Vehicle distribution capacity shortages across Europe

The end of the second quarter of the year, typically a time of peak demand in many European markets for delivery of new vehicles, has once again highlighted serious capacity shortage in most of these markets. At a time when the automotive sector is seeing both volumes and market confidence increasing across Europe the Finished Vehicle Logistics (FVL) industry is coming under significant pressure.

 The latest results of the ECG Confidence & Cost Trend Survey - conducted regularly amongst ECG members since 2010 –show operations at maximum capacity. Further investment is urgently needed to meet the increasing needs of the expanding market. Current financing is isolated and inadequate to meet growing demand. ECG’s Executive Director, Mike Sturgeon stated “Despite increasing confidence in future volumes, ever tighter margins and short term contracts mean the industry is still not investing in extra capacity.

Worse still, in many places the transporter fleet continues to age, and this despite plenty of production capacity at the trailer and truck manufacturers.” Industry leaders in trailer manufacturing, who saw their businesses collapse by up to 90% post-crisis, estimate that the European car transporter fleet has dropped from 19,000 to 16,500 units since mid-2008. Average trailer age has increased dramatically from 3.6 years in 2008 to the current average of 7.5 years. Difficulties are further exacerbated by a shortage of truck drivers. As the end of the third quarter approaches, capacity issues are expected not only to continue but to worsen for the foreseeable future.