Welcome to the 2nd 2024 Market Summary by Kukla Beverage Logistics, covering key developments across road, sea and rail freight and highlighting notable regional trends shaping logistics. This update provides insights into evolving market dynamics, including regulatory shifts, operational challenges and strategic adaptations in response to economic and geopolitical pressures.
Snapshot of Regional Market Trends
In 2024, Europe’s freight industry finds itself in a dynamic environment marked by labour shortages, regulatory advancements, and geopolitical tensions across road, rail, and sea freight sectors. The landscape is shaped by contrasting shifts: road freight continues to grapple with driver shortages and fluctuating spot and contract rates; rail freight is evolving with regulatory reforms aimed at improving capacity and efficiency; and sea freight faces record container volumes amid operational pressures and alliance restructurings. The following report dives deeper into the challenges and strategies that are defining each sector, reflecting a period of adaptation and resilience across global logistics.
Road Freight: Rate Variations and Labour Constraints
The Q2 2024 Ti, Upply & IRU European Road Freight Rate Development Benchmark reveals diverging trends in spot and contract rates. The contract rate index dropped by 1.3 points quarter-on-quarter, while the spot rate index rose by 3.5 points, marking a slight year-on-year increase in spot rates despite a drop in contract rates. These variations underline the sector’s vulnerability to immediate demand fluctuations, with rising driver shortages adding to cost pressures.
Labour constraints remain a critical concern, as IRU’s preliminary data suggests nearly half of European logistics companies foresee difficulty in recruiting drivers for 2024, posing risks to both operational resilience and cost stability. Digitalisation initiatives, such as Hungary’s implementation of e-CMR and Italy’s ratification of this digital consignment protocol, are part of the ongoing shift towards streamlining logistics through technology. These innovations are expected to reduce some operational inefficiencies, though labour shortages continue to strain overall supply chain continuity.
Rail Freight: Regulatory Reforms and Capacity Expansion
The European rail freight sector is undergoing substantial regulatory and infrastructural developments aimed at bolstering intermodal capacity and efficiency. The TRAN (Transport and Tourism Committee) proposals from the European Parliament seek to create a digital and international system for managing rail capacity across the Single European Railway Area. Although well-received, the reform proposals have been flagged for limited user consultation and oversight, underlining the need for robust stakeholder engagement.
Infrastructure investments are also driving expansion across key logistics hubs. Romania’s Port of Constanta, supported by a 750-million-lei rail connection project, and Spain’s 730-million-euro development at the Port of Barcelona are examples of Europe’s commitment to enhancing rail connectivity. In the UK, Southampton’s Solent Rail Terminal has made significant strides with its recent container handling success. DP World’s new midweek service between London Gateway and Southampton demonstrates a growing focus on reducing road congestion through increased rail capacity. Collectively, these efforts highlight rail’s potential to provide sustainable, efficient freight alternatives within an integrated logistics network.
Sea Freight: Record Volumes and Strategic Alliances Amidst Disruptions
Ocean freight has been both a growth area and a source of challenge in 2024, as record-breaking container volumes and alliance restructurings define the sector. From May to July, global container demand surged, reflecting a 7% year-on-year rise for the first half of the year.
According to Sea Intelligence, in August 2024, global schedule reliability improved to 52.8% and up to now, in 2024, it has stabilised within the 50-55% range.
However, operational pressures persist, notably due to the diversion of 360 ships (around 4.7 million TEU) via the Cape of Good Hope, a costly adjustment aimed at avoiding Houthi threats in the Red Sea. This diversion has reduced global containership capacity by approximately 7%, raising transit times and fuel costs while exacerbating port congestion.
Labour unrest further complicates ocean freight. The potential strikes in US East and Gulf Coast ports are not happening for now, while Germany also faces labour-related risks. Such disruptions threaten to redirect cargo, with the risk of widespread schedule delays.
Meanwhile, strategic shifts in key trade lane alliances are underway: the Maersk-MSC split in January 2025 and the Gemini Cooperation’s launch with Hapag-Lloyd will reconfigure East-West routes, offering diversified service options. (See Q1 report for details of the new shipping alliances https://kbl.kukla-spedition.com/q1-2024-report)
Trade Lanes and Equipment Overview
Reefers
In the reefer market, seasonal demand and increased exports—primarily driven by a 13% rise in Brazilian beef exports—are intensifying pressure on already limited container availability. As these challenges impact equipment access and transit reliability, shippers are urged to anticipate potential delays and proactively manage supply chain continuity.
South America
South America is experiencing equipment shortages that are impacting freight schedules. The increased export demand, particularly in Brazil, is further straining container availability, requiring shippers to prepare for delays and potential disruption in service.
South Africa
Weather-induced delays at South Africa’s Durban Port, compounded by ongoing port congestion and equipment issues, continue to affect schedule reliability. Extended transit times due to unpredictable weather and port congestion underscore the need for shippers to plan ahead as equipment shortages are projected to persist into 2025.
