International road freight rate forecast for 2023-25

The Marketing Department of TELS GLOBAL has made a forecast for FTL road freight rates to/from/within the EU for the period 2023-25. The report states that forecasting amid the current global crisis is too imprecise.

The peculiarity of this crisis and its difference from the previous ones: it is not intrasystem (when subjects solve problems within the framework of existing rules and laws), it is a crisis in the worldwide system of relations. Such crises are difficult to predict, as there is a huge number of case scenarios emerging. The inclusion of a military component with the escalation possibility almost deprives us of the possibility of more or less accurate forecasting.

While fully understanding that any forecasts within the given scenario are of low accuracy even for several months, business still needs planning, and for this, forecasts are required.

Such forecasts in TELS GLOBAL are created in two stages: first, a functional mathematical analysis is made based on a selected data set, then the calculation results are subjected to critical forensic analysis - their compliance with the current situation and market trends is assessed. If mathematical calculations and general forensic analysis support each other, the resulting data are taken for use.

Political and social and economic factors

The main political and social factors that will influence the further development of the situation:

  • The Russian Federation will maintain its political course for the foreseeable future. Even with a decline in the living standards of the population, the political system will remain stable.
  • The risks of economic destabilization and social unrest in European countries are growing. Against the backdrop of economic hardships, the business environment in Europe will be characterized by increased competition and favoritism, which can be manifested in discrimination against foreign businesses.
  • Due to the high cost of energy resources, some EU countries may withdraw from the tough anti-Russian agenda. But the attitude of Poland and the Baltic States towards the Russian Federation will worsen in almost any scenario, which will create logistical barriers for the trade of “old” Europe with the Russian Federation.
  • EU sanctions contribute to the growth of Russia’s political and trade relations with China, India, Turkey, Iran, Pakistan, and other Middle Eastern and Asian countries. At the same time, these countries avoid explicit participation in the global political confrontation: they try to make the most of Russia’s turn to the east, but not to “stick a bull’s eye on the back” becoming a target for secondary US sanctions.

The main economic factors influencing the rate growth:

  • World trade has become regional, i.e. trade within and between regions. The military conflict in Ukraine contributes to the division of the world economy into geopolitical blocs with different technological standards, systems of cross-border payments, and reserve currencies. The logistics flows of raw materials and finished products are changing, and freight rates and transportation costs are rising.
  • The cost of technical and operational expenses of transport companies is going way up: equipment and its maintenance, fuel and lubricants are going up in price.
  • The growing shortage of drivers will also contribute to the increase in rates. According to the IRU, the number of unfilled job vacancies for heavy truck drivers in Europe has been growing by 40% per year for the past two years.

Rate forecast based on a linear trend model and seasonality, taking into account the retrospective

The data are presented on an annual average. In "high seasons" rates may differ by 2 or more times.

According to the forecast, in 2023 we should expect the following level of rates (selectively):

  • from/to Western, Central Europe, the Balkans to/from the Czech Republic, Slovakia – EUR 1,111 - average value, (EUR 1,027-1,196 – a range of values from the minimal to maximum values);
  • from/to Western, Central Europe, the Balkans to/from Great Britain – 2,226 (1,703-1,248);
  • from/to Western, Central Europe, the Balkans to/from Poland – 2,032 (1,698-2,365)
  • from Germany, Austria, Switzerland, and Denmark to the Russian Federation – 4,772 (3,946-5,597);
  • from the Czech Republic, Slovakia to the Russian Federation – 4,453 (3,764-5,143);
  • from Poland to the Russian Federation – 3,731 (3,024-4,438);
  • from the central part of the Russian Federation to Central and Western Europe – 6,143 (4,955-7,297);
  • from Europe to Kazakhstan, Central Asia – 11,275 (9,353-13,197).
A full report on the forecast of rates to/from/within the EU for 2023-25 can be requested by TELS GLOBAL customers from their case managers.