Rates for the transport of goods in Europe are reaching record levels, and experts warn that in the near future they should be prepared for an increase of another 10%. Contrary to what some people think, this is not a cause for joy for the transport industry.
According to The Ti, Upply & IRU report for the third quarter of 2022, contract rates increased year-on-year by 19.6 points and reached 127.9 points. An even greater increase (26.4 points) was recorded on the spot market, where rates reached the level of 142.6 points.
WHAT PUSHES PRICES TO INCREASES?
The increase in prices is strongly related to the increase in costs, as is often the case in transport. Thus, the weighted average price of diesel in the European Union was EUR 1.5 at the beginning of the year. In the first half of November, it was already approaching the limit of 2 euros. Until now, it was assumed that fuel costs accounted for about 1/3 of operating costs for transport companies. Now, voices can be heard from many sides that at the current prices, this share reaches even 50%!
Diesel fuel is not the only cost that has recently gone up for transport companies. Inflation in more than half of the euro area countries reached double-digits after the holidays. The average for the entire European Union was 9.9% in September. The price increase in Germany was even higher at that time and reached 10.9%.
All sectors of the economy suffer from inflation, and so does our industry. Prices are rising, which translates into an increase in transport rates, but not in the margin level. To put it simply – you pay more for transport because we incur higher costs, not because we earn more.
And yet it should be remembered that the TSL industry is still struggling with its own problems – driver shortages, changes caused by the implementation of the so-called of the Mobility Package or the war beyond our eastern border. As long as diesel prices do not go down, there is no reason to expect that we will pay less for transport in the near future. And this even when the European economy is struggling with recession.
WHERE ARE THE REASONS FOR OPTIMISM?
However, this does not mean that the situation of the transport industry is bad. Transport companies are still developing, despite all the difficulties we wrote about above. The European transport sector, even taking into account a clear slowdown, should grow at a rate of 1.1% next year. Of course, this is clearly less than in recent years, but still a plus.
We are aware that we are the lifeblood of the economy as an industry. All imperfections in our functioning will immediately translate into its condition – both on a national and continental scale. Maybe that’s why transport attracts such fantastic, ambitious people who manage in a difficult environment and allow companies like ours to record better and better results year after year, despite many objective difficulties.
We are aware of the difficulties that await us all in 2023. Despite this, we enter it with optimism, confident that once again we will deliver your cargo safely on time and at a good price.
Don’t you work with us yet and want to see if it’s worth it? Send an inquiry to order@vega-transport.com to receive an offer and… perhaps start a beautiful journey with our company.
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