Recent data reveal that EU road freight transport has seen a decline for shorter distances, particularly routes under 300 kilometers, between 2022 and 2023. While long-haul transport has maintained steady performance, regional freight has been impacted, with sectors such as construction materials and metals seeing a decline in shorter-distance shipments. These trends highlight a shift in the demand for regional versus long-haul transport, impacting industries that rely on shorter routes.

In this article, we’ll explore the factors driving the decline in short-haul road freight, the implications for key sectors, and the adaptations logistics companies can make to manage these changing demands.

Overview of Recent Road Freight Trends in the EU

1.1 Decline in Shorter Distance Road Freight

The decline in short-distance freight transport across Europe highlights a shift in how goods are being moved regionally. According to recent data:

• Decreased Freight Volumes for Routes Under 300 Kilometers:

  • Freight volumes have fallen on routes under 300 kilometers, signaling a shift in demand for regional transport. This drop has raised questions about what factors are influencing the demand for short-haul routes.

• Sectors Heavily Affected by the Decline:

  • Industries like construction and metals, which rely heavily on short-haul deliveries, are experiencing the greatest impact. For these sectors, timely delivery of heavy or bulk materials within short distances is critical to maintaining project timelines and production cycles.

1.2 Resilience of Long-Distance Freight

In contrast to the decline in regional transport, long-haul freight remains resilient across the EU:

• Stable Volumes for Long-Haul Transport:

  • Long-haul routes over 300 kilometers have maintained steady performance, indicating that demand for transporting goods over longer distances remains consistent despite economic shifts.

• Implications for Supply Chain and Resource Allocation:

  • This divergence between short- and long-distance routes presents challenges for supply chain managers, who must rethink resource allocation and planning to accommodate the changes in demand for regional versus long-haul transport.

Key Factors Contributing to the Decline in Shorter Distance Freight

2.1 Shifts in Regional Demand and Economic Conditions

Regional economic shifts and changes in consumer and production patterns have influenced the demand for short-haul freight.

• Regional Economic Fluctuations:

  • Economic changes across specific regions have led to reduced demand for certain goods, impacting the need for short-haul logistics. The construction sector, for instance, has been affected by slowed growth and fluctuating raw material demands in various regions.

• Changing Consumer and Production Patterns:

  • Evolving consumer habits and shifts in production have led to a reduction in demand for frequent short-distance deliveries, as companies prioritize bulk shipping and optimized transport schedules to reduce costs.

2.2 Rising Fuel and Operational Costs

The rising costs of fuel and operations have disproportionately impacted short-haul routes, making them less economically viable for logistics providers.

• Fuel Price Impact on Short-Haul Profit Margins:

  • Rising fuel prices place a heavier burden on short-haul routes, as lower load efficiency and frequent stops make it harder to balance costs with profits.

• Higher Operational Costs for Short Routes:

  • Operational costs, including labor, maintenance, and tolls, are more difficult to spread out over shorter distances, putting pressure on logistics companies to reconsider their short-haul offerings.

2.3 Increased Competition from Alternative Transport Modes

Competition from alternative transport modes, particularly rail and intermodal solutions, has intensified for shorter distances.

• Rail and Intermodal Options for Shorter Distances:

  • Rail and intermodal transport offer cost-effective alternatives to road freight, especially for bulk materials and non-perishable goods, leading some companies to transition their short-haul operations to these modes.

• Sustainability Goals Driving Modal Shifts:

  • Companies with sustainability targets are increasingly exploring modes other than road freight for shorter distances, as rail and intermodal options tend to have a lower carbon footprint.

Implications for Affected Sectors

3.1 Impact on the Construction and Metals Industries

For sectors like construction and metals, the decline in short-haul freight is presenting significant challenges, including increased costs and potential delays.

• Increased Transportation Costs and Delays:

  • The reduced availability of short-haul freight options is leading to increased transportation costs and delays, especially for construction materials, which need to be delivered on time to meet project schedules.

• Supply Chain Disruptions and Adaptation Strategies:

  • For the metals industry, which relies on short-haul transport for regional delivery and manufacturing needs, the decline in available road freight is forcing companies to adapt their supply chain strategies to prevent disruptions.

3.2 Effects on Logistics and Freight Companies

The shift away from short-haul demand is also pushing logistics companies to rethink their strategies and operations.

• Shifts in Fleet Allocation and Route Planning:

  • Logistics providers are reallocating resources from short-haul to long-haul routes, requiring adjustments to fleet management and operational planning to focus on areas of consistent demand.

• Pressure to Improve Efficiency and Cost Management:

  • To mitigate the impact of decreased short-haul demand, logistics companies are streamlining their operations and implementing efficiency measures to remain profitable despite reduced volume.

Adapting to the Decline in Shorter Distance Freight

4.1 Exploring Alternative Transport Modes

With the decline in demand for short-haul road freight, logistics companies are increasingly considering alternative transport modes to maintain regional coverage.

• Expanding Use of Rail and Intermodal Solutions:

  • Rail and intermodal solutions offer reliable alternatives, particularly for industries with consistent short-haul needs. By combining these with traditional road transport, logistics companies can reduce costs and improve service reliability.

• Combining Short-Haul with Sustainable Delivery Models:

  • Integrating electric vehicles or other green transport solutions for short-distance deliveries can help logistics companies reduce costs while meeting sustainability goals, especially in urban and suburban areas.

4.2 Strategic Route Optimization and Load Maximization

Optimizing routes and maximizing load efficiency are key strategies for maintaining profitability in short-haul freight.

• Optimizing Routes to Reduce Costs:

  • Implementing route optimization tools can help companies improve efficiency by minimizing empty miles, reducing fuel consumption, and avoiding congestion.

• Maximizing Load Efficiency for Shorter Routes:

  • Logistics providers are focusing on maximizing loads for each trip to reduce the per-unit cost of transportation, allowing them to offer competitive pricing even for shorter routes.

4.3 Investing in Data and Technology for Dynamic Demand

Data analytics and digital tools enable logistics companies to respond to shifting demand and manage costs effectively.

• Using Data Analytics for Demand Forecasting:

  • Advanced data analytics help logistics companies predict fluctuations in demand, particularly for regional routes, allowing them to adjust services in real-time to meet client needs.

• Digital Tools for Real-Time Route Adjustments:

  • Digital tools enable real-time tracking and route adjustments, allowing logistics providers to respond quickly to changes in demand or unexpected disruptions, improving service reliability.

Conclusion

The decline in shorter-distance EU road freight is a result of shifting regional demand, rising costs, and competition from alternative transport modes. For industries such as construction and metals, adapting to these changes is essential to maintain supply chain continuity. By exploring alternative modes, optimizing routes, and leveraging data-driven solutions, logistics companies can manage these shifts effectively, meeting client needs while remaining cost-competitive.

Key Takeaways:

• Shorter-distance road freight in the EU has declined due to economic shifts, rising costs, and competition from alternative transport modes.

• Sectors such as construction and metals face challenges in maintaining supply chain continuity and controlling costs amid these changes.

• Logistics companies should explore alternative modes, optimize routes, and invest in data-driven solutions to adapt to shifting short-haul demand.

Are you experiencing changes in short-haul freight demand? Share your strategies and insights on adapting to these shifting dynamics below.