European road freight transport (t-km) contracted by 3.2% in 2023.
Traffic (km) on toll roads in Germany dropped by 3.9%. In H1 2024, it decreased by 1.3% y/y. Polish carriers performed slightly better (-1.20% y/y) but considering weight of goods transported in all directions they increased by 0.4% y/y (Pic. 1&2).
In July 2024, IRU predicted the European road freight transport work will grow by 0.4% in 2024, and by 1.6% in 2025 (Pic. 5). The main driver of the change will of course be the rate of change in the EU economy, and here the forecasts point to a rather gentle increase. According to the latest European Commission forecasts, GDP in the EU will grow by 1% in 2024 and 1.6% in 2025 (Pic. 9).
The contract index slightly fell to 127.1 points in Q2 2024, dropping 1.3 points q/q. In contrast, the spot index increased to 127.7 points after a 3.5-point increase q/q. Year-on-year, the spot index is now up by 0.8 points whilst the contract index is down 0.7 points (Pic. 4). Low levels of consumer demand have pushed spot rates down since Q2 2023, however due to the less negative demand environment, spot rates have begun to normalize.
The lack of industrial demand contributed to the contract index dropping by 1.3 points q/q.
In Jan-Jul 2024, registrations of new trucks in Poland fell by 14% y/y, a decline for road tractors alone was even greater at 18% y/y (Pic. 6). Many carriers reduced their fleet (sale, lease/rent cancellation), adjusting to the market and their financial situation. The confirmation of low demand and uncertainty is also provided by low current vehicle orders and low used trucks demand.
In Europe, there is a shortage of around 233k drivers, including 29k in Poland. This is less compared to estimates from 2021 (approx. 400k), mainly due to the decline in demand for transport (see Pic. 7). However, driver demographics are currently the biggest threat to driver supply and the shortage is expected to grow in the next years.
The consequence of falling volumes and rates was lower revenues. In 2023, Polish carriers’ revenues fell by 4.6%, with H1 still higher by 3.1% y/y, but in H2 they fell by 11.0% y/y. However, in Q1 2024 it remained almost unchanged (-1% y/y for entities over 49 employees).
Profitability on sales in H2 2023 fell to 3.1% from 5.8% in H2 2022 (Pic. 9). In was also very low in Q1 2024, i.e. 1.1% vs 4% in Q1 2024 (Pic. 9).
In H1 2024, the number of insolvencies in total transport in Poland significantly increased by 60% y/y, i.e. from 287 to 458, but most of them were small or medium entities (Pic. 10).
For more information regarding TSL sector, please contact the author of the report:
Radosław Pelc
Automotive & TSL analyst, Santander Bank Polska
Radoslaw.Pelc@santander.pl
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