Following the dramatic shortage of transport capacity in the European road freight market observed since autumn 2017, the index recorded double-digit growth in the third quarter of this year. However, this did not significantly affect transport prices, which fell by only 2.8% compared to the previous quarter. Moreover, despite the fact that transport capacity this summer was significantly higher than during the 2017 holiday season, transport in Q3 of this year was as much as 3% more expensive compared to the same period last year, according to the 37th edition of the Transport Market Monitor (TMM), prepared by Transporeon Group and TIM Consult.
Key report highlights:
• In the third quarter of 2018, the transport capacity index reached 81.2, which means an increase of 15.8% compared to the previous quarter of this year. Compared to the third quarter of 2017 (67.4), this index increased by as much as 20.4%.
• In the third quarter of 2018, the price index was 104.9, which means a decrease of 2.8% compared to the second quarter of this year. However, it is 3% higher compared to the same period in 2017.
• The diesel price index increased by 4% compared to the previous quarter of this year.
The latest edition of TMM shows that transport capacity in the road freight market has been successively increasing since May of this year.
– Although a similar situation occurred in 2017, this year’s increase in transport capacity is significantly greater than it was then. As expected, the index reached its highest values in the summer months – from June to August. In September, it fell to the level of June – so it was not as significant a drop as it was last year. Comparing the situation in 2017-2018, we can therefore see a significant difference – explains Jan Rzehak, Director of Business Consulting at Transporeon Group.
– The successive increase in the transport capacity index means that it is returning to the level from before 2017, when the market situation was better. One of the reasons may be the slowdown in economic growth. According to Eurostat data, industrial production in the eurozone fell by 0.3% between August and September of this year. The European Commission has also lowered its economic growth forecasts for the eurozone for next year – this applies in particular to France, Germany, and highly indebted Italy. Furthermore, the German Council of Economic Experts points out that the situation in the third quarter of this year deteriorated due to problems in the automotive industry related to the implementation of the WLTP (Worldwide Harmonized Light Vehicle Test Procedure) CO2 emission testing procedure – says Oliver Kahrs, Managing Director at TIM Consult.
In the face of rising diesel prices, the decline in transport prices is slow.
Although the market situation regarding transport capacity has improved, transport prices have fallen only slightly.
– Since June, they have been gradually reaching the 2017 level. However, at that time, carriers took advantage of the shortage of transport capacity to significantly increase the prices of their services. Although transport capacity has recently increased, transport costs remain at an elevated level. This may be due to the rise in diesel prices. The latest edition of the TMM report shows that the diesel price index increased in the third quarter of 2018 by 4% compared to the second quarter of this year – says Oliver Kahrs.
According to experts from Transporeon Group and TIM Consult, transport capacity increased even further in October and November, while transport prices remained high.
– This is the result of our analyses conducted over the last two months based on data from the Transporeon platform. We present these results in the Transport Market Radar publication, which we issue monthly for logistics industry representatives – adds Jan Rzehak.
The TMM report is created based on information from the Transporeon platform and is published quarterly. It presents data on the market situation on a quarterly basis, as well as changes in transport capacity and transport prices over the last 12 months and longer. TMR, on the other hand, presents the results of monthly analyses of transport capacity and prices. Both publications – TMM available for free and TMR for a fee – can be subscribed to via the website www.transporeon.com.