European road transport: Double digit capacity growth but prices remain high

European road transport: Double digit capacity growth but prices remain high

Road transport capacity in Europe showed double digit growth in Q3 but prices remain high, according to the latest research from logistics platform Transporeon and TIM Consult.

Transporean’s latest Transport Market Monitor  found that 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, meanwhile, fell to 104.9, a drop of 2.8% compared to Q2 2018.

Commenting on the latest data, Transporeon Group Director Jan Rzehak said: "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.”

Oliver Kahrs, Managing Director of TIM Consult said the development suggests the sector is moving back to capacity levels seen in years prior to 2017; when more capacity was available on the market. 

"One reason could be that economic growth is stalling. According to the Statistical Office of the European Union (Eurostat), industrial production in the Eurozone 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 Eurozone, especially for France, highly indebted Italy, and Germany.” 

While capacity in the transport market has improved, continued Kahrs, 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.”