Multiplying The Price Of Transport: The Reasons For The Increase

The Covid-19 crisis and fuel shortages have significantly reshuffled the cards of global freight. Thus, since the second half of 2020, the logistics chain has been suffering the consequences of successive lockdowns, port strikes, congestion on maritime routes, the lack of truck drivers, etc. These result in the increase and multiplication of the price of transporting goods, especially when they use the seas and oceans.

State of play of the freight transport market

The transport market faces several challenges. It must make its ecological transition in order to reduce its greenhouse gas emissions while responding to the constant pressure of demand, itself supported by the considerable growth of e-commerce. Online sales are also leading companies to review their logistics and delivery methods.

The transport of goods thus beats all records of activity. However, the sea route remains privileged for international trade. But since the end of 2020, the price of transporting a container has multiplied by 5. According to the Freightos Baltoc Index, the average cost of renting a container rose from $2,240 in 2019 to $9,950 at the end of 2020.

This inflation is even more pronounced on the most strategic trade routes, namely those linking the east of the Asian continent to the American west coast.

The reasons for the increase in sea, air and road freight prices

Since the beginning of the pandemic, the price of renting a standard container has increased by 650%. There are several reasons for this record rise in the cost of maritime freight transport, which is also leading to a surge in prices. Among them, the COVID-19 crisis, which has led to the slowdown or even the outright shutdown of several ports of global importance, particularly in China. The country’s largest port terminal, Yantian, ceased all activity for 2 weeks in May 2021, permanently curbing international trade.

Also, this sector has been strongly impacted by the rise in fuel prices and inflation, which has been particularly harmful for transport. In addition, this price increase is also explained by the increase in vehicle ownership costs (8% in 2021) and by the surge in toll prices for road transport throughout 2022. This phenomenon is observed throughout the euro area where inflation has reached a record level of 8.6%. (source: auto-info)

An average cost increase of 8.8% in 2023

Despite the economic uncertainties, the CNR risks forecasts for 2023. It anticipates an increase in the full cost price of heavy goods vehicles of around +8.8%, on an annual average.

The reasons? The increase in the personal driving position, the cost of which is estimated at +12.7% on average annually (salaries and expenses), the probable growth in maintenance (+6.6%), the increase in tolls of +4.6% and the costs of holding equipment: +4.3%.