Strong European road freight sector provides good news for economy
The road freight industry is critical to the economic development of the European region. Research which Ti undertook for its latest report – European Road Transport and Logistics 2011 – shows graphically the strength of this link.
As can be seen from the chart below, both economic activity in the EU (GDP) and road freight output hit the bottom of a trough in mid-2009. There was then a significant rebound for both indicators, followed by a period of stable, but low growth in 2010 and 2011.
Figure 1: Correlation between GDP growth and Road Freight output.
The correlation coefficient between the two sets of data is actually +0.85 which indicates a very strong positive relationship.
The road freight sector is often seen as a bell-weather for the wider economy. This means that the financial performance of road freight companies is important as a way of gauging the health of manufacturing and retailing sectors.
The chart below shows the revenue growth of many of the major companies in the first six months of 2011.
Figure 2: Year-on-Year organic revenue growth rates.
As can be seen, all the companies enjoyed very strong growth rates – mostly in the high single, low double digit range. Gefco showed the strongest performance out of this sample with the market leaders, DHL and DB Schenker, expanding their revenues by 12 and 12.5% respectively.
Many of these results will have been influenced by the stronger economic growth in northern Europe; Germany in particular. The figures may also represent the large companies taking market share from small and medium sized competitors, although there is little concrete evidence of this.
However, it can certainly be said that if indeed the road freight market is a forward indicator, the health of the European economy is in a better state than most people make it out to be.
About European Road Transport and Logistics 2011
Ti’s latest report contains analysis of the European road freight sector, analysing the link between economic growth and industry output. It also looks at the development of the main costs which impact upon operators. The report includes comprehensive market sizing and forecasts as well as a compendium of official statistics and maps.
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