The average rate for road freight transportation in Europe are growing in the 1st quarter of 2021, both year on year and quarterly, despite the 3rd wave of Covid-19.
After a slight decline in the 4th quarter of 2020, the average road freight rate in Europe is on the rise again. According to the latest edition of European Road Freight Rate Benchmark published by Upply and Transport Intelligence (Ti), it stands at € 1,118 for the 1st quarter of 2021, which represents an increase of 1.6 % YoY and 0.5% QoQ.
The latest data also shows that the lower freight rates previously seen in countries hardest hit by Covid-19 are catching up to those in less hard-hit countries. Overall, however, average rates remain below pre-pandemic levels.
Source: European Road Freight Rate Benchmark Ti/Upply - NB: These estimates are based on actual transactions. The Covid-19 epidemic and its impact on the level of activity have made data collection more complex. The freight rates mentioned for the Q1 2021 period may be subject to revision as new data is incorporated into the Upply database.
Demand remains fragile
This increase is not to be attributed to the European economy, whose recovery is long overdue. Faced with the resurgence of the virus, many countries have had to put new restriction measures in place. "Consumer confidence has suffered, leading to restrained import demand," said the Ti / Upply report.
However, the more vigorous global recovery, particularly in the United States and China, has helped support the activity of intra-European manufacturing chains.
Operational constraints reflected in rates
In contrast, several factors created disruptions in supply chains in the first quarter of 2021. To counter the 3rd wave of Covid, some countries have stepped up controls, considerably slowing down the crossing of certain intra-European borders. On the other hand, Brexit had a major impact on cross-Channel flows, which are now subject to more onerous administrative procedures. All these elements generated additional costs for the carriers, which therefore passed on them. Given the weakness of demand, however, they seem to have been cautious in changing their pricing policy at the start of the year.
The improvement of the health situation in Europe and the deployment of economic support measures should start to produce their effects. “We can therefore expect a recovery in consumption in Europe, and consequently in the demand for transport Freight rates should therefore continue to rise in Q2 2021, especially as inflationary trends on oil should also influence transport prices upwards " adds Thomas Larrieu, Upply’s Chief Data & Research Officer.
> Download the Upply / Transport Intelligence report on European road freight rates as of the 1st quarter of 2021
> Watch the webinar