Road freight rates across Europe continued their downward trend in Q1 2025, reflecting a complex interplay of stagnant demand, stabilising but still elevated operating costs, and geopolitical uncertainty, according to the latest Road Freight Index compiled by Upply, IRU and Transport Intelligence (Ti).
While modest green shoots are visible in industrial production and retail recovery in specific markets, these remain insufficient to reverse the broader rate softening. Particularly noteworthy are developments on key corridors involving Germany, Poland, France and other intra-European routes.
According to the benchmark index, contract rates in Q1 2025 fell to 131.1, marking the steepest quarterly decline since Q3 2023. Although rates remain slightly higher than a year ago, the 2.3-point fall from Q4 2024 highlights persistent weak demand. Spot rates have also decreased sharply—down 3.8 points to 134.1—closing the gap with contract rates to just 3 points.
This contraction is largely attributed to sluggish post-peak consumer activity. Eurostat reports only a 0.6% quarter-on-quarter increase in household spending, and 74% of consumers continue to “trade down” to cheaper alternatives. Industrial sentiment has improved modestly, but new export orders remain weak across much of the euro area.
Corridor volumes: early signs of rebound but below trend
Trade volumes along major road corridors such as Germany–France and Germany–Poland began to recover in early 2025 following a muted Q4 2024. Germany posted a 1.0% increase in industrial production between December and February, while Poland and France registered 0.7% and 0.5% rises, respectively. However, volumes on these corridors remain below year-ago levels.
Notably, road freight between Poland and Germany continues to be a crucial barometer of Central European logistics activity. The Warsaw–Duisburg contract rate index dipped 3.3 points quarter-on-quarter but remains significantly higher year-on-year (+7.3), suggesting more stable long-term demand for structured transport capacity in the region.
Diverging international lane dynamics
While nearly all contract rates on international routes declined quarter-on-quarter, the Warsaw–Duisburg and Milan–Warsaw routes stand out for their resilience. The latter fell only marginally and posted a 2.3-point increase year-on-year. In contrast, France-to-Germany and Lyon–Birmingham corridors witnessed more significant contractions, underlining the broader West European industrial malaise.
| Route | Rate Type | Index Points | €/km | QoQ Change (points) | YoY Change (points) |
| Warsaw–Duisburg (PL–DE) | Contract | 148.7 | 1.27 | -3.3 | 7.3 |
| Duisburg–Lille (DE–FR) | Contract | 126.5 | 2.07 | -3.1 | -3.5 |
| Lyon–Birmingham (FR–UK) | Contract | 129.4 | 2.01 | -4 | -3 |
| Milan–Warsaw (IT–PL) | Contract | 114.1 | 1.12 | -2.2 | 2.3 |
| Warsaw–Duisburg (PL–DE) | Spot | 143.3 | 1.29 | -11.3 | 5.6 |
| Milan–Warsaw (IT–PL) | Spot | 128.4 | 1.31 | 6.3 | 4.2 |
| Madrid–Paris (ES–FR) | Spot | 138.5 | 1.28 | 4.8 | 4.8 |
Spot rates tell a more fragmented story. While Warsaw–Duisburg experienced an 11.3-point drop, Madrid–Paris rose by 4.8 points, buoyed by Spain’s relatively strong domestic economy. Spot rates between Milan and Warsaw also rose by over 6 points, driven partly by shifting supply chains in response to tariff risks.
Domestic markets: Spain stands out amid general weakness
Domestic spot rates fell in Germany (–4.2 QoQ) and Italy (–3.5 QoQ), while France saw only a modest increase. The standout performer was Spain, where domestic spot rates increased 3.5 points month-on-month and 14.4 points year-on-year. Spain’s economy, supported by robust consumption and recovery funds, expanded by 3.2% in 2024—one of the highest growth rates in the EU.
| Country | Index Points (Q1 2025) | Month-on-Month Change (points) | Quarter-on-Quarter Change (points) | Year-on-Year Change (points) |
| Germany | 122.4 | -14.8 | -4.2 | -6.8 |
| Spain | 137.1 | 3.5 | -2.6 | 14.4 |
| Italy | 111.6 | -0.5 | -3.5 | 7.1 |
| France | 128.8 | (N/A) | -0.5 |
By contrast, Germany’s domestic market remains subdued, with retail sales and industrial orders still recovering from two consecutive years of negative GDP growth. Domestic contract rates in Germany fell 2.8 points in March, though they are up 10.2 points year-on-year.
Cost structures and supply pressures
Despite recent diesel price volatility—up 4.8% QoQ but down 3.5% YoY—costs remain historically high. Maintenance, tolls and tyres have continued their gradual rise, albeit at slower rates. Germany and Poland are facing significant structural pressures: Germany due to its energy-intensive export sector, and Poland due to rising labour costs (+500 EUR/month in Lombardy, for example) and toll adjustments.
The introduction of the smart tachograph G2V2, now mandated by August 2025, is raising truck prices across the EU, especially in Germany and Poland. Combined with a 16% fall in new HGV registrations and a chronic driver shortage—426,000 unfilled positions across Europe—the supply side remains fragile.
Political and economic headwinds
Trade tensions and the prospect of wider tariffs continue to weigh on industry expectations. The EU automotive sector, particularly in Germany and Italy, faces headwinds from US tariffs, which could cut vehicle export volumes by up to 7%. This has direct implications for high-volume freight corridors such as Milan–Warsaw and routes connecting to ports in Rotterdam and Antwerp.
In France, the ecotax proposed in Alsace—targeting the A35 corridor used to avoid German tolls—may reshape regional flows post-2027. The broader rollout of Eurovignette reforms, including CO₂-based tolling in the Netherlands and Sweden, is likely to increase route costs and alter competitiveness.
The way forward: regionalisation and strategic flexibility
As global uncertainty persists, European businesses are increasingly pivoting towards regionalisation, explains the report. The “Buy European” movement and strengthened local production—particularly in the automotive sector—could lend medium-term support to contract rates. Volkswagen’s ID.4, now outselling Tesla’s Model Y, is a case in point. Meanwhile, retailers across Europe are beginning to label EU-made products, further embedding the regional supply shift.
However, in the short term, flexible spot arrangements are likely to gain ground over fixed contracts, especially where tariffs and political risks cloud future demand. Transport operators serving the German–Polish and French–German corridors should anticipate continued margin pressure but also potential rate rebounds as macroeconomic conditions stabilise.
