Both European overall spot rates and contract rates rose quarter on quarter but fell year on year. Despite relatively weak demand across Europe, 2025 rates will continue on a moderate upwards trend, mostly due to constrained capacity and rising costs.
In terms consumer demand, the outlook is positive, as inflation is slowing, and real incomes are expected to improve, leading to a gradual recovery in demand across Europe, putting upwards pressure on rates,
Industry demand is shifting, as companies are increasingly moving production and shipping to Poland, Romania, and Türkiye to mitigate risks and reduce costs. This shift is expected to shape transport demand in the medium to long term across routes.
According to the European commission, interest rates are forecast to be cut (125 basis points by the end of 2025) to stimulate economic recovery. However, slow manufacturing sector growth and cautious consumer spending may constrain overall expansion, therefore the outlook remains cautiously positive, and industry demand might excerpt upwards pressure on rates.
Costs remain elevated, buoying road freight rates upwards, this is due to a number of factors, including regulatory and environmental changes. The Eurovignette Directive will implement additional road tolls based on CO2 emissions. And in the longer term, the ETS II (Emissions Trading System for road transport) begins in 2027, increasing fossil fuel prices. In the medium to short term, new CO2 standards for heavy trucks from July 2025 will require lower emissions, raising manufacturing costs.
Labour costs and driver shortages are also contributing to the higher cost base, as persistent driver shortages (500,000 vacancies in the EU) will continue driving up wages and overall freight rates. In addition, several countries, including Denmark, Poland, and Belgium, will implement or expand CO2-based tolling systems in 2025, increasing costs.
Tyre costs are still set to have an upwards pressure on rates, as EU regulations have banned non-compliant natural rubber imports at the end of 2024. This ban will extend to SMEs this year.
New EU truck registrations declined by 6.3% in 2024, totaling 327,896 units. The drop was primarily due to an 8.5% decline in heavy-truck sales, offset by a 5.6% increase in medium-truck registrations. Diesel trucks remained dominant, comprising 95.1% of new registrations despite a 6.2% decline. Electrically chargeable truck registrations fell by 4.6%, according to the ACEA.
Rising costs in fuel, tolls, and labour are expected to push contract freight rates higher in the medium to long term. The European road freight market will be affected by weak demand, regulatory changes, cost pressures, and evolving supply chain trends. In 2025, moderate rate increases are anticipated alongside shifts in transport demand and compliance challenges.
GSCi’s new European Road Freight Rate Outlook provides quarterly updates on road freight rate expectations and developments. Contact us to preview the outlook grid.
For your logistics and transportation management needs
Providing high frequency logistics and supply chain data and analysis for all those invested in the industry.