European Road Freight Rate Benchmark Q3 2021: European road freight rates at record highs

For the first time, Ti, Upply and IRU’s European Road Freight Rate Benchmark report, covering a range of major European countries including France, Germany, Italy, Poland and the UK, also includes data on domestic prices and Q3’s edition features data on the French market. The new data in the Upply Freight Index for France shows that domestic French freight rates are up by 3.5% year-on-year in Q3 2021, driven by the French economy’s strong recovery from Covid-19 across retail and manufacturing. French rates are also being driven up by supply side challenges similar to those seen across much of Europe, including driver shortages. Rising costs, especially fuel costs, are also a significant factor.

"We have seen a steady increase in road transport prices over the past 6 months, according to the Upply Freight Index. The imbalance between a dynamic demand for transport and a supply limited by a shortage of drivers mechanically allows carriers to increase their rates. This 5% increase over 15 months should be confirmed over the end of 2021 and the beginning of 2022. From a transport operator's point of view, this increase is necessary to cover the increase in their operating and recruitment costs. Maintaining this price level is not guaranteed and preserving their margins will be a real challenge in the coming months," adds Thomas Larrieu, Chief Executive Officer at Upply.

The latest benchmark report also tracked prices for cross-channel freight on the London to Lille lane to map the impact of factors including Brexit, driver shortages, global supply chain bottlenecks and the reopening of economies on both sides of the channel. The data shows that rates have steadily declined on UK-inbound lanes. In Q3 2021, rates from Lille to London declined 6.3% when compared to the same three months in 2020, caused largely by lower volumes crossing the channel.

Meanwhile rates from London to Lille are 9.6% higher in Q3 2021 year-on-year. However, the data reveals the majority of this rise occurred during the months immediately after Brexit and has since persisted. Volumes on UK inbound lanes are likely to increase in Q4 as importers stock up ahead of the implementation of Brexit import rules in January 2022 and this is expected to exert upward pressure on rates to the UK over the quarter.

“In Q3 2021 we started to see cracks appear in supply chains across Europe as a mix of supply- and demand-side challenges impacted the movement of goods in the region. The challenges have been more pronounced in certain locations, and certainly in the UK, but the effects are creating upwards pressure on rates. Heading into peak season and with the addition of rising costs, particularly higher diesel prices, all the ingredients for a period of sustained rate inflation are in place,” said Nick Bailey, Head of Research at Ti.

Vincent Erard, IRU’s Director of Corporate Services, said ”We’re delighted to join with our partners Ti and Upply on making these important European road freight pricing trends more accessible. IRU works across supply chains on issues that cause, or are impacted by, freight rates – including fuel prices, decarbonisation, technology, digitalisation, driver shortage and trade policy. Putting pricing trends into the context of these wider industry issues gives logistics businesses a unique perspective on the past and the future.”