The price of transporting goods across Europe is set to jump by more than a third as higher oil prices and stricter regulation drive cost inflation, the region’s biggest independent trucker said.
Even as demand rises for long-haul international carriages, trucking firms face spiraling bills for diesel fuel, higher wages, vehicle purchases and new European Union rules that limit driver mobility, according to Girteka Logistics Uab. The onslaught of factors could spur a cost increase of up to 35% from levels in mid-2020, the Lithuanian firm said.
“As economies continue to open up, the inflation-heavy environment will lead to additional headaches for transport operators throughout Europe,” Girteka’s marketing chief, Simonas Bartkus, told Bloomberg News. “We are anticipating an even more volatile pricing environment going forward.”
Rising fuel prices have led to “some difficult conversations with customers,” Bartkus said. Supply-chain bottlenecks during the Covid-19 pandemic have also affected the operating environment.
The EU’s Mobility Package is designed to encourage competition, make the logistics industry more fair to workers and improve its environmental record.
But it will compel trucks to return to base every eight weeks, boosting fuel consumption and the number of empty kilometers driven, Bartkus said. That could create a lack of capacity in some countries, requiring larger fleets and further spurring diesel demand.
Still, Girteka’s fuel consumption had been going down as it deployed new technology and encouraged drivers to maximize efficiency while on the road.
The company aims to expand its fleet from 9,000 trucks to 10,500 by the end of 2022 to be ready for the recovery, after placing an order for 2,000 Volvo AB FH vehicles from the Swedish manufacturer in February last year.
Trucking is attractive, with container shipping giant A.P. Moller-Maersk A/S expanding into the segment as a boom in ocean rates subsides. The Danish firm agreed Wednesday to buy Pennsylvania-based Pilot Freight Services LLC for $1.68 billion, shoring up its road-transport business in North America.
In December, Geneva-based MSC Mediterranean Shipping Co. offered to buy the African transport and logistics business of France’s Bollore SA in December for 5.7 billion euros ($6.5 billion).