2022 transport industry overview and 2023 forecasts

2022 transport industry overview and 2023 forecasts

After an incredibly intense 2022, many of us are hoping that this year will be better and will allow us to recover after an extremely stressful period. However, according to experts, we will still have to wait a bit for good times to come - in 2023 reduced consumption, inflation and the energy crisis will continue to have negative consequences for the EU economy. It is predicted that this year the European transport market will slow down and the sector will grow by only 1.1%.1 Therefore, in this article, we review 2022 and discuss what we can expect this year.

2022 was a difficult year for the European transport industry. Inflation, and especially the rise in fuel prices, became the biggest obstacle. Due to the rising prices of energy and other products, transport companies faced extremely high production costs - the insurance prices for truck increased by 7.4%, the prices of new vehicles increased by 10.4%, and those of used vehicles - by 6.6%.2 Between June 2022 and June 2021 fuel prices pretty much doubled. Such conditions made the activities of transport companies, especially haulers, extremely difficult - it became not only hard to cover the costs but also to maintain a high quality of services. Although fuel prices are lower than they were in 2022, this does not mean that the situation is particularly good. The ongoing war in Ukraine means that fuel prices will continue to remain relatively high. For example, if we consider the expenses of transport companies operating in Eastern Europe, this year 50% of all production costs are spent on diesel while in 2022 this figure was 40%.3 This is extremely important because inflation - the rise in the general price level - complicates the operations of transport companies. It is becoming more and more difficult for carriers to cover rising costs, so they often have to raise their service prices. However, the clients of transport companies are also facing rising production costs, as the prices of various products are on the rise. In this case, it becomes extremely difficult for clients to cover the rising transportation costs - they may decide to stop purchasing these services, change suppliers or reduce their production volume and use transport services less. When such a situation arises, hauler companies are forced to work on a smaller scale, reduce their costs by laying off workers, or, in the worst case, close the company. Therefore, as the prices of products, and especially fuel, continue to rise, the forecasts for 2023 do not look very good.

Due to rising costs, the prices of transport services in 2022 reached new heights this summer.4 This was also caused by the growth of wages in the transport sector - many transport companies have significantly increased the salaries of their employees over the past year, but now this is damaging the businesses as companies have to face extremely high production costs. The EU Mobility package has also contributed to the rising costs, making it even harder for companies to operate successfully.5 The consumption levels have decreased significantly due to the poor economic situation and this is important.6 The transport sector is extremely dependent on ordinary consumers - if people buy less goods, the companies that produce them reduce their production scale, so transport companies have less products to transport and earn less profit. We have already noticed this effect in the maritime transport sector - the amount of cargo decreased greatly in 2022, so in 2023 it is predicted that the company's profit will be the lowest in the last three years.

In 2022 the energy crisis also had a significant impact on the economy, which greatly contributed to the rise in prices and negatively affected transport companies. However, experts predict that this and the upcoming couple of years will also be marked by the energy crisis.7,8  The rising prices of electricity and gas greatly hinder the smooth operation of factories. As mentioned earlier, the transport sector is highly dependent on industrial companies. As electricity and gas prices rise, factories can shut down, which means transport companies will lose a lot of profit because they will have nothing to transport. In this case, there is a risk that some companies will start working on a smaller scale, start laying off employees, or simply close down. Therefore, the energy crisis will have a strong impact on the economy, and especially on the transport industry in the upcoming years.9 

It is also important to note that the problem of driver shortage became even bigger in 2022 when Europe lost thousands of workers from Ukraine and Belarus. A total of 425,000 drivers are missing in Europe.10 Although this problem is not yet solved, many countries are looking for a solution outside of the EU borders. in 2022 in Lithuania, 80% of all work permits intended for citizens of third countries went to truck drivers.11 EU countries are actively looking for solutions abroad and it seems that this trend will continue this year as well. For example, this year Spain will attempt to solve the truck driver shortage by hiring workers from Morocco.12 So while this problem is not yet fully resolved, all countries are taking the necessary steps to fill the driver shortage.

Although the economic situation may seem better than it was in 2022, do not be fooled - the war in Ukraine, inflation and the energy crisis will have a significant negative impact on the European economy and the transport industry this year as well. Experts predict that the European transport industry will grow very little in 2023. The industrial sector will be weak, the consumption of goods will decrease, and the prices of fuel and other essential goods will continue to rise – all of this will affect countries such as Italy and Germany the harshest. Therefore, in 2023 it is still recommended to not expect a particularly good economic situation, as it will be difficult to recover from a very stressful year.

2023  transport industry predictions

Keywords: work for drivers, work for truck drivers, year overview, forecasts, transport sector, transport industry, inflation

3) https://market-insights.upply.com/en/the-outlook-for-european-road-transport-in-2023