Road Freight Transport Rates in Europe Almost Doubled in a Year

Road transport rates in Europe grow every year so they are not likely to decrease as the main factors driving the growth will remain for a long time, write the Polish experts from platform.

According to the Metrix tool analyzing key transport indicators based on the offers from exchange platform, the average FTL transportation rate from Poland to Germany was 1160 euros in March 2022. This is around 15.2% more than in February and 17% more than in January this year. As of March, this is a 40% increase in annual quantities (!).

What are the reasons for that and what can be expected?

Fuel cost

Evidently, the driving force behind this price increase is the cost of fuel that kept steadily growing. One had to pay over PLN 5 per liter for gasoline and almost the same price for diesel in Poland a year ago, in March 2021. Diesel price increased to PLN 7.66 per liter on March 30, 2022.

Taking into consideration the global tension caused by the situation in Ukraine, there will be no significant decrease in crude oil prices that have grown record-high over the year and that determine fuel prices. Oil prices surpassed $100 per barrel, reached $130, fell to $100, rose again to $120 and stabilized below $110 per barrel – all this just in the first four weeks of hostilities in Ukraine. Such fluctuations will most likely keep fuel prices high.

Oil price volatility may result in the situation when transport rates will be updated not quarterly, but monthly or weekly.

Shortage of drivers

Another factor influencing the dynamic rate increase is the growth in transportation costs due to drivers’ wage increase. According to the Polish Central Statistical Office, driver’s average monthly salary increased by 12.4% year-on-year in February.

The wage increase is explained by the shortage of drivers in the market as there is a huge competition for professional drivers whose number is decreasing. According to the estimates of the European Commission, the European market is short of 400,000 drivers.

This acute shortage of drivers began in 2021 when the economic recovery increased the demand for transport services resulting in rate increase.

The problem with the shortage of qualified drivers will only be getting worse. The beginning of the war in Ukraine had a strong impact on Polish freight transportation. 110,000 drivers from Ukraine were engaged in Polish international transport. According to Transport and Logistics Poland, around 30% of Ukrainian drivers left to defend their homeland, while the Association of International Road Carriers (ZMPD) claims that the outflow of Ukrainian drivers is 50%.

Due to the current tension in the east, the outflow of Belarusian drivers making the second largest group of foreign drivers is possible.

What’s next?

Experts say that the situation in the transport market will be very difficult over the next few months. The accumulation of problems greatly shattered the hopes for the stabilization of the situation. But we do hope the transport market will adapt quickly to the new circumstances again, especially that the existing problems challenge the entire European economy.