- Rising truck demands in the European region witnessed led by France and Germany owing to rising road freight volumes
- Investments worth USD 8 million towards development of federal highways will enhance road freight volumes in Germany
- Investments in road and rail projects coupled with pipeline expansion projects are driving growth
