Across Europe, the topic of conversation has centred around the trucking industry. Over the past year, we've been operating in a complicated environment due to dramatic changes in the market. These changes began in 2017, with a seasonal shortage of trucks. At first, this was nothing out of the ordinary but went on to show a more structural problem within the industry. The effects have been widespread across the relevant sectors.
Getting to grips with the trucking industry
In Europe, the road freight business still represents a large section of the logistics market. Trucks transport approximately 75% of all cargo, even with other means in development. But at the moment, there is no increase in rail or barge freight to compensate for the sudden increase in cargo movement. On top of this, we've experienced a very hot summer, bringing further problems to a sector already under pressure. In 2018, everywhere noted record temperatures, causing a few countries to declare a state of emergency. Crops have suffered, and river levels have dropped exceedingly low.
But, how has this affected the trucking industry? With some countries in a state of emergency and the effect the heat and low water levels have had on the yield of crops, most grains now need to be imported from outside the EU through the ports and then transported to their destination. All this puts even more strain on an industry already feeling pressure. While most of us have enjoyed ten years of stable prices with little or no fluctuations, this has now ended. According to research, prices rose by 14% in the fourth quarter of 2017. On top of that, we are dealing with driver shortages, rising tolls and increasing regulatory requirements from different European countries.
What do we expect for 2019?
In a few simple words, we do not expect the situation to improve. Germany has already announced up to 60% increase in tolls from January 2019. There are new regulations prohibiting drivers from spending weekends in gas stations, instead insisting they find proper accommodations. The driver shortage will continue as the Eastern European economies that were providing most of the workforce are improving. Instead of driving around, people are finding it easier to get good paying jobs closer to home. Some of the big trucking companies are now looking for drivers in South East Asia. Similar to a few years back, we foresee the current situation starting a new wave of mergers and acquisitions.
Access World’s solution
It has never been in our DNA to sit back and accept a situation as it is. We like to get out there and find solutions. That's why we are re-designing our logistics department and beefing it up with experienced staff. Now more than ever, we're focusing our attention on road transportation and innovation. We also plan on exploring multimodal research of new possibilities for combining import and export to find synergies. A better service and control will enable us to step up the game and provide further improved tailor-made solutions.
Are you looking for a reliable logistics service provider to transport your goods? We offer global, world-class solutions across a wide commodity base. Contact us for a quote tailored to your business.