Market Trends of germany freight and logistics Industry
Germany leads European logistics and transportation with USD12.80 billion investment in highways in 2022
- The German transportation industry is key to maintaining well-functioning services and moving goods within and outside the nation. The country has some of the highest-ranked infrastructural networks in the world, with its roads being some of the more heavily traveled thoroughfares in Europe. Transportation and storage recorded a high growth rate of 6.80% YoY in March 2022 and a low rate of -1.60% YoY in March 2021 due to the recovery from the pandemic and the resumption of trade with foreign countries.
- The transportation and warehouse sector's significance extends to the facilitation of operations in various other industries. Germany asserts its dominance, surpassing even the second and third-largest logistics markets, namely France and the United Kingdom. Globally, Germany holds the esteemed rank of being the third-largest both in terms of imports and exports of goods. The German federal government articulated its plans to augment investments in transportation infrastructure, signaling a commitment to allocate additional funds in 2022. This commitment materialized through an allocation exceeding EUR 12 billion (USD 12.80 billion) for federal highways and approximately EUR 1.7 billion (USD 1.81 billion) for waterways in the same year.
- The German government intends to invest more in rail than roads to promote environmental protection, sustainability, and effective transportation. 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, together with DB, invested in modernizing their rail networks by 2030.
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Fuel prices in Germany have been rising rapidly owing to high annual inflation rate
- 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%. In January 2022, Germany's daily average diesel price was USD 1.66 per liter, almost 37 cents (USD 0.37) more than the average monthly diesel price in January 2021. Whereas the price of E10 premium petrol reduced. In January 2022, it cost USD 1.84 a liter, 32 cents (USD 0.32) cheaper compared to January 2021. The price hike for diesel and E10 fuels can be attributed to rising oil prices.
- Transport prices on Europe's roads reached an all-time high in Q4 2021, the sixth consecutive quarter recording an increase in freight rates. On the carrier side, the biggest drivers behind this development were rising fuel costs, up by 25% YoY in Germany. However, petrol and diesel fuel were more expensive in Germany than in the rest of the European Union. As the discount on fuel expired, motor fuel prices in Germany increased, with filling stations charging more for petrol and diesel fuel than those in all the EU countries bordering Germany.
- German consumers faced the fastest price rise, and the high annual inflation rate was primarily driven by extreme price increases for energy and groceries since the Russia-Ukraine War. Germany is among the world's biggest natural gas importers. Around 95% of its gas consumption is met by imports. In 2022, 55% of gas imports came from Russia, 30% from Norway, and 13% from the Netherlands. 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
- The population of Germany increased by more than 84 million in 2022 as the number of immigrants rose due to the Russia-Ukraine War
- Rising construction industry and strong retail sales boost GDP growth in the economy
- Germany's e-commerce sector declined by 12% YoY in 2022 due to effects of the war in Ukraine and rising inflation
- Germany recorded 64% annual growth in automobile exports in March 2023, driven by rise in automobile production
- Driver shortages and fuel costs impact operational costs and raise the overall logistics costs in the country
- Germany ranked 3rd in 2023 Logistic Performance Index with a score of 4.1, dominates in the European market
- Investments in road and rail projects coupled with pipeline expansion projects are driving growth
- Germany is developing its port infrastructure and enhancing hinterland connectivity to cater to trade volumes generated from major maritime partners
- Freight rates are continuing to rise due to inflation and residue impact of the Russia-Ukraine war
- Germany has invested around USD 63 billion in a green future and in boosting the construction industry
- German manufacturers intend to invest more than USD 10 billion in smart manufacturing technologies by 2025
- Increasing energy and food prices have accounted for record levels of inflation
- Germany is the largest Additive Manufacturing (AM) market in Europe and is expected to grow by 15% in the coming years
- Germany envisages increasing LNG imports from the US, Qatar, and the UAE in 2023, with an aim to reduce Russian imports
- Rising truck demands in the European region witnessed led by France and Germany owing to rising road freight volumes
- Despite leading the heavy commercial vehicle market in Europe, Germany witnessed decline in 2022 sales owing to supply chain constraints
- Feeder services construction and restructuring led to container throughput growth with Nordic countries in 2022
- German ports faced severe congestion challenges in 2022, driven by labor issues, port capacities, and the Russia-Ukraine conflict
- Investments in roads, highways, rail, and air freight are serving as growth drivers in the country
