EUROPE ROAD FREIGHT TRANSPORT MARKET - GROWTH, TRENDS AND FORECASTS (2023-2028)

The Europe Road Freight Transport Market is estimated to grow with a compounded annual growth rate of about 3% during the forecasted period of 2023-2028.  

With a broadly suitable policy mix that supported a shift from public to private sector-led growth, Europe was on track to emerge from the epidemic at the end of 2021. This completely changed with Russia’s war in Ukraine and its effects. A significant terms-of-trade shock has hit Europe, weakening the outlook for growth, increasing the rate and duration of inflation, and causing a cost-of-living crisis that endangers social cohesion. In addition, concerns of medium-term output scarring—risks that were effectively averted during the pandemic—are reemerging. 

The European Commission reported that in 2021, the freight was transported to a total length of 1,145-billion-ton km, showing an increase of about 6.8% as compared to 2020. Key countries in the business include Poland and Germany with 217-billion-ton km and 193-billion-ton km respectively. Although the numbers denote an increase, the majority of this was backed by the growth in operations in the region post the upliftment of COVID-19 restrictions. This growth is also accompanied by the increase in freight rates in the region with fuel prices, driver shortage and drought being the reasons behind it. 

The countries in the region are also increasingly taking steps to reduce and regulate carbon emissions, especially from the transportation sector. countries in the region have introduced carbon tax per metric ton of carbon emission by vehicles.  

All these factors are affecting the logistics market and encouraging the companies to shift from the road freight mode of transportation to rail freight. The European Union has planned to double freight rail’s modal share by 2030, both to reduce the transport sector’s carbon emissions and to ease the congestion of major road connections. The strategy is to transfer a large proportion of transport from road to rail which is expected to impact the market in various ways including major long-distance freight flows, key connection points such as ports, and new industries that can replace volumes lost in declining sectors, positively. 

The highly fragmented and competitive market for road freight transportation in Europe is heavily influenced by industrial production quantities and general economic growth. Deutsche Post DHL Group, DB Schenker, Dachser and DSV along with a mix of international and domestic players are some of the leading players in the market.