European road freight rates fall

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Road freight rates on key international routes in Western Europe have fallen by seven per cent over past five months – after rising by 20 per cent in two years, according to a new international road freight index compiled by Transport Intelligence.

By the end of May 2012, the index was 21.2 per cent higher than in May 2010, the starting point for the index. After this date, however, rates have fallen consistently.

The index is based on actual transactions settled in euros using data provided by Freightex, the European freight service provider.

It shows that road freight rates have fallen seven per cent in the past five months from their peak.

TI said the price rises up to May 2012 had several factors behind them. “Firstly, the market was undergoing a substantial ‘bounce-back’ from the crisis point of 2009, when prices crashed. Quantifying the effect of this is difficult as rather than settle back to equilibrium, prices have remained volatile. This volatility appears to be a structural issue, both in terms of demand and supply in the market.

“It would seem likely that the fall in prices over the past few months has been driven by falling demand, while capacity has yet to re-adjust.”

TI chief John Manners-Bell said: “Visibility of international road freight rates in Europe has historically been very poor. At this time of economic volatility and uncertainty, we are delighted to be able to partner with Freightex to provide the industry with an increased level of insight into the market.”

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