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The Upply x Ti x IRU European road freight rates index shows that Q2 rates fell in the contract index by 1.3 points quarter on quarter (q-o-q). In contrast, the spot rate index rose by 3.5 points q-o-q. Year on year (y-o-y), the spot index is now up slightly by 0.8 points, while the contract index is down 0.7 points.
Low levels of consumer demand have pushed down spot rates since Q2 2023. However, spot rates have begun to normalise, as the demand environment is now less negative. Adjusted retail sales, excluding motor vehicles in the euro area, have improved only marginally q-o-q (0.3%). The increase was similar y-o-y (0.4%).
In the EU, industrial production saw a 1% decrease for intermediate goods and a 2.1% decline for durable consumer goods in May 2024 compared to the previous month. Non-durable consumer goods rose by 0.8%. The lack of industrial demand contributed to the contract index dropping by 1.3 points q-o-q.
Operating costs have increased q-o-q, especially for labour, maintenance and insurance. Average costs have risen across the board, with the average growth being 1.2% for the EU. Most notably, labour and vehicle insurance costs have increased by 1.2% and 3%, respectively. However, the increases are not as steep as in the last quarter, where labour costs increased 1.8% and spares rose 1.1% (versus 0.5% this quarter). We can therefore observe the effects of supply-side pressure easing on both spot and contract rates.
Diesel prices fell between April and June, driven by declining crude oil prices. The EU weighted average diesel price reached EUR 1.07 per litre on 10 June, down from EUR 1.20 per litre on 8 April (-11%), the lowest level since summer 2023. Diesel prices have increased since, pushed up by rising crude oil prices, with the EU weighted average diesel price reaching EUR 1.14 per litre on 8 July (+6.4% versus 10 June). Read more
Source: IRU
