Major price pressure is affecting the transportation industry in Europe. The introduction of increased road toll rates as of December 1, 2023 in Germany is already impacting the production expenses of companies. However, a true price explosion in the industry may still lie ahead.
The European Freight Association of International Freight Forwarders (ELVIS) AG has warned that the current decline in the overall truck mileage, together with the current excess of freight capacity and the expected drop in sales, may be fatal. Since the freight yard is currently shrinking, its volumes will no longer be available on short notice if the market begins to recover. As a result of this process, a sharp rise in the spot market prices and a shortage of cargo capacity may occur.
The Logistics Indicator created by the Federal Association of Logistics (BVL) and the Ifo Institute also does not give cause for optimism: in the first quarter of 2024, the business climate in the logistics industry has further deteriorated. The index dropped to 81.8 points. Fewer respondents evaluated the business situation as good, while more market participants expect a difficult half-year term.
The leading indicators that are available at present do not suggest a reversal of the economic trend in early 2024. The situation with orders has deteriorated in all sectors of the economy, and the majority of respondents believe that the order portfolio is too small.
Source: trans.info