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European Road Freight Transport 2017

European Road Freight Transport 2017

Supply side issues looming for the European road freight market, warns latest Ti report

Ti’s latest report, European Road Freight Transport 2017, warns that a number of supply side issues cloud the future of the industry.

Driver shortages are a serious concern, EU proposals affecting minimum wage and cabotage rules threaten upheaval, while technological innovations pose a number of questions.

Platooning and digital freight marketplaces are affecting the market now or will in the near future, while further down the line, electric vehicles, alternative fuels and autonomous vehicles threaten more dramatic change.

Ti Analyst, Alex Le Roy, stated: “Various technologies are gradually extending their influence over the physical activity of road transportation, in addition to the allocation of resources.”

However, Le Roy also notes that ‘disruption’ of road transportation is highly unlikely, and that most of the significant developments are incremental in nature: “We are a long way from truly driverless vehicles at present, but elements of the driver’s experience are gradually becoming more automated,” he said, adding, “practices such as platooning are likely to become commercially viable in the near future.”

A survey by Ti of European road freight stakeholders, published in the report, provides insight into the market’s view of some other key supply side issues.

Viki Keckarovska, Research Analyst, remarked: “The industry believes driver shortages will pose a major threat over the next five years, with government anti-diesel regulations and city bans also at the forefront of minds.

She added: “Disagreements over the EC’s Mobility Package of road freight reforms appear to reflect a West-East clash, with the proposals attempting to reach compromises. For example, the proposed rules on posted workers protect Western European companies more than the status quo, whereas the proposed changes to cabotage rules imply the opposite.”

As for the demand side, market volume growth continues to bump along in the low single digits. Ti’s market sizing study estimates that the European road freight market grew by 2.4% in real terms in 2016, with the market expected to grow at a real compound annual growth rate (CAGR) of 3.0% from 2016 to 2020.

The operating environment is by no means easy for the market leaders, with operating margins stubbornly low for the likes of DB Schenker, DHL Freight and Kuehne + Nagel, as DSV continues to lead the pack in terms of profitability.

Andy Ralls, Quantitative Analyst, commented: “The road freight market remains a fragmented and competitive space where providers face a tough battle to increase volumes and market share. They cannot rely on overall market volume growth to keep their businesses strong. Market growth rates are in the low single digits and will remain there for the foreseeable future.”

Common growth strategies among leading road freight providers appear to focus on IT and R&D spending, diversification into adjacent services and boosting sector-specific offerings.

Overall, the demand side of the market remains fairly predictable, but the same certainly cannot be said for the supply side. Industry stakeholders need to carefully understand the key issues and adjust their strategies accordingly going forward.


1.1 KEY FINDINGS
1.2 MARKET STRUCTURE
1.3 EUROPEAN ROAD FREIGHT SUPPLY SIDE ISSUES AND TRENDS
1.4 EUROPEAN ROAD FREIGHT DEMAND SIDE ISSUES AND TRENDS
1.5 SUPPLY CHAIN FRAGMENTATION
1.6 VEHICLE UTILISATION AND RATES OF EMPTY RUNNING
1.7 COST STRUCTURES
1.8 FREIGHT RATES
1.9 THE RELATIVE IMPORTANCE OF DOMESTIC AND INTERNATIONAL ROAD FREIGHT IN EUROPE
1.10 THE NATURE OF INTERNATIONAL ROAD FREIGHT TRANSPORT
1.11 CABOTAGE
1.12 ADDITIONAL ROAD FREIGHT DATA SEGMENTATION
2 The Impact of European Policy on the Road Freight Sector
2.1 KEY FINDINGS
2.2 THE EUROPEAN COMMISSION MOBILITY PACKAGE
2.3 ROAD CHARGING
2.4 LOW-EMISSION ALTERNATIVE ENERGY FOR TRANSPORT
2.5 CABOTAGE RULES
2.6 ESTABLISHMENT AND ‘LETTERBOX COMPANIES’
2.7 POSTING OF TRUCK DRIVERS
2.8 USE OF HIRED GOODS VEHICLES
2.9 OPERATOR LICENSING IN THE VAN SECTOR
2.10 DRIVING AND REST PERIODS
2.11 BREXIT AND EU POLICY
2.12 CONCLUSION
3 Cargo Crime
3.1 KEY FINDINGS
3.2 WHAT IS CARGO CRIME?
3.3 THEFT FROM TRUCKS AND WAREHOUSES
3.4 COMBATING VEHICLE-BASED CARGO CRIME
4 Road Freight Innovation
4.1 KEY FINDINGS
4.2 ALTERNATIVE FUELS
4.3 VEHICLE AUTOMATION
5 European Road Freight Market Survey
5.1 KEY FINDINGS
5.2 FREIGHT RATE CHANGES
5.3 M&A ACTIVITY
5.4 LTL AND FTL GROWTH
5.5 STANDARD AND EXPRESS GROWTH
5.6 NEW TECHNOLOGIES
5.7 FULLY DRIVERLESS VEHICLES
5.8 THREATS TO ROAD FREIGHT OPERATIONS
5.9 EC MOBILITY PACKAGE
5.10 BREXIT AND THE IMPACT ON UK-EU TRAFFIC
5.11 DIESEL BANS
6 Market Size And Forecasts
6.1 KEY FINDINGS
6.2 TOTAL MARKET SIZE (2016)
6.3 TOTAL MARKET SIZE (2017)
6.4 TOTAL MARKET FORECAST
6.5 TOTAL MARKET FORECAST BY COUNTRY
6.6 TOP 10 EUROPEAN ROAD FREIGHT TRANSPORT PROVIDERS
6.7 DOMESTIC AND INTERNATIONAL ROAD TRANSPORT MARKET
6.8 DOMESTIC ROAD TRANSPORT MARKET SIZE AND GROWTH

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