DB Schenker business unit
Development in relevant
The European land transport market continues to be characterized by strong demand coupled with extreme price developments. These are driven in particular by rising diesel prices (due to the war in Ukraine, among other things) and the implementation of the EU mobility package.
Demand for land transport in North America was robust last year. Both LTL (less than truck load) and FTL (full truck load) freight forwarders achieved record results as they were able to optimize their networks and control prices. Fuel costs increased significantly, leading to an increase in operating costs, but these are largely passed on to customers. Over the last three months spot market prices have decreased, but prices for customer contracts have remained stable. Volume in South America was less affected, and is generally driven by port activity and fluctuating demand.
The market for international truck transport in Asia has been noticeably affected by the partial to full border closures in China due to the zero-Covid strategy in the second half of 2021 and in 2022. Due to the uncertainties in cross-border truck transport, customers switched to ocean freight for shipments within Asia or tested the newly opened train
corridors between China and Laos/Vietnam.
During the same period, national transport within Asian countries saw a recovery and robust growth after the Covid-19 pandemic waves subsided.
The market for international rail transport between Asia and Europe experienced a great boom from May 2021 until the end of 2021, driven mainly by the development in ocean freight with a lack of ship capacity. The high volume led to train network congestion in Europe and on China’s borders in the second half of 2021. Since the start of the war in Ukraine, the market has suffered severely from a drop in volume, primarily from Western customers.
The global air freight market made a solid start to 2022, growing by 4.8% in the first quarter. Quarterly growth therefore slowed for the third time in a row.
In terms of capacity, the market continues to see recovery effects from a gradual return of passenger transport, but these have been accompanied by sanctions against Russian airlines and associated capacity restrictions in the wake of the war in Ukraine. As a result, air freight rates remained at a consistently high level and significantly above their historical averages.
Weaker macroeconomic development, sustained port congestion, the war in Ukraine, and China’s adherence to its zero-Covid-19 strategy are the main reasons why supply chains are not expected to recover in a timely manner and have impacted the development of the ocean freight market in the first half of 2022. Freight rates remained at a consistently high level.
Global contract logistics started 2022 with the wind in its tail. The main drivers are the e-commerce, healthcare and electronics verticals across all regions, while the automotive sector has so far shown hardly any signs of recovery due to supply bottlenecks, especially in the case of semiconductor goods. Risks include the supply of raw materials from Russia, high cost inflation and increasing uncertainty among end consumers.