Q1 2023 truckload capacity outweighed shipper loads in Europe, with lessened freight demand placing downward pressure on prices,triggering a fall in freight rates.
German toll hikes and heightened truckload demand during peak season saw prices rally in H2 2023, with carrier rates ending the year up 1% above January levels.
The spot market saw a downturn in Europe, with sennder observing an overall decline of 47% market spot opportunities YoY.
Carrier rates on loads from Germany to Poland grew by 17%, the largest increase among key corridors, driven predominately by fuel prices and industrial action from drivers over EU legislation.
Electric trucks and HVO fuels are likely to see growth in 2024 as the industry seeks to meet growing regulation to decarbonise road freight.
Berlin, 1 February 2024 – sennder, a leading digital road freight forwarder in Europe, has released its second European Road Freight 2023 Year in Review, a market report focusing on the key industry-shaping trends of 2023, based on proprietary data from its network of approximately 40,000 trucks. The report provides analysis of the road freight industry landscape with an outlook on the trends that will impact the industry in 2024.
Julius Koehler, Co-founder and Managing Director at sennder, said: “2023 was another unprecedented year for our industry. Against a backdrop of continued market volatility and the ever-present urgency of climate action, we see shippers and carriers seizing technological opportunities and adapting to new environmental and regulatory demands.The outlook for 2024 is clear: Digitalization is key to navigate lower shipper demand and persisting macroeconomic challenges.”
Declining road freight rates in Q1 2023
2023 was a challenging year for the industry, with adverse global macroeconomic conditions taking their toll for shippers and carriers alike. Road freight demand, often a barometer of economic health, witnessed a downturn after the all-time high freight rates seen in 2022. Faced with the need to secure loads, carriers engaged in low-price strategies, driving down freight rates, with sennder identifying road freight rates falling as far as 9% in Q1 2023.
Yet, European carrier rates were up 1% above January 2023 levels by EoY. This was caused by peak season demand and new German road tolls from December 2023 which increased toll costs by up to 83% for carriers operating on German roads. German freight rates ended 2023 up by 6%, which sennder identified as being driven by these increases in cost.
Navigating the spot decline
The spot market saw a downturn in 2023, with sennder observing a 47% decline in market spot opportunities YoY. Unfavourable macroeconomic conditions suppressed consumer spending and business orders, leading to sustained excess truckload capacity.
During the freight ‘peak season’ (Black Friday weekend to the end of year holiday season), there was a lower peak in comparison to the past two years, with shipper orders down due to the decline in consumer spending. Despite this, sennder’s truckload volumes still peaked at 65% above average in the last week of November 2023, with many cost-conscious consumers waiting for Black Friday discounts before making significant purchases.
Julius Koehler, Co-founder and Managing Director at sennder, said: "In light of ongoing market volatility, sennder continues to expand its Control Tower business model for sustainable growth: We take over 100% of our customers' FTL business and digitize all parts of the interaction. This unleashes value for our customers, which is primarily in the form of lower costs. In this way, we build a reliable demand for base volumes, contracted loads and, on top of that, spot loads. This remains a priority for 2024."
Diving into key corridors
Among key corridors in Europe, while the Germany-to-Poland route remained flat at year-end, exports from Poland to Germany saw the largest growth in carrier costs, with per-km rates increasing 17% during the year. This was driven by increasing diesel prices and industrial action by Polish drivers impacting carrier availability. sennder’s Spain-to-Netherlands route remained stable, with variations across the year caused by recurring seasonal dynamics.
After a daily cap on the number of truck drivers permitted to enter the EU from Ukraine was temporarily lifted from July 2022, Ukrainian carriers gained dominant market shares of particular freight corridors. This led to protests from Polish truckers who took strike action and blockaded border crossings, calling for the reinstatement of the driver permit system by the EU.
Disruptions caused by the Russian invasion of Ukraine continued to impact global trade, supply chains and energy markets. Shipper order volumes remain subdued due to the lessened production and consumer spending during gradual economic recovery in major economies.
2024 outlook: Green transport on the rise
The green logistics market in 2023 saw renewed attention to low carbon transport solutions such as HVO and electric trucks. Access to HVO continued to expand in public fueling stations throughout 2023. sennder predicts this trend will most likely expand in 2024 with Germany and France relaxing current red tape around the sale of pure HVO.
Although HVO offers a cost-effective means for short-term carbon emission reduction, sennder predicts electric trucks are poised to play a key role in achieving net-zero emissions in road freight in the long run. New business models are emerging to overcome the challenges associated with large-scale EV adoption, such as high capital requirements and residual value risks.
Julius Koehler, Co-founder and Managing Director, sennder, said: "The industry must find new solutions for decarbonization, and new business models must be part of the strategy. As electrification still comes at high costs for shippers and carriers alike, industry collaboration is likely to be essential for progress in 2024. This particularly applies to small transport companies that need to rely on innovative models to gain access to otherwise cost-intensive e-trucks and increased capacity. We will continue to see a lot of movement in the market in 2024 and expect partnerships to be a key trend."
In 2023, sennder again observed a sharp rise in demand for green transportation solutions, and the outlook for 2024 is similar:
Graham Major-Ex, Director Green Business & eMobility, said: “With increasing regulatory requirements, but especially the enormous push towards cleaner road freight from our partner shippers and carriers, which was reflected in a 6-fold growth in demand for green transport last year, our forecast for 2024 is clear: green transport will continue to grow, it will be the year for advanced fuels and electric trucks.”
The full report can be found here.
sennder, a leading digital road freight forwarder in Europe, is offering shippers access to a connected fleet of thousands of trucks. In a traditional industry sennder is moving fast and focuses on the digitalization and automation of all road logistics processes. sennder deploys over 40,000 trucks across Europe, with access to more than 120,000 vehicles, and has a team of over 1,000 people. By leveraging its proprietary technology, sennder builds an ecosystem that leads the industry into the 21st century with a new degree of transparency, efficiency and flexibility. sennder is backed by some of Europe’s leading investors including Baillie Gifford, Accel, Lakestar, HV Capital, Project A, Scania Growth Capital, andPoste Italiane. Additionally, sennder joined forces with industry champions Scania and Siemens to assure innovation and state of the art offerings.