The European transport industry in 2022 was characterised by a demand recovery after the sanitary crisis and also by an increase of the tariffs, but in the same time by a significant increase of the transport costs, especially because of the war in Ukraine. Most of all, the level of unpredictability was even higher than the years before and this also applies to transport volumes – not only to the whole economy – which fluctuated in case of many companies and started to reduce in the end of 2022. This new situation forced the tariffs to decrease also, but not too much because the costs and the inflation were bigger than ever. That’s why most of the transport firms in Europe, including in Romania, had much higher turnovers than in 2021, but not necessarily much higher profits.
According to a Ti/Upply/IRU analysis, at the end of 2022, the diesel average price was 21.5% higher than in January 2022, and in the beginning of 2023, it fell by about 14.5%.
As you remember, many European governments have supported in 2022 the road transporters through reductions of the diesel price. France has allocated 600 million euros for reduction schemes, including a reduction of €0.15/l excluding VAT, in Netherlands the excise duty rate has been reduced to €0.111/l, in Spain there was a €0.20/l reduction etc. In many cases, these measures ended in 2023, but in the meantime the diesel price decreased.
Even with these reductions, the diesel in Spain was 38% more expensive in July 2022 – when it reached its highest value, €2.03/l – than in January 2022, and in 2023 was still 21,1% higher than in January 2022. In Germany the average price at the end of 2022 was 23% above the price in January 2022, and in the United Kingdom it reached €2.12/l, 17.4% above the level in January 2022.
As for the inflation in the euro area, it peaked at 10.6% in October 2022. One of the highest values among EU countries were registered in Poland, 17.9% at the beginning of the fourth quarter in 2022.
The cost of transport in 2022 increased above any expectations
According to an analysis of the National Road Committee in France (CNR), the costs for the long-distance transport companies in this country increased in 2021 by 5.2%, mainly due to the 3.6% increase in maintenance and repairs. For 2022, the increase in costs due to the diesel price was initially estimated at 3.4-4.6% compared to 2021, but 2022 brought some almost impossible to predict challenges, like the war in Ukraine, so this estimation did not stand.
The average gross remuneration of drivers increased by 9.7% compared to 2021 and the cost of allowances by 7.9%. In 2022, the cost of drivers accounted for 34.2% of the total operating cost for a vehicle, and the average monthly remuneration of a full-time long-distance driver was €2,916, 23.3% higher than 10 years ago, amid an average annual increase of 2.1%.
The fuel cost/km increased by 21.5% compared to 2021, reaching from €0.339 to €0.412, the cost of the tires by 6.9%, from €0.029 to €0.031, the cost with maintenance and repairs by 15.4%, from €0.078 to €0.090, the cost of the road taxes by 4.6%, from 9,968 to 10,429 euros/year, the cost with the purchase of the truck by 6.2%, from €92,656 to €98,381, the cost with the purchase of the semi-trailer by 11.9%, from €29,167 to €32,627, and the cost with insurance by 1.9%, from 2,752 to 2,804 euros/year.
Another study, realised by Panteia, in Netherlands, says that the increase of the transport costs in 2022 was around 20% higher than the estimated increase. In terms of fuel, Panteia expected an increase of 3.6-5.1% for cross-border transport, and in reality, it was 8.5-16.0%, in terms of insurance Panteia expected an increase by 9.4% and it was 16.6%, and in terms of tires, Panteia expected a 3.9% increase, and in reality, it was 22.9%.
In the end of 2022, the spot tariffs decreased for the first time after the beginning of 2020…
These new costs increased the transport tariffs in 2022, but in the last part of the year the transport volumes decreased a lot, so the tariffs (especially on the spot market, because the tariffs in the contracts continued to be high for a while, due to the high costs and the high driver’s crisis) were between these two trends and started to decrease. The Upply spot index was 142.1 points in the last quarter of 2022 (when we had the first decrease compared to the previous quarter since the first quarter of 2020), 18.1 points above the same period of 2021, while the contract transport price was 19.0 points higher than in the end of 2021.
One of the causes of the spot tariff fall is the falling demand, caused by the inflation that reduced the consumer confidence to record levels and raised the prices of the goods. Another important cause is the high energy price that made the European producers less competitive globally. For example, the production in France and Germany in 2022 was below the level in 2019.
… but they were still much higher than in 2021
Despite the decrease of the tariffs compared to the third trimester of 2022, the transport price was higher than in the end of 2021 for all the main routes in Europe, according to the same Upply analysis. From Madrid to Paris the average tariff in transport contracts was € 1,461 (€1.15/km), 9.1% higher than in the end of 2021, and the spot one was €1,770 (€1.40/km), 20.7% higher than in the end of 2021. And from Paris to Madrid the increase was 7.5% and 8.6% respectively. Many industries in Spain decreased the production, except the automotive industry, which increased by 7.3% compared to 2021, because the problems with the components were solved.
The tariff increase from Warsaw to Duisburg was 27.6% and 39.6% for contracts and spot respectively compared to the end of 2021: €1,532 (€1.42/km), an all-time record, and €1,865 (€1.73/km). And from Duisburg to Warsaw the spot tariff increased by 8.8%, till €1,517 (€1.40/km) and the contract tariffs by 15.4%, till €1,200 (€1.11/km).
According to the statistics institute in Germany, Destatis, in the beginning of 2022, the German factories had the most orders since 1970, but the volumes fell 5.5% in November, more than 0.5%, as estimated by the economic analysts. According to Destatis, orders failed because of the low domestic and international demand. During 2022, the orders for German products remained high, including due to the fact that they were delivered late, but in the meantime this problem has been solved and the volumes are decreasing.
In the same time, Polish manufacturers absorbed the rising costs to keep their business at a high level and the information from the statistical institute shows that the production has been steadily increasing throughout 2022.
From Duisburg to Lille, the average contract tariff was €749 (€2.48/km), 28.3% higher than in the end of 2021, and the average spot tariff was €846 (€2.80/km), 15.4% higher than in the end of 2021. On the backhaul the tariff were €513 and €574 respectively, 16.3% and 10.2% respectively higher than in the end of 2021.
The increase to/from Great Britain was 5.4 points for the contract tariff and 5.1 for the spot tariff for import and 17.1 and 24.5 points respectively for export. The UK car production in 2022 fell to its lowest levels since 1992 and was 200,000 units below the 2019 level and the registrations were at their lowest level in three decades. Another problem the country has faced was that the delays and the higher costs have damaged its reputation, which is why many European customers have chosen to purchase products elsewhere.
The transport price for the exports from Germany was 24.1 points higher than in the end of 2021 for contracts and 10.2 higher for the spot market, while the imports costed 25.8 points more for contracts and 35.1 points more for the spot market.
A big problem Germany had in 2022 – and it is possible to also appear in the future – was that the low levels of the Rhine in summer transferred to road many goods that were previously transported by waterways, leading to higher tariffs. But in the last quarter of 2022 the water level was normal, affecting the tariffs in reverse.
