Transportation and Logistics Industry Trends July 2024

Global transportation and logistics: The ongoing rebound in Europe should support sector growth

• We expect global transport and logistics output to increase by 3.8% in 2024 and 4.0% in 2025. The sector should benefit from higher worldwide industrial production and consumer demand and a recovery in Europe.
• Oil and fuel prices have decreased again after a brief surge in early 2024, which should ease cost pressures for businesses in the sector.
• Impact of the Red Sea Crisis: While freight rates will remain elevated in the coming months, price pressures should decrease somewhat due to added capacity in the form of new ships.

USA: Robust private consumption drives transport growth

• We expect the US transportation and logistics industry to grow by 2.7% in 2024 and by 2.0% in 2025.

• Private consumption in the US remains robust, supporting demand for shipping of durable and non-durable consumer goods. Containers heading to US ports are increasing after a rather disappointing 2023.

• Compared to Europe, overseas trade with the US is less vulnerable to shipping disruptions in the Red Sea.

• Government investment in infrastructure improvement will benefit the sector by promoting greater supply chain efficiency, reducing costs,

China: Healthy sector growth outlook over the coming years

• Chinese transportation and logistics output is forecast to grow by 4.8% in 2024 and by 5.4% in 2025. After a weak 2023, imports and exports of goods are trending upwards.

• We expect the sector will benefit from government support for businesses and investment in infrastructure in the coming years.

• The ongoing expansion of ecommerce is likely lead to increasing demand for courier and storage facilities.

India: Growing household spending supports a robust sector performance

• Indian transportation and logistics output is forecast to grow by 12% in 2024 and by 7.4% in 2025.

• India's growing middle class is spurring demand for consumer goods, supporting land, sea and air transport.

• However, more investment in transport infrastructure is required to overcome existing inefficiencies and bottlenecks.

Japan: Export growth supports all main transport segments

• We expect Japan´s transportation and logistics output to grow by 5.9% in 2024 and by 2.3% in 2025.

• Industrial production is set to recover after a major slump in Q1 of 2024, and export growth will continue in the coming 18 months. This will support freight transport demand on land, water and in the air.

Eurozone: A rebound on the horizon for transportation and logistics

• We expect transportation and logistics output in the Eurozone to grow by just 0.6% in 2024, followed by an acceleration of 2.7% in 2025.

• The economic recovery in the Eurozone should gain momentum in the coming months, with private consumption and retail sales recovering. The currently ongoing normalisation of export growth is expected to continue.

Germany: Only a modest recovery of the sector expected in 2025

• In Germany, we expect transport and logistics output to contract by 1.3% in 2024, due to stagnating economic growth and an industrial production decline.

• We expect the German economy to start to rebound towards the end of the year. This should lead to a transport and logistics sector rebound, albeit modest at 1.1%.

United Kingdom: Business sentiment in the sector still weak

• Headwinds from tight fiscal policy and past interest rate hikes weigh on domestic demand in the UK. This corresponds with a weak business sentiment among British transport and logistics businesses, both in the freight and passenger segments.

• The sector has to cope with ongoing staff shortages and loss of cabotage rights in the EU, which are both likely to limit sector activity.