Market Trends of europe freight and logistics Industry
European Union allocated USD 5.76 billion to 135 transportation projects to boost economic recovery
- The transportation and warehouse sector plays a crucial role in supporting operations across various industries, with Germany leading as the dominant player, surpassing France and the United Kingdom. Globally, Germany ranks third in both imports and exports of goods. The German federal government expressed its intention to increase investments in transportation infrastructure, allocating over EUR 12 billion (USD 12.80 billion) for federal highways and around EUR 1.7 billion (USD 1.81 billion) for waterways in 2022, thereby demonstrating its commitment to improving transportation networks.
- The German government intends to invest more in rail than road network. In 2022, Deutsche Bahn, the federal government, and the local and regional governments invested roughly EUR 13.6 billion (USD 14.51 billion) in rail infrastructure. Lower Saxony, Hamburg, Bremen, Mecklenburg-Western Pomerania, and Schleswig-Holstein are partnering with DB to invest in modernizing their rail network by 2030.
- In 2022, the European Union approved EUR 5.4 billion through grants for approximately 135 transport infrastructural projects. These projects aim to aid post-pandemic economic recovery in the EU Member States, enhance transport links, promote sustainable transportation, boost safety, and create job opportunities. All supported projects are part of the Trans-European Transport Network, which connects EU Member States and aligns with the European Union's goal of completing the TEN-T core network by 2030 and the comprehensive network by 2050, all while aligning with climate objectives outlined in the European Green Deal.
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Since February 2023, diesel imports from the Middle East, Asia, and North America have increased due to the ban on imports from Russia
- In France, 2023 ended with a litre of SP95-E10 priced at USD 1.96 and diesel at USD 1.93. TotalEnergies (the French oil company giant) announced that it will keep a 1.99 euro per liter cap on French fuel prices throughout 2024. Moreover, in 2023, gas consumption in Germany dropped by 5% compared to 2022. While compared to the average consumption in the period 2018 to 2021, gas demand in Germany fell by 17.5%. Furthermore, the average cost of petrol at UK forecourts has risen to break 150p a liter (USD 1.80) since the start of 2023, and diesel has risen to 152.41p a liter (USD 1.83). Spanish fuel prices were lower than in the United Kingdom by about 20 cents per liter for petrol and 40 cents per liter for diesel in January 2023.
- Russia has been Europe’s largest supplier of diesel. In 2023, diesel prices declined in Europe. Since February 2023, when the European Union implemented the ban on petroleum product imports from Russia, diesel exports from Russia to Europe have averaged 24,000 barrels per day (b/d), down by 96% from the 630,000 b/d Russia sent to Europe in 2022. From February through May, diesel exports to Europe increased by 51% (160,000 b/d) from the Middle East, by 97% (147,000 b/d) from Asia, and by 65% (47,000 b/d) from North America.
- Denmark is the most expensive country for petrol, and Finland is the most expensive for diesel. Austria has the cheapest petrol, and Spain is the cheapest for diesel. Moreover, Germany anticipates a fuel price jump from 2027 EU emissions trading. An increase of 38 cents per liter of petrol and around 3 cents per kilowatt hour of natural gas at the beginning of 2027 compared to 2026.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- European countries witnessed a slow YoY population growth rate of 0.28% in 2022 due to low fertility and life expectancy rates
- The construction industry and oil and gas production are boosting GDP growth amid lingering challenges arising from the Russia-Ukraine War
- United Kingdom, France, and Germany together account for 60% of the total e-commerce revenue of Europe
- Automobiles and agricultural exports were among the top export contributors to the regional economy in 2022
- Fuel prices and a shortage of truck drivers in the region are leading to an increase in trucking operational costs
- European countries were among the top ranks of the global LPI in 2023 due to infrastructure and trade connectivity
- The European Union invested more than USD 5 billion in 2022 to increase rail in-freight transport's market share to 25% by 2030
- France, Spain, and Germany are enhancing their port connectivity to boost economic growth
- Sea freight rates decreased due to lower demand, owing to the ongoing global slowdown
- European countries have the highest rank in infra development, fueling investment for roads and modernizing its rail network
- The manufacturing sector is driving European economies on the back of massive investments from public and private players
- Increase in production and consumer prices is largely attributable to energy supply disruptions caused by the Russia-Ukraine War
- Manufacturing industry's contribution grew by over 7% YoY in 2022, led by the automobiles sub-segment
- European economies are diversifying their LNG import channels around the world, with a focus on reducing Russian imports
- Commercial vehicle registrations in the region witnessed a decline, with a slight growth in light commercial vehicle registrations
- To reduce carbon emissions, European truck manufacturers aim to sell only electric or hydrogen trucks by 2040
- Connectivity and infrastructural improvements, coupled with capacity expansion investments, are driving the market's growth in the region
- Despite low port productivity and increased berth waiting times, European ports have been witnessing stability concerning port congestion since September 2022
- The European region is increasing its investment in the logistics industry with a planned budget of USD 6 billion
