Procurement of road freight services, also known as ‘road haulage,’ benefits buyers from several end-use sectors such as agriculture, construction, manufacturing, oil and gas, fishing and forestry, and mining & quarrying. The global market size was estimated at USD 3,912 billion in 2023. Creating a successful, efficient, and secure logistics strategy is crucial for any business that relies on transporting goods. Key benefits of these services include affordability, availability, speed, and flexibility. APAC dominated the global industry, comprising 32% of the global market share in 2023. The rapidly growing e-commerce sector in developing countries, including India and China, has greatly increased the demand in APAC.
Road networks offer extensive coverage, granting access to remote regions. They facilitate flexible scheduling, allowing service providers to adapt to delivery times according to demand fluctuations or urgent needs. Compared to alternative transportation modes (rail or air), this mode demands lower initial investments in infrastructure or specialized vehicles. A few of the key challenges are driver shortages, fuel price volatility, and infrastructure issues. For instance, maintenance or construction projects on key highways or roads disrupt traffic flow, causing delays and detours for freight carriers. Similarly, fuel price fluctuations substantially impact operating costs for service providers, thus affecting their profitability.
Key technology trends that are driving the growth of the industry include deployment of electric vehicles (EVs) and autonomous vehicles, use of artificial intelligence (AI) and machine learning (ML), real-time freight visibility and automation, and predictive analytics. For instance, to ensure real-time freight visibility and automation, service providers are deploying advanced technologies, such as real-time tracking systems and the Internet of Things (IoT), to provide precise, real-time information on the location and status of shipments. Similarly, the adoption of predictive analytics has improved the accuracy of demand forecasting, route planning, and risk management in road freight services. It is being used to analyze vast amounts of data on weather patterns, traffic conditions, and historical performance.
Order your copy of the Road Freight Procurement Intelligence Report, 2024 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis
Key suppliers in this industry are prioritizing the reduction of their carbon footprint by embracing green technologies and alternative fuels. Key initiatives involve incorporating renewable energy sources for electric vehicles (EVs) and researching alternatives such as bio-LNG and bio-CNG. The objective is to attain decarbonization and adhere to international climate agreements such as the Paris Accord. Moreover, prominent suppliers are placing a strong emphasis on operational efficiency, customer satisfaction, scalability, and strategic partnerships. In terms of the demand landscape, buyers are increasingly focusing on tracking capabilities, reputation, and reliability.
The prices of products in this industry alter based on several parameters. Key factors leading to fluctuations in prices include type of shipment (FTL/LTL), speed and transit time, cargo volume and weight, distance covered, customs and tariffs, and labor cost. For instance, customs procedures can sometimes cause delays or disruptions in the transportation process, as goods may get held up at border crossings, leading to longer transit times. In terms of cargo volume and weight, larger or heavier shipments may require additional handling or special equipment for loading and unloading, which can increase the carrier's operational expenses.
During the COVID-19 pandemic, this industry experienced significant challenges due to supply chain disruptions. Road closures, movement restrictions, and government-enforced lockdowns prompted many service providers to halt their operations temporarily. The implementation of safety measures, such as frequent sanitization, social distancing, and the use of personal protective equipment (PPE), further complicated operations. Additionally, health concerns affected the availability of truck drivers and other logistics personnel. Post 2023, freight volumes and shipments have seen considerable improvement.
Road Freight Sourcing Intelligence Highlights
• This market consists of a fragmented landscape, with the players engaged in intense competition.
• Buyers have substantial bargaining power due to the ease of switching to alternative service providers.
• India, China, Lithuania, Poland, and Bulgaria are preferred as low-cost or best-cost countries within their relevant regions for sourcing and procurement due to low vehicle costs, cheap labor costs, and favorable government policies.
• The key components of the cost structure involve the cost of vehicles, fuel, labor, technology, licensing and compliance, maintenance and repair, and others. Other costs include safety equipment, general and administrative, rent and utilities, loading and unloading, road taxes and tolls, and marketing and sales.
Browse through Grand View Research’s collection of procurement intelligence studies:
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Road Freight - Key Suppliers
• A.P. Møller - Mærsk A/S
• C.H. Robinson Worldwide, Inc.
• CMA CGM Group
• DSV A/S
• Expeditors International of Washington, Inc.
• FedEx Corporation
• J.B. Hunt Transport Services, Inc.
• Knight-Swift Transportation Holdings Inc.
• Kuehne + Nagel International AG
• Landstar System Holdings, Inc.
• Old Dominion Freight Line, Inc.
• United Parcel Service of America, Inc.
Road Freight Procurement Intelligence Report Scope
• Growth Rate: CAGR of 4.5% from 2024 to 2030
• Pricing Growth Outlook: 5% - 10% increase (Annually)
• Pricing Models: Flat-rate pricing, mileage-based pricing, volume-based pricing, weight-based pricing, spot pricing, contract pricing
• Supplier Selection Scope: Cost and pricing, past engagements, productivity, geographical presence
• Supplier Selection Criteria: Geographical service provision, industries served, years in service, employee strength, revenue generated, key clientele, regulatory certifications, freight type (FTL/LTL), maximum weight per shipment, containerized/non-containerized, long-haul/short-haul, temperature controlled, real-time tracking, value-add services (storage/labeling/bundling/packing), lead time, and others
• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model
Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.
Our services include (not limited to):
• Market Intelligence involving – market size and forecast, growth factors, and driving trends
• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
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