News / European haulage spot rates take another dive, but contract prices hold

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European haulage contract rates recorded their first climb since Q4 22 in the three months to September – but on the spot market, the situation remains gloomy.

Recording a 1.2-point drop, spot rates notched up a fourth consecutive quarter of declines on the Upply x Ti x IRU index, to leave them 14.8 points down year on year, and closer to their 2017 base level than the current average contract rate.

Describing the situation as “appalling”, one haulier put it bluntly by telling The Loadstar:“Container work is in the toilet.”

However, some suggest spot rates may finally be bottomiong-out, the speed of decline having slowed and no reports of the kind reported by The Loadstar just two months ago ,when drivers were being informed last minute of rate cuts of as much as €150.

Upply CEO Thomas Larrieu said: “Recent Upply data show road haulage prices holding up relatively well, despite a rather unfavourable economic climate.

“This is mainly due to a constantly rising cost structure for hauliers. Significant increases in fuel prices and wages are helping to keep upward pressure on prices, which is partly offsetting the downward pressure exerted by weak demand.”

Nonetheless, he warned, four consecutive quarterly declines was the market signalling ongoing volatility and “hinting that a market rebound might not be on the horizon”.

Over the course of the pandemic, many drivers found themselves turning towards work for Amazon, which was offering not only better rates but the work was proving less stressful than contending with container trade. This, though, appears to have also taken a battering.

One driver told The Loadstar: “Amazon is proving to be an appalling option for drivers seeking work, because the public just aren’t buying as much online.”

Where spot rates have steadily fallen, contract rates showed not only resilience over the third quarter, but upward momentum, climbing 1.4 points on Q2 to leave them down just 0.4 points on the same period last year.

The IRU said this was, in large part, driven by an elevated cost base, but said if the European sector continued to “stagnate”, it would start to exert downward pressure on contract rates.

Vincent Erard, senior director for strategy and development of the UN body, said: “The road transport industry is engaged in an unprecedented transformation, having to both respond to growing transport demand, up 50% by 2050, and decarbonising at the same time.

“Without support for the sector, there is a great risk of not achieving any of the economic and environmental objectives.”