The latest Road Transport Market Update from DSV offers a comprehensive insight against the backdrop of the European logistics sector's fluctuative dynamics, noting significant challenges such as economic headwinds, fluctuated capacities, and soaring costs.
According to DSV’s report, the Euro area is grappling with continuing economic turbulence, marked by inflation indexing up to 2.5% in January 2025 from 2.4% the previous month. This increase has been fueled largely by surging energy prices, which climbed from 0.1% to 1.8%. Compounding these issues, GDP growth stagnated during Q4 2024, reflecting the weakest performance recorded for the year, following merely modest growth of 0.4% observed earlier.
DSV highlights a tightening of freight capacity, with the European road freight capacity index signaling a downturn of 5% year-over-year. This index recorded at 97.2 back in Q4 2024 has since dipped to 95.4 by January 2025. Diesel prices, instrumental to road transport, have also skyrocketed from €1,545.06 at the tail end of 2024 to €1,621.15 within the new year, exacerbately impacting operational viability for transport companies.
Contract rates for freight demonstrated some resilience, increasing by 2.8 points quarter-over-quarter to reach 128.9, yet faced year-over-year decline of 1.4 points. Spot rates exhibited similar trends, witnessing minor rises yet again recording drops annually.
The report also noted alarming increases in transport company bankruptcies within Europe. Over the past year, France has faced staggering growth of 37.8% with 1,339 companies going under, alongside Belgium suffering from a 50% increase. Germany has similarly reported rising transport failure rates, amplifying worries across the sector. The UK has not escaped unscathed either, with nearly 500 carriers shutting down throughout 2023, leading to projections of another 10% hike in failures for 2024.
A prevalent issue, the driver shortage, saw some relief throughout 2024 but according to DSV, it is expected to intensify again by 2025. Cited as contributing factors are the industry's aging workforce and persistent challenges surrounding the recruitment of younger drivers, which exacerbates labor deficits within the sector.
Further adding to the industry's complexity are sweeping regulatory changes. DSV’s February 2025 update highlights phase 5 of the New Computerised Transit System (NCTS), initiated on January 21, aimed to bolster tracking and compliance across 29 countries, albeit with more extensive data reporting requirements imposed on transport companies.
Other regulatory shifts include the EU Emissions Trading System (ETS), which, as of 2025, mandates shipping companies to grapple with 70% of their emissions costs through allowances, likely leading to increased expenses affecting both companies and their clients. Changes to road toll structures across Europe are also adding another layer of financial pressure on operators, necessitating prompt cost management adaptations.
Given the data gathered from DSV’s analysis, the upcoming year, 2025, signifies potentially demanding times for the freight transport sector. Conditions reflecting economic uncertainties, burdensome operational costs paired with new regulations will play pivotal roles shaping the future of this industry. Notably, proactive measures, alongside strategic agility are deemed necessary for transport companies to thrive amid the pressures of their operational climate.
DSV emphasizes the importance of resilience and adaptability as linchpins necessary for survival and success within the looming freight transport challenges.