European road transport costs soar

24 August 2010

24 August 2010 | Angeline Albert

European road transport prices rose by 13.5 per cent in the second quarter of this year, research from consultancy firm Capgemini has found.

Costs increased dramatically in quarter two compared with the first three months of this year, the Transport Market Monitor (TMM) shows.

For the first time since the economic downturn, the price of transport services has equalled pre-recession levels. A significant increase in demand is one of the main reasons for the rise in costs, Capgemini said.

Figures show that higher sales, increasing production volumes and shippers restocking their supply chains led to a 44 per cent fall in the capacity index – which measures the number of bids made in response to transport tenders – in quarter two compared with quarter one.

Steve Wilson, UK vice-president of supply chain and logistics at Capgemini Consulting, said: “We expect rates to continue to rise, partly in response to tightening supply and partly from input cost inflation percolating through – principally from driver wage increases and fuel cost inflation.”

“Increased transportation costs from third-party logistics firms will raise prices for companies shipping goods without a dedicated fleet,” said Wilson.

“We’d expect to see a particular effect on construction firms and air freight – both of which are under intense economic pressure at the moment. After years of falling costs, reduced capacity from third-party shipping firms could see the price per tonne of goods shipped in the UK rise by as much as 4 to 6 per cent by the end of the year.”

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