According to a recent report, Europe’s road freight industry is set for strong growth over the coming five years. The eastward expansion of the EU has provided a big boost to the industry which has benefited from increased trade flows between Western and Eastern Europe. The inclusion of Eastern European countries has also opened up their industries for the free flow of foreign investment in individual sectors, thereby providing these countries with much needed capital to upgrade and expand existing infrastructure. Consumption levels have increased with better connectivity between urban and rural areas thereby increasing the overall demand for goods within the region.

Insufficiency of motorways is a major bottleneck affecting the growth of road freight in the Eastern European countries. The lack of motorways increases the cost of transportation due to road congestion, increased travel times and increased wear and tear. This reduces the overall efficiency of the supply chain.

However, countries in Eastern Europe, individually, and collectively with the European Union, are investing large sums of money to upgrade and expand road infrastructure in the region. Tax policies have also been eased to usher in more foreign direct investment within the sector besides allowing increasing opportunities for privatisation and foreign ownership of large assets.

Nonetheless, they still have a way to go to compete with road transport networks in Western Europe which are well developed with an extensive network of motorways. The road networks are also well connected to other modes of transport, thus completing one of the primary requirements of transporting goods efficiently within the region.

Governments across Europe are also implementing environmental regulations such as a tax on the use of high polluting vehicles and setting up special low emission zones in urban areas in an effort to reduce the overall carbon emissions from the road transport sector. Prominent examples of such zones and emission norms can be seen in the central London area as well the German towns of Munich, Hannover and Berlin.

With the eastward expansion of the European Union, the stage is set for steady and continuous growth in the European road freight market. The size and structure of the market is set to change as trade between the western and eastern parts of the continent rises.