Road freight transport prices in Europe showed a quarter-on-quarter decrease in the first quarter of 2025, both on the contract market and the spot market.
Once the effects of the end-of-year peak season had passed, the European road freight transport market began to decline again. In the first quarter of 2025, the Upply spot road freight rate index decreased by 3.8 points quarter-on-quarter to 134.1 points, as did the contract index, which lost 2.3 points to 131.1. However, year-on-year, the trend remains bullish: the Spot index gained 1.6 points and the contractual index 0.4 points.
Content source: Upply - NB : Our price estimates are based on actual transactions. The index may therefore be subject to revisions as new data are incorporated into the Upply database.
Outlook weighed on heavily by the trade war
After a difficult 2024, during which GDP growth in the Eurozone was limited to 0.9%, the European Commission was counting on an improvement, forecasting growth of 1.3% for 2025 last autumn. But the latest forecasts, published on May 19, show a revised trajectory significantly oriented downward, as growth is now expected to be identical to that of 2024. This drastic revision is largely explained "by the impact of the increase in customs duties and by the increased uncertainty caused by the sudden changes in US trade policy and the unpredictability of the final configuration of customs duties," explains the European Commission.
The slowdown was already being felt in the first quarter. Consumer demand remains low, and the resumption of the trade war is weakening confidence in the industrial sector. This results in a reduction in the volumes to be transported. In a context of supply exceeding demand, freight rates are decreasing, and this trend is expected to continue. “We expect lower volumes to reduce pressure on road freight rates throughout 2025 and, as cost growth has also slowed, we forecast relatively stable rates for the remainder of the year,” said Michael Clover, Head of Business Development at Ti.
Cost increases are easing
While the period of high demand had led to a sharp rise in operating costs for carriers, the economic downturn is beginning to cause this inflation to slow down.
Labour and fuel are the two main cost items. Regarding labour costs, carriers have had to agree to significant increases in driver pay over the past two years. Tensions are easing, but costs are stabilizing at a high level and in some European markets, the driver shortage is maintaining some inflation. In terms of fuel, diesel prices increased by 4.8% in the first quarter. However, they have started to fall again in recent weeks and as some countries begin to increase oil production, pressure on fuel prices is expected to remain moderate. Geopolitical tensions and the trade war are nevertheless causing some volatility in the market.
At the start of 2025, the level of demand has led to a balance of power favourable to shippers, faced with carriers who are heading into the year with a high cost base, even if inflation calms down. "The European road transport market is once again going through a complex phase, as major uncertainties weighing on global trade are likely to weaken the still fragile economic recovery. At the same time, this could also lead to an acceleration of offshoring, which could boost demand for road transport. The current balance of power remains fairly favourable to shippers, but it is prudent to ensure long-term capacity based on balanced partnerships with carriers,” warns Thomas Larrieu, CEO of Upply.
Where to learn more
> See the webinar
> Download the Supply / Transport Intelligence report on European road freight rates in the first quarter of 2025
