Driving To Deliver Your Business

European road freight prices soar to 10-year highs

Stuart Todd & Will Waters | 2018-02-20 13:41:21.0 Driver shortages drive up rates by 14%, year on year, as capacity falls by almost a quarter European road freight rates soared to their highest point for more than a decade in the final quarter (Q4) of last year despite a quarterly increase in capacity of more than 6%, according to the latest edition of the Transport Market Monitor (TMM) published by technology and consulting group Capgemini and cloud-based logistics software provider Transporeon.

The price index for the quarterly study, tracking transport market dynamics, increased by almost 6% in Q4 2017 compared with the preceding quarter and showed a rise of 14% compared with Q4 2016. Meanwhile, the TMM’s capacity index was up 6.4% in Q4 compared to Q3 but was 23.3% lower than the level in Q4 2016. The study’s diesel index increased by 10% from Q3 to Q4 of last year.

Capgemini’s supply chain director, Erik van Dort, commented: “Transport companies managed to get good prices for their services in 2017, but Q4 is really unique. In the eleven years that we’ve tracked transport prices, we never recorded such high prices. Q3 was already close to a record for historic Q3s, with only Q3 2008 higher, but Q4 is breaking records compared to any previous quarter.”

Although the first quarter of the year is always relatively slow, van Dort said it would be interesting to see whether the ongoing driver shortage in Europe – reflected in the year-on-year drop in road freight capacity – translates into higher prices than normal in Q1. Transporeon’s director of business development, Oliver Kahrs, noted: “The available transport capacity increased by 6% in Q4 2017, but declined by almost a quarter compared with the previous year. Capacity has been below average since Q2 2017.

“This illustrates how persistent the problem is. The shortages cannot be resolved in the short term and could develop into a lasting trend. An intelligent strategy mix in their transport execution is becoming increasingly important for shippers.”

The UK is among several European countries experiencing major driver shortage issues. In its most recent Skills Shortage Report, the Freight Transport Association (FTA) in November reported that UK driver shortages had risen sharply to 52,000 in the twelve months leading up to the second quarter of 2017, an increase of 49%. Sebastiaan Scholte, CEO of European road freight specialist Jan de Rijk Logistics, told Lloyd’s Loading List that it was not just western Europe that was experiencing driver shortages.

“Driver recruitment is a challenge in all European countries right now, west and eastern Europe,” he said.

Image: Shutterstock.com

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