The European freight market is heating up, says Lithuanian logistics company Girteka. Capacity is down, demand is rising, and so are (spot) prices. The company is operating a near-maximum capacity. Could higher trucking prices prove beneficial to (intermodal) rail?
Girteka points out that the volume of goods transported by road across the European Union is growing, and that that trend will likely continue in the coming years. However, those numbers (13,1 billion tonnes in 2024, good for some 1,900 billion tonne-kilometres), are only “surface-level figures”. Below the surface, there are many factors at play beyond a simple growth trend.
“Virtually all measurable indicators point to an overheating European freight market”, the logistics company says. The underlying reasons for the strained market are various: bankruptcies among transport and logistics companies as a consequence of the covid pandemic, truck driver shortages, the earlier expectation of US-imposed tariffs which prompted companies to stock up and growing domestic European consumption.
Near-maximum capacity
The result is that spot request volumes have doubled compared to 2024, while contractual volumes are also staying high. “For example, during a downturn, if we had an agreement for 100 shipments per month, we might execute only 50. When the situation improves, the figure rises to 70 or more. Now we are operating at near-maximum capacity,” noted Tomas Šilinikas, Director of Regional Sales and Pricing at Girteka.
In practice, for Girteka, “near-maximum capacity” means that the available capacity is imbalanced across the EU. The key challenge is not the absolute lack of trucks, but rather ensuring they are positioned where demand is highest. That requires accurate forecasting, quick decision-making, and the ability to shift capacity efficiently to the right markets.
A solution for driver shortages
Those challenges on the road are not immediately translating into successes for (intermodal) rail, sees Poland’s largest intermodal operator PCC Intermodal. The company also sees that a driver shortage, especially due to a lack of interest in long haul operations among new drivers, is putting a strain on the road sector.
Intermodal is well-suited to alleviate driver-related problems, says PCC Intermodal’s Marketing Director Monika Konsor – Fąferek. Rail can, after all, replace a lot of trucks and drivers on longer distances. Nevertheless, the cost picture remains the customer’s first priority, and that is where intermodal is not yet winning.
“Long distance trucks don’t pay track access charges for each kilometre driven, like trains do”, says Konsor – Fąferek. Moreover, energy prices remain high, pushing up the costs for rail further. In other words, long-distance trucking remains the cheaper option in many cases.
There is a little sidenote to make here. “It also must be said that intermodal does not exist without the road”, adds Konsor – Fąferek.
“The road is a very important part of the intermodal transport model. We can be a solution in that regard and accommodate better work conditions for young people to join the truckers’ teams on the domestic markets, so that they could work locally and come back home at night and for weekends, as others do.” That would resolve part of the drivers challenge.
Intermodal is not the go-to solution
When looking beyond the driver shortage, Girteka sees that intermodal is not the go-to solution for the capacity problems it faces now. “Intermodal rail services are generally not suited to absorb sudden spikes in short-term or spot demand”, says the company’s Intermodal Business Development Manager, Larisa Senkevičienė. “Their strength lies in planned modal shifts, where they can help relieve pressure on the road freight sector over the medium to long term.”
“In the short run, however, rail lacks the speed, flexibility, and elasticity that road transport can provide. If capacity is needed on short notice, rail is rarely the immediate solution — but it can play an important role by handling regular volumes, thereby freeing up road capacity to accommodate urgent spot needs”, Senkevičienė adds. The desired quick decision-making and the ability to shift capacity efficiently to the right markets is not something that intermodal can offer to the extent that the road can do so.
In spite of all that, the Girteka does see spikes in demand for intermodal when spot prices surge. “We see short-term peaks where customers are more open to intermodal solutions, especially when spot prices surge and securing capacity becomes critical”, explains Senkevičienė.
“However, road transport remains the preferred option in many cases, as it is generally faster, more flexible, and better suited for non-standard cargo. For goods where time sensitivity is crucial, shippers tend to stick with full road transport, even at higher cost.”