UniCredit Bank Austria industry report on the freight transportation sector:
Road freight in Austria building strong momentum in 2021
- Road hauliers on course to completely offset last year's 1.9% loss in 2021
- Domestic transportation already up 9% as at Q3 2021
- Job vacancies well above pre-crisis levels as at autumn 2021
- Cross-border freight transportation market share losses increased in 2020
- Austria remains attractive as a logistics location regardless, ranking fourth globally
The transportation output of Austrian road hauliers, i.e. the volume of goods transported multiplied by the distance travelled, fell by 1.9% in 2020. The construction economy and the ecommerce boom prevented a sharper decline in demand for transportation. "Demand for transportation in 2021 will completely offset the loss from the previous year. The marked increase in demand has actually left transportation companies dealing with a lack of adequately qualified workers", says Günter Wolf, Economist at UniCredit Bank Austria. Job vacancies in the land transportation sector have been well above pre-crisis levels again since June 2021.
Freight transportation sector rapidly offsets last year's loss in 2021
The overall transportation output of Austrian road hauliers fell by 1.9% in 2020. Following a sharp decline in export demand, cross-border transportation experienced a particularly big fall of 9%, while domestic transportation output stagnated.
The fact that domestic transportation demand remained relatively stable compared to overall economic development, which fell by 6.7% in real terms in 2020, was due to the moderate production losses in the domestic construction economy and, primarily, the ecommerce boom. Both carriage of construction materials and groupage transportation delivered extremely positive growth contributions: Transportation output for construction materials was up 16%, with groupage transportation up by an impressive 57% (with a total freight transportation output of 26 billion tonne-kilometres for domestic companies on the road, these two segments each account for around 11%).
The macroeconomic environment in Austria is set to remain beneficial for the transportation sector in both 2021 and 2022, with economic growth rates averaging 5% and significant demand momentum coming from the industrial sector and from exports. Against this backdrop, there is scope for freight transportation output to recover rapidly in 2021 and potentially more than offset last year's loss. The transportation output of domestic road hauliers, including domestic routes for cross-border journeys, has already increased by around 9% in the first three quarters of the year (according to estimates from Statistics Austria).
Fleet investments among commercial hauliers is currently an economic indicator for the transportation sector. As at August 2021, the carriage sector reported having 7% more haulage vehicles in the over 3.5 tonnes category and 34% more new articulated vehicles for the first time. This trend is a clear indication of the economic upturn in road haulage, though it is due in part to a stronger decline in new registrations in 2020 and transportation companies are now making the delayed investments in their fleets.
The strong demand for transportation in 2021 also triggered a shortage of labour in the transportation economy. As such, the slight drop in employment figures for the road haulage sector of 2% as at September is probably driven less by the cautious capacity planning of companies and much more by the lack of appropriate labour. There is already talk within the freight transportation sector of a serious shortage of drivers, and this concern is backed up by the number of job vacancies in the land transportation sector. There have been openings for an average of 3300 workers in this sector since June 2021, which is considerably more than before the crisis (in 2019, an average of 2600 vacancies were advertised with AMS in the professional segment).
Cross-border freight transportation market shares losses in 2020
In 2020, Austria's hauliers fell behind their foreign competitors. Transportation output from and to Austria with haulage vehicles registered in Austria fell by 9% last year, while the figure for foreign-registered vehicles fell by only 2%. Domestic companies have also lost market share in domestic transportation. Transportation output stagnated in this segment, while foreign hauliers achieved an 11.5% increase in domestic haulage within Austria, i.e. in the context of cabotage trips.
Since 2008, the share of Austrian hauliers in cross-border road haulage has fallen from 38% to 15%. Most of this share has been lost to hauliers from the new EU member states, who recently accounted for some 71% of transportation output in this segment. A further 9% was lost to German hauliers. "Statistics suggest that Austrian companies are likely to experience significant output losses here. In reality, however, the trend in cross-border freight transportation is ultimately likely to be less dramatic, as at least a portion of the transportation will be carried out by vehicles registered abroad by domestic transport companies (flagged out) or handled by foreign subsidiaries of Austrian companies", says Wolf.
Austria now more attractive as logistics location
Although the demand for road haulage is set to lose momentum over the long term, slowed by increasingly saturated freight markets and, above all, the expansion of the railways in connection with climate policy, the prospects for the transportation economy are good. Austria is extremely competitive as a logistics location, due not only to its central location at the intersection of key European transportation routes but also to its remarkably good infrastructure.
Ranked against the logistics offerings of 160 countries worldwide, Austria has advanced from 22nd place in 2014 to 4th place in 2018 (in the "Logistics Performance Index" compiled by The World Bank based on company surveys about the quality of the logistics environment in the companies' core markets). The position improved across almost all the individual criteria, i.e. compared to the offering of international transportation options, the quality of logistics services, the timely and traceable order processing, the infrastructure and the efficiency of customs clearance of deliveries.
Germany has topped the rankings for years. Austria has only small deficits as a logistics location when compared to Germany, in terms of the time needed for customs clearance and the quality of ports and airports. The index also returns some remarkably positive results for Austria as a logistics location. Freight rates across all modes of transportation are lower than in Germany, for instance, and the quality of the road and rail infrastructure, the IT infrastructure and the services associated with freight transportation is better in both the private and public sectors.
Enquiries
UniCredit Bank Austria Economics & Market Analysis Austria
Günter Wolf, Tel.: +43 (0) 5 05 05-41954;
Email: guenter.wolf@unicreditgroup.at