EUROPEAN ROAD FREIGHT RATES HIT AN ALL-TIME HIGH
The latest quarterly European Road Freight Rate Benchmark published by Transport Intelligence shows that prices have hit historic highs across Europe, driven by a mix of robust economic growth, global supply chain bottlenecks, rising costs and scarce capacity. The Benchmark hit 107.6 for the third quarter 2021, its fifth consecutive quarter of growth and the highest level since it was established, in 2017. It also marks a 4% rise in benchmark rates compared to Q2 2020 when the worst of disruption from the COVID-19 pandemic was felt.
The report shows that the European retail and manufacturing sectors have seen demand rise steeply up to the end of Q3 2021. The increase puts further stress on the European road freight supply chain, suffering from structural capacity shortages across Europe: the shortage of qualified HGV drivers in the UK has led to empty supermarket shelves and severe congestions at the port of Felixstowe. But the shortage of drivers is also affecting continental Europe, where it is estimated to be between 40,000-50,000 drivers in France and rises to 65,000 in Germany.
Inflation also plays a significant role in the increasing road freight rates: According to data from Ti and IRU, diesel prices in Germany are 38.5% higher than Q3 2020, while the UK (+26.6%), Spain (+25.2%), France (+23.5%) and Italy (+20.6%) also saw markedly higher prices. “Heading into peak season and with the addition of rising costs, particularly higher diesel prices, all the ingredients for a period of sustained rate inflation are in place,” said Nick Bailey, Head of Research at Ti.