News / 'Uncertainty-led' weak demand bites into Q2 Euro road spots

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European road freight spot rates have taken a battering from uncertainty-led weak demand, but the outlook is not all doom and gloom for hauliers.  

According to the Q2 European Road Freight Rate Development Benchmark, by Transport Intelligence (Ti), Upply and IRU, spot and contract rates have converged for the first time since January 2017, and are now at 132.2 points.  

That spot rate index declined 2.2 points quarter on quarter and is now at its lowest level since Q4 23, while the contract rate index has inched up 1.2 points since last quarter.  

“This is really due to a weak short-term demand, largely around the heavy uncertainty,” explained Nathanial Donaldson, data and modelling manager at Ti. 

Indeed, according to the Q2 benchmark, machinery orders in Germany are down 12% on Q1, and chemical demand is down 11%. 

“So that’s really big drops,” added Mr Donaldson. “Usually, we’d use that to reflect the long-term outlook, but actually this works really well to look at the short-term situation, because this is actively affecting rates in the short term.

“A lot of buyers are deterred by this uncertainty. They are unsure whether to buy, with what’s happening with the tariffs. What we’re seeing is an immediate reduction in short-term demand and increased availability of spare supply, and that’s pulling a lot of rates down in that spot market across Europe.” 

The rise in contract rates was attributed to “modest European manufacturing gains in some countries”. Production of durable consumer goods rose by 1.1% quarter on quarter, while non-durable goods saw a 4% increase from the previous year. 

And the report underscores that, while the outlook is uncertain – and largely dependent on tariff negotiations – some demand pressure is expected to return in the medium-to-long term, led by a recovery in EU retail activity, which could boost spot rates later in the year.  

Cost pressures for European hauliers are also subsiding. According to the IRU Fuel Prices service, the EU’s weighted average for diesel prices is down 6.4% compared with Q1, and “overhead costs remain stable”. 

But one major issue plaguing the sector, and unlikely to see relief any time soon, is the shortage of truck drivers.  

Ti, Upply and the IRU report that the lack of new drivers “continued to intensify” across Europe in Q2, with some 426,000 positions still vacant, and is particularly prevalent in Portugal, Spain and Estonia. 

In a bid to alleviate the shortage across member states, EU institutions have agreed to lower the minimum age for truck drivers to 18, with training permitted from the age of 17, and on measures to ease the mobility of non-EU drivers.