The Transport Intelligence (Ti), Upply & IRU ‘European Road Freight Rate Development Benchmark’ Q4 2022 is now out.

Its goal is to provide transparency on European road freight rates – a snapshot follows:

Falling demand for road freight during an unsurprisingly lackluster peak season allowed spot rates to fall in Q4 2022. Meanwhile contract rates remained elevated with high fuel prices and a continuing driver shortage in Europe.

According to the European Road Freight Rates Benchmark Report, produced by Transport Intelligence, Upply and IRU, the spot index fell by 2.4 points quarter-on-quarter, down to 142.1 points, whilst the contract index rose 0.4 points quarter-on-quarter. This now puts spot rates up 18.1 points year-on- year and contract rates up 19.0 points year-on-year.

The drop in European spot rates results from low peak demand due to inflation pushing consumer confidence down to record low levels. Euro Area inflation peaked at 10.6% in October and Euro Area consumer confidence reached a historic low of 95.1 points in September with negligible improvement throughout Q4 2022.

High energy and food prices have altered consumer behaviour, reducing the demand goods and discouraging indulgence over Christmas. High energy prices have also made European producers less competitive on the global stage and record high order books from 2022 are falling as global demand falls. Production in France and Germany remains below 2019 levels. Europe does look set to have avoided a catastrophic energy crisis with energy consumption down and storage near capacity across the continent. The effect is very little price pressure from European demand but an absence of the feared demand destruction that would have significantly pulled down rates.

Both markets remain up at least 18.0 points year-on-year due to the high costs and low capacity of European road freight carriers in 2022. In addition, the road sector is under greater pressure to meet technological, environmental and safety standards from consumers and governments which has increased the cost base above historic levels…

The full report can be downloaded here.

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