Market Analysis of ELVIS AG with Pessimistic Forecast

The European Freight Alliance of International Forwarders (ELVIS) AG sees the transport and logistics industry facing immense challenges. According to analyses by the association, numerous indicators point to an impending crisis. The outlook for the coming months has deteriorated, not least due to high inflation. Against this backdrop, the alliance advises primarily small and medium-sized enterprises in the industry to exercise extreme caution in long-term investment decisions.

(Alzenau) “The German economy, along with the truck transport sector, stands at a crossroads. The indicators are currently clearly pointing towards a recession,” says Nikolja Grabowski, CEO of ELVIS AG. This development hits the industry, characterized by small and medium-sized enterprises, at an inopportune time. The financial situation of many companies has significantly worsened in recent years, not least due to the pandemic and its consequences. “In this situation, high inflation weighs even heavier,” says Grabowski. Moreover, costs are rising simultaneously. The main drivers are personnel costs. Due to the tight supply of skilled workers and the high competition for them, wages and salaries are increasing. “This further strains the already often thin margins in the transport sector,” says the ELVIS board member.

The alliance, based in Alzenau, continuously records all relevant parameters of the truck transport market in the area of full truck loads (FTL) and less than truck loads (LTL). As part of a quarterly analysis, these are related to general economic data and important key figures such as the Ifo Business Climate or revenue in online and mail-order trade. From this data-driven perspective, Grabowski and his team derive trends for the industry.

These do not promise anything good for the coming months. “The forecasts are clearly pessimistic,” says Grabowski. “The general uncertainty in the economy and society negatively affects consumption and investment behavior. As a result, transport demand is declining.” Personnel and material shortages continue to negatively impact transport supply. Only due to the current sideways movement of the economy do these problems not manifest more openly.

Therefore, the alliance advises forwarders and carriers to particularly reconsider decisions regarding long-term investments and, if possible, to postpone them. Instead, transport companies should urgently increase their options for capacity flexibility: digitization of the entire workflow and an improvement in efficiency, especially in contract business.

“Given the volatile overall situation, we also recommend that companies closely coordinate with their customers and clients to be able to respond quickly to changes,” says Grabowski. This concerns both price and capacity development.

Photo: © ELVIS AG / Image Caption: Nikolja Grabowski, CEO of ELVIS AG.