Massive congestion at the borders and concerns about drivers: Logistics in Europe is struggling with unusual challenges due to short-term political measures. But the basic supply is secure. Freight carriers have a strong interest in continuing to offer their capacities on the market.
How have the demanded capacities and offered prices changed in the past days?
In the past two weeks, transport capacity in the EU has fallen by 18 percent compared to the same period last year. The sharp drop in production in the Benelux countries, France, Italy and Spain also contributed to this. Al-lein in France saw its output fall by 27 percent between 12 and 26 March. The decline was around 10 percent in Italy and around 9 percent in Spain.
At the same time, the rate of transports that are no longer carried out under the conditions of long-term framework agreements is rising. The number and prices of offers for short-term transports now fluctuate considerably. On the spot markets, we see price ranges between the cheapest and the most expensive offer from 35 to 140 percent - depending on the day. Shippers can currently expect an average of 3.3 offers per order.
In Germany, the mileage of trucks subject to tolls fell in March 2020 by 5.9% in seasonally adjusted terms compared with February. This was the sharpest ever measured decline compared with a previous month since the introduction of the truck toll in 2005. a similarly significant decline in truck mileage had recently occurred during the global financial and economic crisis: In January 2009, the seasonally adjusted truck toll performance index fell by 4.3 % compared to the previous month.
How will the offered capacities change in the coming months?
That will depend crucially on the length of the state-imposed restrictions and the resulting decline in industrial production. We have already observed a significant decline in new truck registrations in the EU in February. Freight forwarders are massively postponing investments. According to the European Automobile Manufacturers Association, the number of registered heavy trucks in Europe fell by 19 percent. Germany, France and Spain contributed to this in particular. For medium-weight trucks, the decline across Europe was 18 percent, for light trucks up to 3.5 tons, the decline across Europe was 4 percent. What are the effects of the border closures that have now taken place in large parts of the EU and Europe?
Only a few days ago Volvo reported a strong increase in cancellations in the truck business. For the first quarter as a whole, order intake was 16 percent lower than a year earlier.
Many internal EU borders have recently been closed to passenger traffic. Now the first governments are announcing the reopening. What impact will this have on transport logistics?
The transport of goods has also been free in recent weeks, even if there have been longer waiting times in some cases. A current picture shows the data card of Sixfold and Transporeon. Just-in-time production is currently not possible if it depends on cross-border deliveries.
Are there enough drivers at the moment?
This varies from country to country. The EU Commission has now approved exemption ap-plications from eleven member states for driving and rest periods to counter bottlenecks. In most cases the driving and rest periods are extended, in some cases to up to 120 hours per week. The exceptions will initially be valid until 31 May.
What is the financial situation of the carriers?
It is difficult. According to a survey by the Federal Office for Freight Transport, 44.1 percent of transporters have now introduced short-time work. In the week before that, it was only 37 percent. A further 13 percent are planning this step.
Apparently, the return of drivers from Eastern Europe no longer seems to be a major problem. In some cases, drivers are currently foregoing trips home at the request of their employers. In other cases, truck drivers would return to Germany unhindered after showing the required employer's certificate. The companies surveyed are increasingly reporting that some of the absences feared have not occurred or that the personnel have returned in the meantime, for example after quarantine.
Once the coronavirus pandemic is contained, how will capacities and freight rates in land transport develop?
An unprecedented fall in prices is already being felt on the market. In some cases, trans-ports are being offered far below cost. Compared with the previous year, average freight rates have fallen by 12 percent. As soon as the prescribed restrictions are lifted, there may be a further drop in prices, at least in the short term.
The ability of freight forwarders to offer capacities on the market will increase faster than production and demand. We expect the market to be very volatile in the initial phase of normalization.
The decisive factor will be whether the industry succeeds in maintaining or resuming coordinated transport systems. If the number of empty runs increases because freight is booked for only one route, price increases may occur. No reliable predictions are possible at present.
In Italy, Germany and other European countries, non-essential shops remain closed. What impact will this have on online business?
Online retailers will benefit in the short term. This applies equally to the food and non-food sectors. Amazon is already increasing its staff. However, procurement of goods, declining production and restrictions in cross-border traffic pose limiting factors for online business as well. In any case, customers must expect significantly longer delivery times.
Where can information on concrete measures and regulations concerning road transport be found in the individual countries?
The International Road Transport Union (IRU) provides an almost daily updated overview of the situation in the individual countries through its 180 member associations in 73 countries. It describes in detail restrictions at borders, transport bans, special rules and relaxation of previous regulations. The document can be downloaded from the IRU website.
Latest update: 29th April, 2020