Introduction
Once again, our Road Quarterly Market Update dives into the dynamic landscape of road transport in the Euro Area. As always we update you on the economic developments, but this time we especially explore the inflation impact on the road transport industry. We have also included an update of the sustainability efforts DSV are initiating towards 2030.
General Economic Development: Euro Area
In the Euro Area:
- In March 2024, the consumer price inflation rate in the Euro Area declined to 2.4% year-on-year.
- The Consumer Confidence indicator increased further to -14.9 in March. Consumer confidence still scores well below long-term average.
- Energy prices saw a decline of 1.8% (vs -3.7% in February), while the service inflation is continuously remaining steady at 4.0%.
- The rate for price increase slowed down for food, alcohol, and tobacco from 3.9% to 2.7% in March. The same did the price for non-energy industrial goods from 1.6% to 1.1%.
- The core inflation rate, excluding volatile food and energy items decreased from 3.1% to 2.9%, hitting a two-year low.
- On a monthly basis, consumer prices increased by 0.8% in March, following a 0.6.% rise in February.
Source: World Bank, Eurostat
Transport Capacity and Fuel Prices
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Capacity Index vs Diesel Price
First quarter of 2024 capacity went up to 105.5 and Diesel price decreased a little to €1.699,84. -
Transport capacity
Increased from last quarter, but looking at the year-on-year development it continues at a lower level. -
The spot rate index
At 115.25, remains lower than the contract rate index at 123.65, indicating a decrease in volume. The gap between spot and contract rates has been narrowing since August 2023, indicating a more balanced supply-and-demand environment.
Source: ti-insight -
A longer term look out on capacity
Continuously high interest rates are beginning to have significant impact on TCO (Total Cost of Operation). Hauliers who lease trucks are facing much higher leasing costs. With transport prices slightly decreasing, carriers are seeing reduced profits and less motivation to expand their operation, leading to potential capacity challenges, when the market rebounds.
Source: upply, trans.info
Volatile transport market and inflation impact
Supply chain disruptions
Supply chain disruptions have become common occurrences. Geopolitical tensions, local strikes, and extreme weather events, combined with challenging economic conditions and growing road taxes and legislations, resulting in a volatile transport market.
Supply chain resilience
Understanding chain vulnerabilities and potential failure points is crucial, necessitating the adaptation of disaster recovery, business continuity, and emergency plans. This includes the utilization of advanced technology and collaboration with logistics partners.
Road transport cost
The impact of inflation on road transport costs, is not only driven by fuel prices, which for the European Road transport market is additionally impacted by the conflict in Ukraine. Inflation also plays a role in the maintenance costs of trucks and equipment, as well as the insurance costs for cargo. The shortage of labor and drivers is leading to increased labor expenses. Although the inflation rate is lower, there may still be a delay in its effect on transport prices.
Sustainability: External Market Updates
EU regulations
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Heavy-duty vehicles
EU agrees on new CO2-standards for Heavy Duty Vehicle, with a mandate towards OEMs for reducing emissions from sold trucks by 45% in 2030 and 90% in 2040.
Source: europa.eu
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Greenwashing
New anti-greenwashing rules introduced by the EU to ensure that companies cannot falsely advertise solutions as sustainable or green without demonstrating a proven reduction in impact that exceeds what is generally available on the market.
Source: europe.eu
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Euro 7
A new Euro Class 7 standard has been agreed upon by the EU. This standard, which will come into effect for new HDVs (freight vehicles) by 2030, makes minimal changes from the previous Euro VI but sets stricter targets for pollutants, including brakes and tyre wear.
Source: europa.eu
The German government:
Cancels subsidies for electric trucks and other low- and zero-emission alternatives.
Source: reuters
Road taxes
1st Feb 2024:
France Road Tax: Increase of approx. 3% compared to rates from 2023. The rates depend on various local mechanisms, the entry and exit point of the vehicle and the class of the vehicle.
Greece Road Tax: An increase of 7,6 % is added to the tolls on the highways throughout Greece.
1st Mar 2024:
Czech Republic Road Tax: New toll component introduced that take into account CO2 emissions. Apply to trucks over 3.5 tonnes.
Italy New Road Tax System: On 1 March 2024, the ASTI CUNEO motorway (Piemont region, south of Turin) will expand its conventional closed toll system to include several FreeFlow toll beacons.
Sustainability: Driving change at DSV
Now and in the future
From decentralized testing to strategic decarbonization planning
Through close cooperation with manufacturers and our hauliers, DSV is testing potential low- and zero-emission technologies that can help decarbonize the industry. While some of these solutions is still maturing, technologies like battery electric vehicles is ready for deployment in certain scenarios and operations. BEV’s therefor plays a key role in decarbonizing our fleet in the upcoming years.
- Deploying more than 300 BEVs to our operations in 2024 and 2025.
- By 2030, we expect to have more than 2,000 BEVs in our operations as well other low- and zero-emission truck technologies, in addition to trucks using HVO fuel
- We expect at least 5,000 of our third-party trucks to operate at best –in-class (BIC) level by 2030
Battery Electric Vehicles (BEV)
About BEV
Technologies like battery electric vehicles are ready for deployment in certain scenarios and operations. BEV’s therefore play a key role in decarbonising our fleet in the coming years.
We are deploying +300 BEV’s to our operations in 2024 and 2025 in identified key markets.
Getting energy capacity
By 2030, we expect to have more than 2,000 BEVs in our operations. Access to charging infrastructure and the necessary grid connection sets the pace for how quickly we can put BEVs into operations. By establishing key countries for deployment, we can also focus our efforts on establishing the required infrastructure in coordination with DSV energy and 3rd party charging providers.
DSV Sustainability Impact Map
Explore our impact map to discover the range of initiatives supporting sustainability across our global operations.
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