Shippers will pay less for freight?

Author: Konrad Potocki

As recently calculated by the Belgian Institute for Road Transport and Logistics (ITLB), the cost of doing business for transport companies in Europe will rise significantly again in 2023.

Experts estimate that actual costs will increase by 12-13.5%, and much depends on the transport destinations. Small and mid-sized EU carriers have faced a difficult task. Why? Because demand for capacity is falling, and freight price increases may further discourage manufacturing and trading companies from using transport companies.

Indeed, the forecasts for the transport market in 2023 are not the best. According to Transport Intelligence forecasts, international transport in Europe will only grow by 1.1% in 2023. Above average will be the emerging markets (e.g. Croatia, Bulgaria), while the Old EU countries, which include e.g. Spain, Italy and France, will develop more slowly (in Germany, even negative growth is predicted). An even weaker rate is expected for domestic transport (0.7%).

What accounts for the higher operating costs for carriers this year?

➡ Salary adjustments in EU countries (drivers)
➡ 25% increase in vehicle purchase prices,
➡ Increase in German road tolls in 2023,
➡ 2% increase in road tolls in France, Italy and Spain,
➡ Increase in insurance premiums,
➡ Estimated congestion costs, calculated on the basis of the average of the last 5 years (traffic jams on the motorway, waiting in front of a warehouse).

Among the factors affecting the freight rate, fuel prices were missing. Diesel prices appear to have been stable for several months, but much could change after 5 February this year, when the embargo on energy supplies from Russia comes into effect. However, all indications are that shippers will not pay more for freight as capacity supply begins to overwhelm demand.