European Road Freight Transport 2025

Ti’s latest report finds European road freight market is recovering with 2025 growth of 1.1% after a stagnant 2024 market.

The EU Road freight sector is navigating a complex landscape characterized by fluctuating demand, economic pressures, technological advancements, and sustainability challenges. Recent changes to US global trading policies and the continued war in Ukraine are further burdens. 

Ti’s latest report, European Road Freight Transport 2025, looks at the key themes shaping its current and future trajectory.

Key Takeaways:

• European Road Freight growth stagnant in 2024 – 0% market growth
• Tentative signs of recovery – Ti projects the market will grow by 1.1% in real terms in 2025
• The medium-term outlook for European road freight is stronger, with an expected real terms 2024-2029 CAGR of 2%
• Operating margins of the top 5 players held up in 2024 despite the flat market, with a benchmark margin of 4.5%
• The past year has seen significant consolidation at the top of the road freight market, led by the acquisition of DB Schenker by DSV, but the market remains highly fragmented and competitive.
• Risks to European road freight remain as labour shortages persist, with 426,000 unfilled driver positions in 2024 (IRU), and regulatory demands increase.
• AI is becoming increasingly widely used within the road freight market, the report contains 16 case studies of live applications.

Freight Volumes

The road freight sector has witnessed declining freight volumes due to stagnant GDP growth across Europe, competition from Asia, changes in U.S. tariffs. However, in 2025 volumes are expected to expand by 1.1%. Over the medium-term, volumes are expected to grow by a 2024-2029 CAGR of 2%.

Michael Clover, Head of Commercial Development at Ti, said: “After a challenging 2024 there are signs of recovery in the road freight market in 2025, with growth of 1.1% expected. While the European market is braced for the knock-on effects of US tariffs on the EU market, underlying demand in Europe, though still weak, looks set to fuel a partial recovery.”

Market Dynamics

Shippers face significant cost pressures driven by rising energy costs, competition from Asian markets leading to intense competition in tenders for carriers. However, in the first half of 2025 cost pressures have eased, largely due to declines in diesel prices which are down to levels not seen since 2021. Although recent developments in the Middle East could lead to rapid fuel price increases through the second half of 2025. Capacity remains constrained by driver shortages but with demand subdued the effect on road freight pricing has been reduced. Ti expects relatively stable road freight rates in 2025, unless conflict in the Middle East should raise diesel prices substantially.

Technology

Technology has great potential to improve efficiency and productivity in the road freight sector however adoption remains limited, especially among small and medium sized enterprises struggling with low returns and insufficient resources. However there is still significant technological development taking place, with Ti mapping out the digital landscape in 2025 in the new report with company profiles and a new market map. Ti’s new report also shows the extent to which AI is being used in the market, highlighting 16 case studies of applications of AI by innovative companies operating in or serving the road freight market.

Driver Shortages

Driver shortage remains a pressing issue, with data from the IRU showing that there were still 426,000 unfilled driver positions in 2024, with efforts to attract a more diverse workforce limited. The industry is also facing broader talent gaps in areas such as tech literacy, change management and data analysis combined with logistics expertise.

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The EU Road freight sector faces a mix of challenges and opportunities. Addressing these requires collaboration across the supply chain, innovative solutions, investment in talent development, and a readiness to embrace change.  The relatively small market share of even the biggest players, means this fragmented market needs technology pull, so smaller players can feel the benefits and choose to adopt, as few players have the scale to drive the change alone.