Road Freight Transportation Market - Global Industry Analysis, Growth, Key Trends, Regional Assessment, and Forecast 2020 - 2030
Road freight is the transport of cargo used for small shipments over short distances. Road freight is often necessary in the beginning and end of multi modal transport chain. Prevalence of road freight in logistics globally is one of the key growth prospects of the market. As road freight transportation is cost effective, helps in short delivery time and also possibility of taking the most convenient route. Road transport is the dominant mode of domestic transportation in Sweden with almost 90% of goods transported through roadways. Road freight being the only mode involved in many door to door to freight chains constitutes to all the road transportation.
Due to covid-19 impact, there were road capacity declines and increase in prices. In 2020, capacity was down in almost every country, from Europe to America, or from Asia to Europe.
Growth of Digitalisation in Road Freight Transport
Introduction of Artificial Intelligence, digitalisation and automation can be helpful in improving efficiency, reduce costs, and increase service levels in the road freight transport. With digitalisation, Cooperative Intelligent Transport Systems (C-ITS) can be beneficial in improving traffic flow, reduce fuel costs, and also increase the efficiency in transport system. Furthermore, benefits of automated driving, and automated trucks is also expected to provide significant impact on freight transport business models. With IoT and artificial intelligence, all vehicles are expected to be connected and become increasingly automated, therefore, making the sector grow in many ways.
What are the Benefits of Electric Road Freight Fleet?
Electric vehicle technology is another factor providing benefits to the freight vehicles by reducing carbon emissions, noise, air pollution, etc. With the help of battery electric vehicles, emission of polluted air, GHG reduces if the electricity production is not carbon intensive. Technological advancements in electric vehicles are helping electric heavy duty trucks viable due to decreased life cycle cost of heavy duty trucks. With environmental benefits, and due to lack of emissions, improvement in public and driver health, electric vehicles have been growing in the market. Consideration of weight, charging infrastructures or speed of charging and lifecycle, and more technological advancements during the forecast period may lead to increase the road freight market among electric vehicles.
Environmental Pollution and Congestion may disrupt the Growth
Road freight transportation leads to significant emissions and congestion. According to MDPI, transport emissions accounts for 23% out of total CO2 emissions in European Union where road transport accounts for 70% and heavy duty vehicles account for over 25% of CO2 emissions from road transportation in Europe. With urbanisation, pollution level has gone up. According to Central Pollution Control Board the air pollution shares of transport have rise from 20% to 70% in last our decades, which is alarming. Road transport has been the back bone in many countries, but with increasing pollution, increasing fuel prices, the demand seems to decline. Although, investments in electric vehicles are increase which can prove a good and sustainable alternative to road freight transportation market.
Prominent players in the market are DB Schenker, FM Logistic, Gondrand Group, Ital Logistics Ltd., KLG Europe, DSV A/S, Alkom Trans SIA, Manhattan Associates, CTSI-Global, Accenture PLC, JDA Software, DHL Global Forwarding, CJ Logistics, GEODIS, Cargo Carriers Ltd., Nippon Express, TNT Express, Kerry Logistics Network, etc.
SAP SE integrated its InstaFreight’s service offerings with SAP Logistics Business Network for fast and efficient handling of road shipments in Europe in May 2020. Collaboration with InstaFreight, SAP provides its customers access to vast and growing truck carrier network for road transportation. This digital process reduces complexity in managing relationships with transportation service providers and also it can reduce their administrative effort.
There has been research by government and companies in Netherlands for hyperloop as a solution for freight transport in the country. Hyperloop can be game changer for transportation just like container. Hyperloop technology allows delivery faster at higher capacity and at lower cost. Hyperloop Development Program is a joint public private partnership made for the development of Hyperloop and was announced in late 2020. Dutch government is financially supporting it and focussing on developing the hyperloop as a new sustainable mode of transportation for both freight and passengers.
In November 2020, FM Logistic have got a contract from One Mount Group’s subsidiary VinShop for providing warehousing and order fulfilment services. The services support VinShop’s new online market places, VinShop and VinID. In the agreement, FM logistic will be using its new warehouse and distribution centre at Bac Ninh, near Hanoi which was inaugurated in May 2020. The centre will handle fast moving consumer goods, such as, drinks, personal care products, ambient food, etc. VinShop, an online service aims to support small stores become better through better sourcing, technology and supply chain management.
North America is expected to hold a dominant share in the market during the forecast period as almost 70% of the freight movements is done by trucks. Growing trade activities due to consumer demand, technological advancements, investments in road infrastructure development are expected to be the key growth prospects. Bureau of Transportation reports by 2045, US may account for 14.839 billion tons of total freight movement through trucks. Other than that adoption of cloud based platforms for trucking such as autonomous vehicles with Advanced Driver Assistance System which may help in reducing the fuel consumption is another factor for the market growth. Moreover, low taxes by US government are expected to have significant contribution in scaling the market.
In Europe, growth of e-commerce industry is expected to be the major driving factor for the market. With the prompt growth of internet and smart phones, and covid-19 pandemic around, the shopping through online has become prevalent accounting for 71% of internet users in 2020. Other than that, due to China’s Belt and Road Project implementation, China to Europe road freight transport capacity is increasing therefore growing the market for road freight transportation. Growth in intermodal transportation has led to the significant growth in road freight transportation. All these factors are anticipated to grow the road freight transportation at a significant CAGR during the forecast period.
Increasing logistics in Asian countries, growing automotive industry in China, India and Japan can be the growing factors for road freight transportation industry. Changing eating and consumption patterns among people have been the driving factor. Additionally, growing cold chain industry in India as the country is the largest producer of milk and one of the largest producers of fruits and vegetables requiring transportation eventually growing the market for road freight transportation.
Based on Solutions
Based on Services
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Key Questions Answered
DB Schenker, FM Logistic, Gondrand Group, Ital Logistics Ltd., KLG Europe, DSV A/S, Alkom Trans SIA, Manhattan Associates, CTSI-Global, Accenture PLC, etc.
Automation, consumer and retail, and pharmaceuticals.
Business services, managed services, and system integrators.
Roadways and sea ways are prevalent for transportation of goods.
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