Spring launch for Brittany Ferries new rail freight 'motorway'
The launch of Brittany Ferries’ long-awaited rail freight ‘motorway’ service for unaccompanied trailers, running between ...
FDX: ABOUT USPS PRIVATISATIONFDX: CCO VIEWFDX: LOWER GUIDANCE FDX: DISRUPTING AIR FREIGHTFDX: FOCUS ON KEY VERTICALFDX: LTL OUTLOOKGXO: NEW LOW LINE: NEW LOW FDX: INDUSTRIAL WOESFDX: HEALTH CHECKFDX: TRADING UPDATEWMT: GREEN WOESFDX: FREIGHT BREAK-UPFDX: WAITING FOR THE SPINHON: BREAK-UP ALLUREDSV: BREACHING SUPPORTVW: BOLT-ON DEALAMZN: TOP PICK
FDX: ABOUT USPS PRIVATISATIONFDX: CCO VIEWFDX: LOWER GUIDANCE FDX: DISRUPTING AIR FREIGHTFDX: FOCUS ON KEY VERTICALFDX: LTL OUTLOOKGXO: NEW LOW LINE: NEW LOW FDX: INDUSTRIAL WOESFDX: HEALTH CHECKFDX: TRADING UPDATEWMT: GREEN WOESFDX: FREIGHT BREAK-UPFDX: WAITING FOR THE SPINHON: BREAK-UP ALLUREDSV: BREACHING SUPPORTVW: BOLT-ON DEALAMZN: TOP PICK
The European road freight market could shrink by almost 20% this year, due to the coronavirus pandemic.
In new research from Transport Intelligence (Ti), published today, Ti’s original forecast of 2.1% growth in Europe’s road freight has had to be radically revised with the outbreak of Covid-19 and the subsequent social lockdown.
It says the best Europe’s road freight operators could hope for now would be a 4.8% contraction, and in the worst case it could be a 17% contraction, which it described as “far worse than the great recession of 2008/9”.
However, the broad projections also mask significant variations across geographies and verticals.
The big five European markets – Germany, the UK, France, Spain and Italy – are projected to suffer a cumulative decline of 5.6% in the best case, and 21.3% at worst.
The variation largely depends on how long lockdowns continue and their effect on demand.
“The analysis shows that deviation from the expected pathway of recovery could, in extreme circumstances, see more than one-fifth of the big five’s combined market value erased this year.
“Note, the ‘severe impact’ scenario assumes that, essentially, the lockdown measures introduced during March across much of the region remain in place for much of the year, an increasingly unlikely outcome,” the report says.
Ti previously forecast that the five markets would see a combined growth of 1.4%, but with key industries such as automotive manufacturing effectively shuttered by the pandemic, road freight operators have been subject to wild fluctuations in demand.
The report says this has had “particularly large impacts on the German market, but has also pushed knock-on effects into Central Europe that supply the operations. By the third week in March, production had largely come to standstill”.
It adds: “This will have been serious for the large LTL network providers, as they are heavily reliant on the automotive sector to provide a ‘base-load’ for the network.”
Similarly, the apparel and footwear sector has seen demand drop by more than half across Europe, far more in Italy and Spain, while supply of these products has been hit by sourcing issues in Asia.
And even the grocery distribution sector, the focus of so much attention in the early days of lockdown, is beset by considerable uncertainty, and “has varied from economy to economy as the Covid-19 crisis has developed, with the UK and the Netherlands in particular, seeing ‘panic-buying’.
“The situation in France, Italy and Spain has swung from panic buying to collapse very rapidly, with falls in demand and violent changes in the behaviour of the supply chain, often due to disruption in accessing supply,” says the report.
“The question here is, how effective has been the redeployment of capacity from other market segments into grocery?”
As economies begin to emerge from the emergency phase of the pandemic, Ti predicts, grocery demand could collapse, while “prices jump in other areas such as consumer durables or clothing as the market recovers rapidly and retailers look to replenish stock”.
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