Market Trends of nordics freight and logistics Industry
Sweden dominates the GDP of the Nordic transport sector, fueled by modern logistics infrastructure
- The Nordic transportation and storage sector saw a substantial YoY increase, rising from 11.57% in 2021 to 19.71% in 2022, due to Nordic countries' strong rankings in the Logistic Performance Index and their excellent trade infrastructure. Among these nations, Sweden stands out as the primary contributor to the sector's GDP. Sweden's robust high-income economy has fostered a modern and technologically advanced transportation industry, with Gothenburg emerging as a prominent logistics hub, supported by the Port of Gothenburg and new logistics facilities. The Port of Gothenburg, Sweden's largest, has consistently gained a larger market share, growing from 48% to 51% in 2021 and handling 828,000 TEUs.
- The growth of cold storage is driven by expanding global and European trade, as companies increasingly turn to cold storage warehouses to prolong the shelf life of their products. Sweden's logistics market is the largest in the Scandinavian region, with substantial infrastructure investments, making it a top logistics market in Europe. However, in the second quarter of 2023, Sweden's transportation sector GDP declined to SEK 41,510 million (USD 3,793.47 million), down from SEK 45,794 million (USD 4,184.97 million) in the first quarter of the same year.
- The Danish government has unveiled Denmark Forward, a new plan to invest DKK 160 billion (USD 22.96 billion) in infrastructure through 2035. The plan will improve the national road and railway systems, benefiting people and businesses. In recent years, Norway's public investment in transportation has significantly increased, which could have significant economic benefits, especially since good transportation infrastructure can aid in Norway's transition away from oil-related activities.
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Owing to the impact of the Russia-Ukraine war on fuel prices globally, fuel prices in the Nordic countries are rapidly increasing
- To combat the significant increase in fuel prices in Norway during 2022, the government implemented tax reductions starting from January 1, 2023. These reductions include eliminating the basic tax on mineral oil and lowering the road use tax on fuel. The aim of these measures is to lower prices for consumers when refueling their vehicles. The total reduction in fuel taxes amounted to USD 223 million in 2023, with the road use tax on fuel decreasing by USD 190.53 million. However, there's an increase in CO2 tax for road traffic, leading to a revenue boost of USD 127.7 million for the state. Overall, the net tax reduction on fuel in road traffic is over USD 60.80 million.
- In 2021, a liter of diesel was more expensive in Sweden, from USD 0.014 increase to USD 1.85. The reason for the hikes was a global rise in market prices for oil, which is currently at a three-year high. Diesel was particularly affected because it is an expensive fossil fuel with more biofuels than others and due to policies aimed at protecting the environment. In 2022, the price continuously increased due to the increased demand for diesel. The Ukraine-Russia war also impacted the fuel price globally however, the government has adopted a reduced energy tax on diesel and gasoline.
- In January 2024, Denmark launched the Green Fuels Alliance India (GFAI) initiative to strengthen cooperation between Denmark and India in sustainable energy solutions and achieve carbon neutrality while stabilizing fuel prices in Denmark. Key players include Maersk, Topsoe, and Novozymes. Denmark, recognized for its environmental efforts, also ranked 1st in the global Climate Performance Ranking 2024 and aims to achieve carbon neutrality by 2050. These initiatives have led to increased GDP growth forecast to 2.4% for 2024.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- The Nordic region's population witnessed 0.49% YoY growth in 2021 and is projected to achieve a 9.7% increase by 2030
- The oil and gas, mining, and quarrying sector contributes the highest to economic development in the region, led by Norway
- E-commerce in the region is expected to register a CAGR of 8.67% during 2023-27, supported by rising social commerce
- Nordic countries registered substantial export growth in 2022, driven majorly by fuel exports
- Driver shortages and fuel costs are impacting operational costs in the Nordic countries
- Finland ranked 2nd in the Logistics Performance Index due to its extensive rail network connectivity
- Norway's USD 128 billion transportation investment and Sweden's highway development initiative driving growth
- The Nordic maritime sector infrastructure needs a major boost to increase shipping activity occurring between bilateral partners
- Economic factors like inflation, diesel prices, and demand are impacting freight pricing in the region
- Denmark's ambitious USD 22.95 billion investment is expected to drive green transportation by 2035
- Nordic countries are working toward transforming the regional economy with a focus on sustainable manufacturing
- Ukraine's invasion by Russia sharply impacted Nordic PPI and CPI
- The manufacturing industry accounts for more than 50% of the exports from Nordic countries
- The Nordic region registered growth in imports in 2022, led by high imports of food, machinery, and transport equipment
- Rising commercial vehicle registrations were witnessed in the Nordics despite the overall decline in Europe
- Volvo trucks emerging as the market leader for electric trucks in 2022, with a market share of 42%
- Marginal capacity fluctuations, coupled with increasing exports and the presence of rich maritime resources, are driving growth in the region
- Among the Nordic countries, port calls in Sweden witnessed the highest YoY growth of around 6.2%
- Increasing infrastructure investments and capacity expansion initiatives across modes of transport are expected to boost volumes during 2023-2030
