Roads

July 06, 2016

Are current market conditions generally positive for the road transportation industry?

Respondents from the road transport industry are divided when asked if market conditions are generally positive for the industry.

Of the 57 percent who believe market conditions are positive, a third attribute this to the emergence of new market opportunities, followed by a quarter who cite the availability of funding for investment. The 43 pecent who do not consider current market conditions as positive point to economic uncertainty in key markets. Respondents also cite political uncertainty, inadequate infrastructure planning and investment, an increase in competition, a lack of available funding, and lower oil prices.

 

If yes, what is the principal reason for your view?

 

If no, what is the principal reason for your view?

 

 

What do you believe will happen over the next five years in the road transportation industry?

Most respondents expect fuel costs to increase over the next five years. While 65 percent believe that freight volumes will increase and 53 percent think that the number of routes and services will increase, just 45 percent anticipate that the growth of the road transport market will translate into an increase in freight costs. Respondents are considerably more confident that investment in technology will rise than they are that investment in infrastructure will increase.

Fares / freight costs will

 

Freight volumes will

 

The number of routes/services offered will

 

The availability of funds will

 

Investment in infrastructure will

 

Investment in technology will

 

Fuel costs will

 

Which three countries offer the best investment opportunities for the road industry over the next two to five years?

In common with respondents from the aviation, rail and shipping industries, Asia Pacific is regarded as the region offering the best investment opportunities for the road transport industry over the next two to five years, followed closely by Europe. By country, the US is the most popular market, followed by China and Germany.

 

By region

 

By country

 

 

What do you view as the optimal investment opportunity currently for the road transportation industry? 

Enthusiasm for investment in new technology is highest among respondents from the road transport industry. The development of new technology represents the optimal investment opportunity, according to 33 percent, compared with just 4 percent of respondents from the aviation industry, 12 percent from the rail industry and 14 percent from the shipping industry. After technology, infrastructure improvements and the adoption of intermodal freight transport are considered the best investment opportunities.

 

 

What form of technology will be the most significant driver of change in the road transportation industry over the next five years?

Despite this appetite for investment in technology, there is little consensus over where investment should be focused. Approximately one third of respondents believe autonomous vehicles (i.e. driverless cars) will act as the biggest catalyst for change over the next five years. A similar proportion think that low carbon technology and predictive analytics will have the greatest impact; and advanced e-commerce solutions are also expected to play a role.

 

 

What is the greatest challenge to the operational efficiency of the road transportation industry?

When asked what presents the greatest challenge to the operational efficiency of the road transport industry, a third cite inadequate infrastructure, followed by 19 percent who point to intermodal or logistical inefficiencies and 14 percent who highlight a lack of qualified people.

 

 

 

Which regulation has had the greatest impact on the road transportation industry over the past decade?

Increased environmental regulation is reported to have had the greatest impact on the road transport industry over the past decade, highlighted by 43 percent. This is followed, to a lesser extent, by trade and financial sanctions and fragmented global regulation (both selected by 19 percent).

 

 

Which of the following forms of government support would help the road transportation industry most?

According to respondents, by far the most helpful form of support governments can offer the road transport industry would be investment in infrastructure, selected by 71 percent. Other forms of support cited include deregulation, fiscal incentives and lowering fuel tax.

 

 

What do you see as the greatest threat to the road transportation industry over the next five years?

Fears of a worldwide economic slowdown weigh on the road transport industry as well as on the aviation and shipping industries. 20 percent  believe that a global recession poses the greatest threat to the road transport industry over the next five years, followed by 29 percent who fear continued political and economic uncertainty within the Eurozone.

Read more: Are you risk ready?

 

What will be the primary source of funding for the road transportation industry over the next two years?

The road transport industry expects to turn to a diverse range of sources for its funding needs over the next two years, the most popular being bank debt, followed by capital markets and government support.

 

Which of the following will form the most important part of road transportation businesses’ strategy over the next 12 months?

The formation of joint ventures, alliances and pools is expected to be a key element of road transport businesses’ strategy over the next 12 months, together with a focus on reallocating existing capacity from stagnant to growth sectors and clients.