In Q2 2024, the European road transport market exhibited contrasting trends between contractual and spot rates. The spot rate index rose by 3.5 points to 127.7, compared to 124.2 in the previous quarter. In contrast, the contractual rate index fell by 1.3 points, landing at 127.1 points.
The market dynamics are influenced by several factors, most notably a driver shortage. Preliminary data from IRU indicate that 48% of European companies expect greater difficulties in finding drivers next year. This issue is compounded by an aging workforce, with over a third of current drivers nearing retirement within the next decade, while only 5% are under the age of 25.
The demand for transport has also been affected by a decline in industrial production. In May 2024, the production of intermediate and durable goods decreased by 1% and 2.1%, respectively, while non-durable consumer goods saw a 0.8% increase. This context has contributed to the reduction in contractual rates, as weak industrial demand has limited contract growth.
Operational costs, however, increased by an average of 1.2% in the second quarter, with significant rises in labor and vehicle insurance costs. Despite this, a drop in diesel prices provided temporary relief, with the EU's weighted average diesel price falling to 1.07 euros per liter on June 10, the lowest since summer 2023.
Another notable development is the change in road toll policies. Sweden announced the introduction of a new CO2 emissions component for vehicles over 12 tons, effective from January 2025. Denmark and the Netherlands are set to follow in 2025 and 2026. Additionally, sixteen EU countries have been urged by the European Commission to advance the implementation of the Eurovignette Directive.
Analysts conclude that while the spot rate market shows signs of stabilization, the outlook for contractual rates remains weak, pending a possible recovery in industrial production and demand. Meanwhile, the introduction of new toll regulations could further impact costs and sector dynamics in the coming years.
Michael Clover, Director of Commercial Development at Transport Intelligence, commented, "Even though the pace of road transport cost increases has slowed, we still expect a rise in costs next year. With the return of volumes and tightening capacity, we anticipate carriers will manage to pass on the cost increases to their customers."
