The European road freight rate benchmark, published by the IRU, showed that prices hit historic highs at the end of 2021.
Rates hit unseen levels due to a volatile mix of supply chain congestion, supply shortages, cost increases, and spiking demand from economic reopening across the European region.
The Q4 2021 European road freight rate benchmark index stood at 108.3 – 1.1 points higher than in Q3 2021 and 3.2 points higher than in Q4 2020. Q4 2021 is the sixth consecutive quarter of rate increases across Europe.
Contributing to this rise was fuel costs, which increased on average by 25 percent over the course of the year.
Driver costs have also risen due to shortages. New data from the IRU shows that in 2021 the UK had the most acute driver shortage, with up to 100,000 driver posts unfilled. The data also showed driver shortages of up to 60,000 in both Germany and Poland, whilst France had a shortage of up to 31,000. Italy and Spain had smaller shortfalls, but still had up to 20,000 drivers missing each.
Vincent Erard, IRU’s director of corporate services, said “The shortage of drivers is seriously disrupting supply chains in European countries as economies recover and demand for transport services increases. IRU continues to monitor, raise awareness and act with key stakeholders to structurally tackle the shortage of drivers. The urgency of the situation is reinforced by the continuous increase in fuel prices throughout 2021, also putting transport operators under great pressure.”
On the demand side, with European economies recovering from Covid-19 rapidly and manufacturers working to get back up to capacity, aggregate European demand has risen sharply. In Germany, for example, orderbooks across the country’s manufacturing sector are fuller now than at any time since records began in the 1960s. In France and Spain, manufacturing growth is being held back by supply constraints. In the UK, retail sales showed solid progress for much of the year and into the peak season. In November, sales were some 7.2 percent ahead of pre-pandemic levels. These factors, many of which have intensified throughout the year, have helped push aggregate road freight rates across the region higher.
A full copy of the benchmark report can be seen here.