Road haulage capacity in Europe hits ten-year high

Road haulage capacity in Europe hits ten-year high

Road haulage capacity in Europe has increased to a new ten-year high, according the latest data from logistics consultancy TIM Consult, a spin-off from logistics software provider Transporeon. 

According to TIM Consult's latest Transport Market Monitor, an additional 14.9 per cent of transport capacity was available from January to March this year, compared to the same period in 2018. 

Oliver Kahrs, Managing Director, TIM Consult: "The strong increase in available transport capacity that we monitored in recent months is initial evidence of a slowdown in economic growth.”

In addition, transport prices were 8.4% lower in Q1 2019 compared to Q4 2018, partly due to a significant decline in diesel prices. However, even if transport prices dropped sharply in the first quarter, they remain relatively high compared to recent quarters, said Jan Rzehak, Director of Business Consulting, Transporeon. 

"The transport price index for Q1 2019 is 1.3% higher than it was in Q1 2018. But this year prices should have been lower than at the start of 2018, as this year 14.9% additional freight capacity was available.”

As more and more transport capacity comes on-line, the price difference between the cheapest and the most expensive offer per transport order on the spot market is also increasing, continued Rzehak: 

"For seasonal reasons, the available transport capacity usually is greater in the first months of a year. Therefore, the price difference in the first quarter tends to be higher. In 2019, however, with 25% it was particularly large. Shippers are therefore likely to have benefited from more favourable prices placing their transport offers on the spot market. 

“To observe as huge differences between the highest and lowest offer per transport order we have to go back to Q4 2009. This was the first year, when the European Union recorded negative growth in the wake of the banking and economic crisis. In view of the current economic development, the price difference is likely to remain above average in upcoming months. Therefore, transport assignment on the spot market will remain highly attractive.”

Commenting, Philip Stephenson, chairman of the Davies Turner Group, said his company’s own experience agrees with the survey results in that the strong growth in European freight volumes in recent years is showing signs of slowing down in 2019.

“One year ago European haulage capacity was very tight, especially in Germany, while now there is currently the capacity to handle demand, despite the well-publicised driver shortages.

“We have also noted that haulage prices in the first quarter of 2019 were higher than in the first quarter of 2018. That is not surprising, despite the situation regarding supply and demand, as we are seeing a much-needed catch up in pricing, as underlying operational costs continue to increase strongly due to driver shortages pushing up employment costs. Road tolls and fuel prices are increasing.

“Past experience does tell us that for seasonal reasons, the available overland transport capacity usually is greater in the first months of a year. 

“Many of the shippers that rely on our daily European trailer services are moving their goods on a contract basis, and value the guaranteed services that we offer. As a result our own freight volumes and market share show continued healthy growth.”