Decrease of the road transportation rates in Europe at the beginning of the year is a temporary phenomenon

According to Sennder, a Digital Freight Forwarder, the cost of road transportation in Europe increased by 13% in 2022 based on the rates it pays its carriers. One of the largest increases (24%) was observed on the Poland–Germany route.

The main reasons for the increase in European transportation costs were primarily higher fuel prices and a shortage of drivers. In addition, the Rhine’s low water level in the summer led to increased demand for transportation capacity, which, coupled with a shortage of drivers, resulted in higher prices on domestic and foreign German routes.

However, 2023 brought another trend: the traditionally weak transportation demand at the beginning of the year was aggravated by the economic downturn in Europe. During January and February 2023, there was a drop in rates: at the end of the second month of this year, the rate level was 4 percent lower than in January 2022.

A similar trend was evident from the exchange data.

As reported by Thomas Christenson, Chief Operating Officer at Sennder, the situation with decreasing rates on the spot market cannot last long: carriers operate with a small markup, so rates cannot fall much lower. And assuming Europe begins to recover in the second half of the year, we can expect rates to rise noticeably as a shortage of drivers becomes more acute again and oil prices return to their historic levels.

A lot will depend on China’s economic recovery following the lifting of coronavirus restrictions. Increased demand in the Middle Kingdom could stimulate the European industry.