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Weak demand is hurting this year profitability of European road transport operators as contract and spot rates are down during the first quarter, according to Upply, Ti and the IRU European Road Freight Rate Development Benchmark Report.
According to the report, muted consumer demand is exacerbating forecasts for the sector. The world is embroiled in a trade war which makes European manufacturers find themselves in a disagreeable situation of constant uncertainty and which causes demand for their products to decline across the globe. This leads to a fall in spot and contract rates.
The report also notes that geopolitical changes and global instability have led to a renewed focus on boosting local and regional economies. As a result, the Stronger Europe Buy European initiative was launched, which encourages the use of European products, support for European businesses and the preference for European alternatives as substitutes for non-European options.
The failure of EU policymakers to harmonise green policies and adequate sector funding gives cause for particular concern. A specific environment, particularly favourable for SMEs, should be created to park money in long-term investments, to execute digital transformations and implement decarbonisation.
Source: theloadstar.com