There are signs of improvement in Germany’s haulage sector

In its latest market report, the European Load Association of International Freight Forwarders (ELVIS) AG states that an economic recovery is on the horizon. However, this positive development could also bring dangers. During the winter, an oversupply of freight space coupled with falling sales expectations sparked fleet reductions, resulting in reduced capacity on the market.

In addition to this, the growing number of customer tenders is increasing pressure on freight forwarders in the contract business. Moreover, is also difficult to foresee the extent of the market impact of July's truck toll changes in Germany, which will see vehicles weighing 3.5 tonnes or more being charged. Nevertheless, according to a non-representative survey among ELVIS freight forwarders, companies' expectations have brightened regarding the second half of the year.

"After many months of negative news, it is pleasing to see that the downward trend has stopped and key figures in the transport sector are rising. The seasonal spring revival is showing its first positive effects. How sustainable these will be will become clear after the holidays in May," says Nikolja Grabowski, CEO of ELVIS AG.

However, according to ELVIS AG, the situation for freight forwarders remains tense. "Unfortunately, the forecasts from the turn of the year have come true. Increasing customer tenders are increasing the pressure on freight forwarders," adds Grabowski.

Have things finally turned around?

There also signs of improvement when it comes to industrial production in Germany.

Upturns have been observed in Germany's chemical, mechanical engineering, motor vehicle and components sectors. The mood among companies has also improved. The ifo Business Climate index is up 1.7%, while ifo Business Expectations was 2.5% in April compared to March, the institute confirmed during its latest report.

"This development shows that the trough has been passed. Although the values are still behind those of the previous year, the trend is positive," says Grabowski. The "transport of goods by road" is also slowly gaining momentum.

The ifo Business Climate Index (+15.2%) and the ifo Business Situation Index (+5.3%) have recovered compared to March 2024. In addition, according to the Ifo Economic Outlook Index, sales expectations for freight transport by road have increased by a whopping 23.5% compared to March 2024. "There are increasing signs of economic recovery in Germany.

As usual, the spring upswing will subside in the coming weeks. Further overall economic development will show what level the summer will settle at," adds Grabowski. Inflation in Germany is slowly falling and is now stable between 2-3%.

At the same time, wages in the transport and logistics sector have increased. However, the extension of Germany's road toll to vehicles weighing 3.5 tonnes or more could thwart the recovery. The exact consequences are difficult to predict, but the market report expects some disruption due to the limited availability of toll boxes.

Looking ahead to the end of 2024 and into 2025

Germany's Federal Office for Logistics and Mobility expects that transport activities will develop more favourably this year than last year.

According to the medium-term winter 2023/24 forecast published in March, prepared by Intraplan on behalf of BALM, freight traffic recorded a decline in 2023 of 4.9%, with transport intensity (ratio of transport performance to GDP) falling sharply, which was due to weak foreign trade and declines in transport-intensive areas. In road freight transport, the volume fell by -6.2% and the output fell by -4.7%. For 2024, experts expect extremely limited growth, both for GDP and for freight transport.

Foreign trade, but also some bulk goods, will once again prove to be an obstacle. According to the forecast, higher toll rates will not have a significant impact on truck transport demand, unlike the slight decline in construction and industrial production expected by experts. Overall, BALM expects an increase of 0.8% (volume) and 0.3% (output) for road freight transport.

For the period from 2025 to 2027, however, experts expect more dynamism and an increase in transport intensity of 0.8%. Road freight transport is also expected to pick up speed with an increase of 1.1% (volume) and 1.9% (output). Furthermore, the experts estimate that the trend of increasing market share of foreign trucks (in traffic with foreign countries) could solidify and could even be further encouraged in the future by the driver shortage, which is higher in Germany than in some Eastern European countries, as well as increased costs for domestic companies in Germany.