Industry research
Scope
Europe
Companies
167
Table of contents
What does the Road Freight market landscape look like in Europe?
The European road freight logistics market is highly fragmented, with many small-sized logistics and road freight transportation companies. This is mainly due to the domestic nature of operations incurred by the short distance of most road freight transports, the large domestic market of certain countries, the types of transported goods and regulations. The courier, express & parcel logistics segment appears as the exception, with the top 3 (DHL Group, UPS and FedEx) players capturing ~95% of the European market.
What is the level of investor activity in the European Road Freight industry?
Investor interest has been limited with >30% of identified players backed by financial sponsors (January 2025). Attractive factors for investors include ample M&A opportunities to grow the number of logistics sites and truck fleets, acquiring productivity and efficiency-enhancing technologies and the nearshoring trend of production sites towards Eastern Europe. Deterrents include complex operations involving many stakeholders and time pressure, particularly with last-mile deliveries, low cash conversion and thin margins, limited differentiation potential, the weak outlook in the European and global economy and the increased cost and uncertainty related to compliance with the EU’s sustainable regulations.
What are the key ESG considerations in the European Road Freight industry?
From an environmental standpoint, incumbents in the road freight logistics market have a crucial role to play in reducing emissions from transport and warehousing activities. In 2024, road freight transportation contributed to ~51% of the total generated by logistics activities and ~71% when accounting for warehousing. These players are even more incentivised to transition to greener operations due to the demand for less emissions from all stakeholders of the economy to reduce their own Scope 3 emissions. In line with this demand, we observe players replacing their vehicles with electric ones, particularly in the last-mile delivery segment, and increasing the share of sustainable fuel. In terms of social risks, handling heavy goods can often have detrimental consequences on the human body and the well-being of drivers and workers. As such, incumbents address this issue by re-designing their workplace to limit such incidents.
The European third-party logistics market was projected to grow from ~€272.5bn in 2025 to ~€296.5bn by 2029, registering ~2.1% CAGR over the period (Statista, September 2024)
The European road freight transportation market is estimated to grow at ~1.8% CAGR in 2024-2029, reaching ~€446bn by the end of the period (Technavio, January 2025)
Technological advancements, including robotics, AI, big data analytics and the Internet of Things (IoT) will improve productivity, reduce operations costs and mitigate selected supply chain risks. To illustrate, AI is expected to boost logistics productivity by ~20% in the next 10 years (DHL Group, December 2023)
Growing European e-commerce volume will continue to drive demand for logistics and transportation services. The demand is further enhanced by high product return rates from online shopping, which require reverse logistics services (Statista, October 2024; BNP Paribas, May 2024)
The increasing share of nearshoring by European businesses amid high geopolitical risks is expected to positively affect the volume of European road freight transportation (ING, December 2024; Supply, September 2022)
Truck driver shortage in Europe limits growth opportunities for incumbents. The current gap of ~500k drivers is projected to worsen as the ageing labour force is combined with inadequate inflow of new drivers due to long working hours and low wages (ING, December 2024)
The EU regulations create uncertainty and higher costs for road freight logistics. For instance, the emission-related toll per kilometre imposed by Germany has exacerbated the spread between contract and spot freight rates, driving the contracted cost of transportation up (trans.info, February 2024)
Sluggish economic development in Europe inhibits the underlying demand for the road freight logistics. As German economy continues to decline and households with low consumer confidence are incentivised to save, the incumbent players face stagnant business volumes (DHL Group, January 2025)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 167 private companies, incl. financials, ownership details and more.
A view on all 696 deals in the industry
ESG assessments with highlighted ESG outperformers
