Since the Covid pandemic truck utilisation has fallen dramatically with a decline in drivers and a surge in empty loads going back. In August of this year, the Q2 European Road Freight Rate benchmark showed a decoupling of freight rates from demand.
With a shortage of drivers, fuel prices increasing exponentially and the ongoing war in Ukraine drove up rates. However multiple indicators also pointed to a weakening demand for road trucking across Europe, declining activity in all major economies and inflation rates weighing on consumer and business confidence.
Clemente Theotokis, co-founder of Zeus Labs made a statement to Loadstar saying that we now find ourselves in a peculiar situation to the pandemic and this is starting to normalise. “In 2020 and 2021, the pandemic and Brexit caused disruption to the supply chain, but also saw an increase in ad hoc work which organically reduced the number of empty miles being run to some degree.”
He also said that the majority of freight volume comes from large enterprises and manufacturers. However waning demand, combined with the increase in fuel prices is threatening an untenable situation for smaller trucking companies across Europe. About 70% of registered British haulage firms are owner operated, running fleets of fewer than 12 trucks, Clemente Theotokis went on to say.
Smaller fleets struggle to fill the truck for both journeys out and home, because of the time and effort it takes to locate the freight to fit their fleet. Considering additional travel delays and that cargo might not always be ready or follow the same route home as it did going out.
Empty miles have been a big factor that most companies view as an inefficiency even bringing back pallets on a knocked down price is better than nothing. With demand dropping around Europe more and more hauliers are struggling with the increased costs and less business coming through.