Freight News, Road

Road rate index hits all-time high

[ April 28, 2022   //   ]

The International Road Transport Union (IRU) said the European Road Freight Rate Benchmark hit an all-time high in the first quarter of 2022.

Rising costs, supply and capacity disruptions, regulatory change and war in Ukraine created a potent mix of rate drivers. The Benchmark index rate rose by 4.3 points over the previous quarter, while it increased 7.5 points over the first quarter of 2021.

Fuel costs were up around 52.7% y-o-y on average across European markets, and the ongoing driver shortage have also helped push up costs and rates across Europe.

New data from IRU shows driver shortages across Europe in 2021 reaching up to 425,000 unfilled positions; made worse by the war in Ukraine.

Freight rates are expected to remain high through 2022 as volatility from inflation and the fallout from the war in Ukraine continue to increase costs, though as inflation takes hold overall demand may decrease, relieving upward pressure.

While the most apparent effect of the war in Ukraine has been to increase fuel prices, the conflict has also worsened the European driver shortage. New data from IRU shows driver shortages across Europe increasing to up to 425,000 unfilled positions in 2021. These shortages have been worsened by the war. There are over 228,000 non-EU truck drivers operating in Europe in 2021, many from Ukraine and Belarus.

Another significant change in the first quarter of 2022 is the entry into force of new EU Mobility Package rules in February, although the impact is still limited as 22 of 27 EU countries are late in implementing the new rules on the posting of foreign drivers and new market and profession access rules. The impact of these new rules on European rates will become clearer in subsequent quarters.