Global Road Freight Industry Outlook

  • The global road freight market valued at $2.4 trillion in 2017, and it is forecast to grow at a CAGR of 4–5 percent in 2018, as the demand from end-user industries surges Y-o-Y
  • Regions such as Western Europe, North America, and Australia have a high buyer and supplier maturity due to advanced technology adoption 
  • Due to the increase in e-commerce and global trade, APAC and parts of Africa are expected to be the future growth-driving markets for road freight services

road-freight-services-market-size

Global Road Freight Industry Trends

  • Buyers are increasingly looking for end-to-end supply chain solutions from service providers 
  • Suppliers are enhancing themselves to meet the demands of the buyers by them giving value-added services in addition to transportation services 

Global Road Freight Drivers and Constraints

Drivers

Retail Sales:

  •  Retail sales will increase by 5–6 percent, which will in turn drive the demand for trucking 
  • Retail e-commerce is growing at 14–15 percent per annum, which will create new demand for logistics, particularly in metropolitan areas

Transport Infrastructure:

  • An efficient transport sector with advanced infrastructure is an important element of any economy, helping to stimulate development, thus cutting the lead time and costs of trucking

Global Trade Activity:

  • During the last decade, increased production of high-value and light-weight goods and expanded trade among the member countries results in increased road freight transportation

GDP: 

  • Because growth in GDP implies increased economic activity, there is a positive correlation between the development of freight transport and GDP, where any increase in GDP is directly related to the increase in road freight services in that region

Constraints

Fuel Rate

  • Fuel prices account for nearly 30–35 percent of trucking freight rates, thus having a major impact on pricing. Fuel prices, which have been low, are forecasted to increase in the second half of the year

Shortage of Drivers:

  • Driver wages account for nearly 30–35 percent of carriers’ operating costs. Driver wages are expected to increase due to the prevalent shortages in the industry, coupled with a strong demand for qualified drivers and the same trend is expected to continue in countries such as the US,UK and Western Europe.