A recent analysis suggests that road freight rates in Europe are likely to be subject to continued upward pressure over the coming months.
What’s happening with European road freight rates as we enter the second half of 2024?
Individuals and organisations with a requirement for intermodal freight solutions may be interested in a recent analysis suggesting that road freight rates in Europe are likely to be subject to continued upward pressure over the coming months.
The analysis in question was undertaken by the International Road Transport Union (IRU), which found that the costs faced by transport companies were not decreasing at all.
Furthermore, there are signs of a gradual awakening of demand, while toll increases in some countries look set to contribute further to climbing freight rates.
2024’s early months were subdued, but signs of change are emerging
Quarterly research carried out by IRU and Transport Intelligence found that both the spot and contract rates index saw a decline during the first three months of 2024.
The European spot rates index, for example, dropped to 123.9 points for that period, which was 1.1 points lower than the previous quarter, and 8.2 points below that seen for the corresponding period of 2023. Meanwhile, the contract rates index scored 127.6 points, which was a 2.6-point fall from 2023’s last quarter, and 1 point below the same period a year earlier.
This subdued picture tallies well with the indication given by IRU analysts that – drawing upon data from McKinsey – the European inflation level was at its lowest for 33 months in March.
As reported by trans.info, there are signs that many eurozone countries are gradually commencing a recovery from the economic slowdown. The PMI index, for example, has indicated positive industrial activity in Spain and the Netherlands.
Experts from Transport Intelligence have predicted a 0.4% year-on-year increase in the volume of European road transport this year. While that might seem a subtle change, it would mark a significant rise from the 1.1% decline recorded for 2023.
If such a slight rebound does come to pass, it would probably be attributable to a combination of reduced inflation, higher real earnings, and improved customer sentiment and activity.
So, are the rates for freight by road set to go up over the next few months?
Judging by the factors mentioned above, this would seem a very probable prospect. After all, if there is greater consumption, this will translate into heightened demand for goods, thereby accelerating demand for transport services. It is only natural to expect rates to go up as a consequence.
As IRU has pointed out, road freight operators have continued to face high operating costs, driven by such factors as vehicle maintenance, insurance, and tyre costs. The organisation has highlighted that diesel prices, for example – which fell during 2023 – began to climb again early this year.
If, then, you are seeking to take advantage of the best possible road freight rates and intermodal freight solutions during 2024, it might be ideal to act now, rather than later. Contact the KTL team today, and we will be pleased to discuss your needs and to provide you with the most competitive quote.