In May of this year, Transporeon conducted a market assessment and business development survey among more than 1,000 European road carriers for the second time since 2018. The results are summarized in the report Capacity, Pricing & Technology: 2019 European Road Transportation Survey. According to the report, more than three quarters of respondents were able to increase sales in 2018. Expectations for the current year are only slightly more cautious. In line with the current high level of transport prices (source: Transport Market Monitor), 69% of freight forwarders expect their services to become even more expensive. The digitization of transport logistics processes is welcomed by 77% of survey participants. This is an increase of 10% compared to the previous year's survey.
Despite the economic downturn, European carriers remain optimistic about the future. There has also been little change in the assessment of price trends: As in the previous year, the majority anticipates a price increase of between 1% and 5%. As in the previous year, most respondents cited the continuing shortage of drivers (54%) as the reasons for this. According to 16% of the respondent European industry representatives, Brexit is also likely to influence the development of transport prices in 2019.
"The expected price increases could be related to the development of fuel prices. As shown by our web-based data analysis tool Transport Market Monitor, on monthly price and capacity developments for European road transport, diesel prices rose gradually from January to May 2019. Prices eased slightly in June, although the general price level remained high", says Oliver Kahrs, CEO of Tim Consult, a Transporeon Group company.
"It fits with this assessment that the development of diesel and fuel prices is regarded by the majority of carriers (59%) as the most important influencing factor for this year's business development, followed by concerns about overall economic development (57%). The driver shortage, a topic which dominated the conversation in the first survey in 2018, has lost some of its importance this year", adds Thomas Einsiedler, Chief Product Officer at Transporeon.
Almost all carriers are active on the spot market
Overall, 92% of freight forwarders work with shippers on the basis of fixed contracts and fixed transport rates but, at the same time, submit tenders on the spot market for ad-hoc tendered transports. Most respondents (55 %) receive three quarters of their orders on the contract market and one quarter on the spot market while 21% are equally involved in both markets, and 12% generate the main part of turnover from transports put out to tender at short notice.
"A split between contract and spot business is advantageous for both shippers and carriers. With a mixed transport assignment strategy, industrial and trading companies can react more flexibly to unforeseen events. If more free freight space is available, as is the case this year, shippers can realize price advantages on the spot market. Carriers, on the other hand, can use ad-hoc orders to avoid empty runs and optimize route planning", explains Einsiedler.
Carriers consider transport logistics digitization in a positive way
A clear majority of freight forwarders (77%) expect their own business situation to improve as digitization progresses, which is 10% more than in the previous year. For 62% of respondents, online processes optimize cooperation with shipping companies. 50% of carriers expect automated payment processing. More than one third of those surveyed (35%) also regard end-to-end visibility and therefore the ability to track and trace transports to be a particularly important digital service.
Carriers are aware that freight tendering platforms such as Ticontract are intensifying competition. At the same time, they confirm the advantages of these cloud-based solutions, for example in networking with potential new customers (38%). In addition, half of respondents agreed with the statement that e-sourcing platforms make bidding easier and more efficient. Irrespective of their support for digital transformation, 89% of all survey participants would like real-time feedback on the competitiveness of their online offers. This would enable them to adapt to important relationships and ultimately better assess their own performance.
Download the report
The report Capacity, Pricing & Technology: 2019 European Road Transportation Survey can be downloaded free of charge from the Transporeon website