While road transport capacities in Europe – following dramatic shortages since autumn 2017 – again increased at double-digit rates in Q3, transport prices declined by only 2.8%. This is despite the fact that significantly more capacity was observed in the market during the summer. Transport rates in Q3 2018 increased 3% over the same period last year. This data is obtained from the 37th edition of the Transport Market Monitor (TMM) by Transporeon and TIM CONSULT. Here are the key findings:
- In Q3 2018, with a capacity index of 81.2, available transport capacity increased by 15.8% compared to the previous quarter and by 20.4% compared to Q3 2017 (index 67.4).
- The price index decreased in Q3 2018 to 104.9, a drop of 2.8% compared to Q2 2018 and an increase of 3% compared to Q3 2017.
- The diesel index in Q3 2018 showed an increase of 4% compared to Q2 2018.
A closer look at the report shows that, since May, available capacity for road transports has recovered month by month. “Although this was in line with developments in 2017, there has been a much stronger increase in transport capacities since May 2018 compared to last year. As expected, growth was particularly visible in the holiday months of June, July, and August. In September, capacity fell back to the June level but by no means as substantially as in autumn 2017. This represents a significant difference compared to last year’s development,” explains Jan Rzehak, Director Business Consulting at Transporeon Group.
“The development indicates that we are moving back to capacity levels seen in years prior to 2017; this was when more capacity was available on the market,” says Oliver Kahrs, Managing Director of TIM CONSULT. “One reason could be that economic growth is stalling. According to the Statistical Office of the European Union (Eurostat), industrial production in the Euro zone fell by 0.3 % from August to September 2018. For the coming year, the EU Commission has lowered its forecasts for economic growth in the Euro zone, especially for France, highly indebted Italy, and Germany. According to the German Council of Economic Experts (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung), growth slowed in Q3 2018 due to problems in the automotive industry with WLTP, the new light-vehicle fuel consumption and emissions test procedure,” Kahrs continues.
Rising diesel price yet minor decrease in transport prices
Although capacity in the transport market has improved, transport prices have declined only slightly. “Since June, prices have been gradually adjusting to the 2017 level. But back then, carriers used the capacity shortage to noticeably raise their prices. Despite recent capacity recovery, prices remain at this higher level. This could be due to upward development of the diesel price. As the current edition of the TMM shows, the diesel price index also increased by 4% in Q3 2018 compared to Q2,” says Kahrs.
Experts from Transporeon and TIM CONSULT report that capacities improved further still in October and November 2018 while transport prices remained high. “This shows in our analyses for October and November conducted with information unlocked from the Transporeon platform. We publish the outcomes in the Transport Market Radar (TMR), our monthly publication for market participants,” adds Rzehak.
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