In Q1 2019, the available road transport capacity increased by almost a third compared to Q4 2018. This indicates that at the beginning of this year significantly fewer goods were hauled on roads than in previous months. Compared to Q1 2018, from January to March an additional 14.9% of transport capacity was available. The strong increase indicates that the European and German economies are beginning to experience slower growth. In addition, in Q1 2019 transport prices were 8.4% lower than in Q4 2018, partly due to a significant decline in diesel prices. This data is obtained from the 39th edition of the Transport Market Monitor (TMM) by Transporeon and TIM CONSULT. Here are the key findings.

• In the 1st quarter of 2019, the capacity index rose by 31.4% over the previous quarter to 126.5 index points (Q4 2018: index 96.3).
• The transport price index fell in Q1 2019 to 93.3, which equals a drop of 8.4% compared to the 4th quarter (index 101.8). 
• The price index was thus 1.3% higher than in Q1 2018 (index 92.1).
• The diesel price index fell by 9.3% over the 4th quarter of 2018.

 

With transport capacity continuously increasing in the second half of 2018, in Q1 2019 an additional 31.4% of free cargo-space became available for shippers. “The strong increase in available transport capacity that we monitored in the recent months is initial evidence of a slowdown in economic growth. The German government’s Annual Economic Report 2019 published at the end of January is supporting this view, which assumes an increase of the price-adjusted GDP by only one percent“, states Oliver Kahrs, Managing Director TIM CONSULT.

With reference to the previous quarter, in Q1 2019 38% of additional available capacity was offered on the inter-German market for daily allocated transports (spot market). “In Europe and in Germany, only in Q1 2009 there was more freight capacity available due to lingering effects of the financial crisis”, Kahrs continues.

 

Transport prices down, but still high

Even if transport prices dropped sharply in the 1st quarter, they remain relatively high relative to recent quarters. Jan Rzehak, Director Business Consulting Transporeon says,” “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. If we only look at transports within Germany, in the past quarter prices were even 4.5% higher than in Q1 2018. One reason could be the adjustment of truck toll rates that took place in January

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. “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 favorable 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“, Rzehak continues.

 

Information on the development of road transport in Europe

The TMM is derived from spot market data on the Transporeon platform based on the ‘best carrier’ transport assignment solution. Published on a quarterly basis, the TMM contains numbers for the most recent quarter and also provides information on how transport capacity and prices have developed, looking back over the last twelve months and more. The TMM is free and can be subscribed to on the Transporeon website at www.transporeon.com.