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Europe / Trucking Industry UK / Uncategorised

European truck rates continue to rise

European truck rates continue to rise

The cost of trucking is on the up for European shippers. The combination of not enough drivers and rising fuel prices has left shippers in Europe paying more for trucking.

Rail operators and the European Union have been working to attract containers needing long hauls from road to rail, but still the truck rates rise.

Looking at the figures, trucking rates have fallen since they reached a ten-year high at the end of last year. However, according to Capgemini’s latest Transport Market Monitor, rates were 7.1% higher in Q1 this year compared to Q1 a year ago.

For those in the industry, trucking can feel like the poor cousin of containerised rail. It receives minimal government attention, and transport providers’ earnings are now being driven by tightened capacity caused by higher demand and these rising rates.

Bernhard Simon, CEO of German logistics company Dascher explained that capacity bottlenecks and driver shortages are the main barriers to potential growth in the future. For Dascher, training new drivers has become the number one priority. 22 new recruits completed training courses last year, with another 106 starting courses at locations across Germany this year.

Another major contributor to the cost increases is the competition posed by Eastern European companies. With lower operating costs, these companies are working hard to boost their presence in western markets – despite facing exactly the same challenges as West European countries of fewer drivers and higher wages.

As if this wasn’t enough, there’s also the news that Germany is to increase toll rates on heavy goods vehicles and extend the toll highways in January next year. It has been estimated that this will cost the industry about €2.5 billion in additional costs every year.

But there has been some good news for trucking. The strike in France by the state-owned railway company SNCF, which started in April, has meant shippers are seeking alternative road transport options. Meanwhile, industrial disputes in APM terminals in Gothenburg has also benefited the industry as shippers have been forced to use trucks to transport cargo to other ports for shipment.

The industry had another boost when Italy’s new Deputy Prime Minister voiced concerns about the proposed 57 km rail tunnel from Turin to Lyon that threatens to cut the 2.6 million trucks crossing the Alps each year by half.

For longer distances, inland shipping and rail have long been more attractive options, but at least some of these journeys often needs to be by truck.

According to the Rotterdam Port Authority: “Road transport remains indispensable in intermodal logistics planning. The first or last part of a delivery often requires some road transport, for example to go from the inland terminal to the final destination.

“Transport by trucks is also highly flexible and often serves as a backup modality if something goes wrong with transport by rail or via inland shipping.”

The ongoing barge congestion at the Port of Antwerp, Europe’s leading container port has also offered up additional business for trucks.

For all the challenges faced by the industry, in many ways the future of trucking looks good. How does it feel behind the wheel?

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