News / Euro road freight rates are falling, but costs are up and driver shortage persists

© Andrii Yalanskyi

European road freight spot rates are beginning to fall back to more normal levels, but hauliers still face rocketing operating costs and the continuing shortage of drivers.

The Q2 European Road Freight Benchmark, by Transport Intelligence (Ti), Upply and the International Road Transport Union (IRU) says low levels of consumer demand have driven spot rates down since Q2 23, but “due to the less-negative demand environment” in Q2 this year, they have begun to ‘normalise’. 

“Adjusted retail sales, excluding motor vehicles in the Euro area, only marginally improved quarter on quarter, by 0.3%. Year on year, there was a similar increase, of 0.4%,” states the report. 

The spot rate index increased by 3.5 points since last quarter, to sit at 127.7. Year on year, the index is up 0.8 points.  

Contrastingly, the contract rate index fell to 127.1 points in Q2 24, dropping 1.3 points since Q1 and down 0.7 points year on year. 

But operating costs for hauliers have increased, especially for labour, maintenance and insurance, at an EU quarter-on-quarter average of 1.2%. Labour costs increased 1.2% and vehicle insurance costs rose 3% since last quarter, with labour costs now up 7.3% on last year. 

However, the report notes that the increases are not as steep as they were in the last quarter, “thus we can observe the effects in supply side pressures easing on both spot and contract rates”. 

Meanwhile, the truck driver shortage “remains a significant challenge”. 

According to the preliminary results of the IRU’s driver shortage study, 44% of European companies are still facing severe difficulties in filling truck driver positions, with SME companies the most impacted. 

“Given the low profit margins of the road freight operators, big trucking companies have more means to attract and retain drivers,” explained the report, those means including driver licence and qualification costs, offering flexible career paths and providing comfortable cabins and equipment. 

And 48% of European companies expect to face difficulties filling truck driver vacancies next year. 

“One-third of truck drivers are 55 years or older and will retire in the next 10 years, while only 5% of truck drivers are below 25 years old,” warned Ti, Upply and IRU. “Thus, if no action is taken to improve the attractiveness of the profession… the truck driver gap will increase and potentially put upward pressure on driver costs,” says the report. 

And it’s a problem likely be exacerbated by increasing demand for road freight, expected to rise 1.6% year on year in 2025, largely due to consumer consumption, resulting in EU volumes reaching a predicted 1.94 trillion tkm (tonne-km), after rising 0.4% this year, to 1.91 trillion tkm.

The report suggests spot rates increases will continue to be incremental, as consumers are still cautious and households remain in “saving mode”, while contract rates “will level out, as long industry recovery remains sluggish”.

However, “big uncertainties”are  impacting global supply chains, says the report.

“Any developments related to the two ongoing wars and heightened geopolitical tensions will have an impact on global trade and energy markets,” it concludes.