Germany’s economy is still struggling to gain momentum, and the business climate in the transport industry continues to decline.
The latest Q3 market report, published by the European Association of Freight Forwarders International (Elvis) on 27 November, highlights that the current shortage of cargo space has not yet affected transport prices. It predicts that “prices will start to move in the coming weeks.” Without these adjustments, the rising trend of insolvencies in the industry may continue.
Bureaucratic hurdles, a lack of investment incentives, and widespread corporate pessimism exacerbate the situation. However, Elvis advises companies not to further reduce their vehicle fleets in anticipation of a seasonal autumn recovery.
Germany’s economic situation remains tense
This tension is particularly evident in the manufacturing sector. In September, the automotive industry saw a sharp output decline of 7.8% compared to August, while the chemical sector recorded a 4.3% decrease. Despite these challenges, transport companies remain optimistic, according to the association.
All three Ifo economic indicators for the road freight transport sector—business climate (4.1%), business situation (6.9%), and business expectations (1.1%)—showed an upward trend in October compared to September. The slight recovery is even more pronounced compared to the previous year: all three indicators have risen significantly since October 2023 (18.2%, 14.7%, and 22.5%, respectively). Sales expectations also improved by 4.4% compared to September 2024.
Hopes rest on the retail sector
As the year draws to a close, the retail sector is viewed as a key driver of potential growth. Retail sales increased by 1.2% in September 2024 compared to the previous month and by 3.8% compared to September 2023. Growth was especially strong in online and mail-order retail, which rose by 3.1% over August 2024 and by 17.9% over the same month last year.
“These figures indicate that the retail sector is maintaining a certain momentum despite the general economic stagnation in Germany,” said Nikolja Grabowski, CEO of Elvis AG.
However, the expected autumn recovery in the transport market failed to materialise at a significant scale. While the market saw some seasonal improvement, it remains insufficient to reverse the ongoing challenges. “Clear signals from policymakers are still needed,” Grabowski added.
Although the seasonal recovery is stronger than in the previous year, the baseline remains low. The German haulage industry has faced scarce volumes and volatile conditions for years, and 2024 offers no respite. Rising costs, shrinking capacity, and fluctuating demand continue to strain the sector.
Transport prices: a sword of Damocles for hauliers
Elvis warns that “transport prices are increasingly becoming a boomerang for the logistics industry.” Companies have been reducing cargo space for months due to rising costs, leading to a significant shortage in the market.
Experts estimate that vehicle fleets in Germany have already shrunk by 5–10%. Meanwhile, administrative expenses, insurance, and personnel costs are set to rise sharply at the start of the year, adding further cost pressure. So far, these increases have not been adequately reflected in transport prices.
“The current price situation is a sword of Damocles for haulage companies,” Grabowski warned. “Unless prices are adjusted, there is a risk of insolvencies—and with it, a further reduction in cargo space.”
A non-representative survey conducted by Elvis in November underscores the issue: German freight carriers are currently adding an average of 10.3 cents per kilometre in pure truck transport costs. These costs exceed market prices. Furthermore, almost one-third of the surveyed hauliers reported a deterioration in their business expectations for the coming weeks.