The International Road Transport Union (IRU), along with Upply and Transport Intelligence, have released Europe’s Q2 road freight rates which show new records across the board.
The European Road Freight Rates Benchmark, produced by Transport Intelligence (Ti) Upply, and IRU, analyses European road freight rates and market outlooks on a quarterly basis.
The report found a EU-27 pre-tax diesel price increase by 69 per cent since January this year, following the invasion of Ukraine in March.
Multiple indicators also point to a weakening demand for European road freight, with declining activity in all major economies and inflation rates weighing on consumer and business confidence.
Driver shortage is also continuing to affect the entire European continent. According to the report, Germany is in a critical situation with an estimated shortage of 50,000 to 80,000 truck drivers.
IRU Director of Corporate Services, Vincent Erard, said that it appears freight prices will continue to be affected by these numbers.
“The driver shortage is one of the biggest challenges for the trucking industry at the moment, and its effects are likely to increase in the near future and continue to impact freight prices,” he said.
“The age distribution of drivers already gives a taste of what is to come, with 34 per cent of drivers aged over 55 in Europe and young drivers under 25 representing only seven per cent.
“This trend will worsen if older drivers continue to retire, some of them earlier than expected, as during the COVID-19 pandemic, further reducing the pool of available drivers.”
The second instalment of this year’s quarterly report also found that inflation is rising in all European countries, reaching a record-high of 8.6 per cent in June.
According to the latest data, Spain is experiencing the highest increase with a price rise of 10.2 per cent higher than the other major European economies of Germany (7.9 per cent), France (5.8 per cent), Italy (eight per cent) and the UK (9.1 per cent).
Upply CEO, Thomas Larrieu, said the quarter’s numbers will most likely remain high for the next few months.
“The lull in European demand should slow the upward pressure on road freight rates,” he said.
“On the other hand, hauliers are still facing significant cost increases (fuel, labour, etc.), so rates are likely to remain at high levels in the coming months.”
France and Spain saw very significant increases in spot rates by 21.2 per cent quarter-on-quarter in the Paris-Madrid direction. According to the report, this is almost twice the average increase in European spot rates and is also the second highest of all European spot rates.
Transport operations between France and Great Britain have also become more expensive and longer. Researchers at the London School of Economics (LSE) found that British imports from the EU have fallen by 25 per cent compared to other destinations.
In addition, the variety of goods traded fell by 30 per cent, and low value goods were the most affected by the increase in administrative costs.