Europe inland shipping market set for growth and consolidation

12 January 2024 4 min. read

Europe’s inland waterways shipping market is expected to see strong growth in the coming years. Due to continued growth in demand, sustainability, and geopolitical shifts, further market consolidation is looking increasingly likely. That is according to a report by M&A consultancy IMAP.

Valued at around $20 billion, the global inland shipping market plays a key role in the transport of goods within economies and internationally.

According to IMAP’s report, Europe’s inland shipping market, which sees huge amounts goods move through the Rhine, Seine, and Danube rivers, along with a web of other smaller waterways, is worth an estimated $10.2 billion. The market is estimated to grow 5% annually, outpacing global growth partly due to the EU’s focus on sustainability.

Europe inland shipping market set for growth and consolidation

The study estimates that Europe’s inland shipping market makes up nearly half of the total global inland shipping market. Asia is another major market.

With EU green policy promoting sustainable business practices, the sector is seeing its popularity as a transport mode on the rise. Alongside rail transport, inland waterway shipping is considered the most sustainable mode of transport.

Follow the river routes

Two of the mightiest rivers of Europe are the most relevant for the sector. The Rhine leads the way as the busiest European inland waterway with 49 billion TKM (transport of one ton of goods), followed by the North-South Axis with 35 billion TKM, and the Danube close behind with 22 billion TKM. These waterways pass through more than 10 countries and through a number of large cities, including a several capital cities and cities with huge ports, like Rotterdam and Brussels.

Europe inland shipping market set for growth and consolidation

It is not just larger countries that lead in the sector – smaller countries are major players too. For example, the Netherlands, with its strategic location at the mouth of the Rhine/Waal rivers, commands an important position in the European market for inland waterway shipping.

Inland waterway shipping revenue in the Netherlands increased by a remarkable 43% in 2022, due mostly to increased prices. The lion’s share (36%) of cargo transported on Dutch waterways is destined for export. The country claims more than a third of all EU27 transport activity, making it an uncontested regional leader.

The main products driving the European market are cereal grains, meat products, and dairy products, which fall under the category of dry bulk. Other major dry cargo products include iron, coils, plates, pipes, and containers with anything from machinery parts to apparel.

Other major products – some of which are consider liquid bulk – that can be found on inland waterway routes include chemicals like industrial gases and fertilizer, mineral oils, gasoline, and other petroleum products.

Europe inland shipping market set for growth and consolidation

Shipping of agri-food products was severely altered due to the war in Ukraine, which led to that country’s enormous stock of grain being largely locked out of foreign markets. The war, which saw most European countries quit Russian oil cold turkey due to international sanctions, also caused a surge in the demand for coal to offset energy prices, despite the fossil fuel being notoriously bad for the environment.

Trends and outlook

Looking ahead, IMAP forecasts a number of trends in the sector. Firstly, steady growth is expected and the outlook up to 2027 is 4.1% compound annual growth. Dry bulk is set to account for between 60% and 70% of the cargo increase.

Secondly, greater sustainability is also a likely trend that will emerge moving forward. Emissions restrictions will make inland shipping even more attractive and the well-established network of waterways makes it an effective mode of transport. “As a consequence of the European Union’s green policy, the inland shipping industry will be fueled by a growing market as transported volumes will increase,” states the IMAP report.

A third trend will be the further consolidation of the market. The positive direction that the sector is moving in lends itself to driving M&A activity, with companies looking to scale up and command financial strength in order to stay ahead of the competition. Larger companies will be considering acquisitions when looking to increase the size of their fleets or looking to expand their expertise, among other strategic reasoning.

“The European Union's ambition to lower emissions is leading to increased investments in greener technologies, favoring medium and large companies over smaller ones. Moreover, geopolitical events have disrupted supply chains, making inland shipping an appealing alternative. These factors are reshaping the industry landscape and driving the need for acquisitions and mergers,” reads the report.