European road freight survey highlights turnover and volume decline

Transporeon survey of 1,200 agents finds three quarters of firms experiencing a decline in transport volumes due to COVID-19 and almost four in ten anticipating full year sales declines – six times the number that had forecast declining sales in last year’s survey.

The COVID-19 crisis and its consequences have, unsurprisingly, considerably dampened the mood among European road freight forwarders, with the 2020 European Road Transportation Survey by German cloud-based logistics software provider Transporeon finding most firms experiencing a decline in transport volumes and almost four in ten anticipating sales declines this full year.

The glum outlook is reflected in forwarders’ sales expectations for 2020, its findings show. Only 32% of the more than 1,200 European freight forwarders companies surveyed still expect to increase their turnover in 2020, compared with 74% in 2019. And this year, 38% even assume that sales will decline. Compared to the previous year, when only 6% expected a decline in sales, this is an increase of more than 30 percentage points – a more than sixfold rise.

In 2019, only 10% of the companies recorded declining revenues, whereas more than three quarters of the firms surveyed are currently experiencing a decline in transport volumes due to COVID-19.

European freight forwarders of all sizes took part in the annual survey this year, with over half primarily active in the consumer goods sector. Almost 50% of the participants operated in the paper, automotive and food industries while just over 6% were particularly focused on the oil and gas industry.

The uncertainty caused by the current crisis can also be seen in the significant increase in the number of participants who are unable to make a clear statement about the expected development of sales, the survey noted.

“The actual extent of the losses at the end of the year will depend on how quickly the economy recovers from the restrictions of recent months, whether new waves of infection can be contained, and the shutdown measures further eased,” the report highlighted.

Automotive hit hard

A look at the verticals shows that the automotive industry in particular has been hit hard. Only 21% of participants operating in this sector continue to expect sales growth.

Freight forwarders active in the construction materials industry also expect declining sales figures. Only 25% of those surveyed anticipate growth in 2020. In comparison, 63% recorded sales growth in 2019.

Current events have also changed the assessment of freight forwarders with regard to the most relevant factors influencing the transport market, the survey highlighted.

“COVID-19 and the current economic situation will dominate the daily life of freight forwarders in 2020, while the shortage of drivers and the developments in commodity prices, which were the determining factors in the years 2017-2019, will move into the background this year,” it noted.

77% experiencing a decline

About 77% of the companies surveyed are experiencing a decline in transport volumes due to COVID-19, which is obviously having an impact on transport capacity.

Almost 30% of the forwarders surveyed currently see more available (road) capacity on the market due to the health crisis. Reacting to this development, only 28% of forwarders plan to increase their transport capacity in 2020. Last year, the figure was 46%.

Transporeon’s Transport Market Monitor published last month, in association with its subsidiary Tim Consult, revealed that European available road freight capacity on the spot market hit record levels in April and May to the backdrop of COVID-19, although June brought some relief in the supply-demand imbalance. As for prices, levels declined sharply from April as the impact of the pandemic kicked in, dragging down volumes and available capacity increased significantly, it noted.

Source: lloyd’s