Market Trends of czech republic road freight transport Industry
Government-led infrastructure development plans and private players' warehouse constructions are bolstering GDP growth since 2023
- In June 2024, the European Investment Bank (EIB) and the Czech Ministry of Finance finalized a USD 580.69 million loan agreement to enhance major railway projects in the Czech Republic. This financing is part of a larger USD 2.17 billion operation by the EIB. The initiative aims to increase the capacity of the Czech railway network for freight and passenger transport, prioritizing safety and comfort. The upgrades will benefit railway lines nationwide, strengthen the trans-European transport network (TEN-T), and facilitate the implementation of the European Rail Traffic Management System (ERTMS), boosting the GDP contribution from the transport and storage sector.
- In June 2022, DB Schenker unveiled its plans to establish a cutting-edge facility in the Czech Republic in 2023. This new distribution hub took care of retail functions and B2C e-commerce operations, featuring a comprehensive service area tailored to meet consumer demands for personalized products. Situated near Prague Airport and a key highway leading to Germany, the logistics center was strategically positioned to ensure swift deliveries to customers across Central and Eastern Europe. At peak times, the center employed over 1,000 operators.
- The Czech Republic is set to kick off construction on its long-anticipated high-speed railway line in 2025. The inaugural segment will connect Brno to Přerov. In 2026, attention will shift to the stretch linking Brno and Břeclav, followed by the Moravská brána section, which is slated to commence by 2028 at the latest. Sections leading to Prague are projected to start around 2030. To speed up the process, a new system has been introduced where the pay of Railway Administration officials is linked to how quickly they start building the high-speed line.
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A fall in fuel prices witnessed in 2024 in the Czech Republic in comparison to other Central and Eastern Europe (CEE) countries
- In August 2024, fuel prices in the Czech Republic fell to their lowest since February, with gasoline costing between 1.56 USD/liter and 1.69 USD/liter and diesel being even cheaper. As a result, Polish drivers are traveling to the Czech Republic to fill up, benefiting from the lower prices. For instance, gas stations in Poland, like those in Chałupki near Ostrava, now charge about 0.138 USD/liter more than in the Czech Republic. As a result, Czech vehicles are no longer seen at Polish gas stations, while Polish-registered vehicles are now frequently spotted at gas stations near the Czech border.
- In December 2022, the Czech government enacted a measure to cap electricity and natural gas prices for large firms, aligning them with the rates already set for households and small businesses. Specifically, the prices are fixed at USD 0.22 per kilowatt-hour (kWh) for electricity and USD 0.11 per kWh for natural gas, both excluding value-added tax. This pricing strategy, applicable to 80% of past consumption, aims to encourage savings. Furthermore, the aid provided was limited to the maximum permissible level within the EU, set at USD 4.41 million for each company.
- The Czech Republic, a close ally of Ukraine, has allowed its oil refineries to make over a billion euros in extra profits by buying discounted Russian fuel, even though other options have been available for a while. After Russia invaded Ukraine, the European Union exempted the Czech Republic from its ban on Russian oil to help landlocked countries like Hungary and Slovakia find new fuel sources. Looking ahead, gasoline prices in the Czech Republic are expected to be around 1.84 USD/liter in 2025 and 1.93 USD/liter in 2026.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- ČEZ Group aims to achieve 6 GW of renewable energy by 2030, advancing toward emission-free energy
- The Czech e-commerce industry is expected to see significant growth, driven by cross-border sales and innovative strategies
- Infrastructure development initiatives are underway, aimed at enhancing the country's Logistics Performance Index (LPI) rank
- The Czech Republic aims to boost exports with its new Export Strategy 2023-2033
- Investments in the road infrastructure are expected to impact operational costs by reducing travel times
- E.ON and MAN aim to establish around 400 charging stations for electric trucks in Europe
- Net zero emission initiatives are expected to support a future reduction in road freight pricing, driven by the adoption of electric vehicles
- In 2024, a surge in food and beverage costs drove a MoM increase in the inflation rate
- Czech receives USD 1.75 billion from the EU to phase out coal power by 2033 and achieve climate neutrality
- Rising investments are expected to boost the Czech automotive sector significantly
- New contracts are consistently being awarded, leading to a steady increase in road length
- The Czech Republic is expected to shift from electricity exporter to an importer by 2030 due to coal plant closures
- Subsidy support of up to USD 618 million is needed to electrify 6,000 HDVs in the Czech Republic by 2030
- Despite the manufacturing segment seeing decline, advancements in road infrastructure has increased volumes
- Infrastructure initiatives are enhancing various modes of transport and bolstering the overall economy
