European road transport bottlenecks ease as demand from industrial producers slows, leading to lower transport prices

road with cars and trucks in landscape

After the recent squeeze on short-term road transportation in Europe, significant capacity has become available again on the spot market in the week from 30 March to 4 April. While capacity has fallen overall in absolute terms, demand has fallen even more sharply, leading to an increase in surplus capacity and a drop in transport prices of on average 5%, compared to the previous week.  In some sectors prices fell by as much as 10%. Meanwhile air transport remains severely constrained due to grounded passenger aircraft, with emergency medical goods a priority.

This is the result of the current evaluation of the transport market provided by Transporeon. The findings are based on real spot market freight loads handled via Europe's leading transportation platform.

Overview of key developments:

  • Across Europe demand for road transportation capacity has seen a steady decline from the second half of March, driven by the significant drop in European industrial output, particularly in the automotive industry. In France, Italy and Spain, industrial output fell by more than 20%. Germany, Austria and Switzerland together saw a decline of 5.3%.
  • In Europe, the order decline rate has fallen significantly since the last week in March, as carriers look to fill available capacities, and prices on the spot market have fallen. The drop in transport price was between 1.5% and 10% depending on sector (around 5% on average).
  • Available capacity increased during the period by 14% in Germany, Austria and Switzerland, by 12.1% in the Benelux countries, by 10% in Italy, 47% in Spain, 12% in Poland and 6.2% in France.
  • Road transport on-time delivery performance on domestic routes in Europe is improving, as restrictions on private mobility lead to a decrease in traffic volumes.
  • Cross-border road transportation remains volatile due to heightened safety and security regulations on borders.
  • The recovery in China’s industrial output following the corona crisis is driving an increase not only in ocean but also rail transportation demand. Rail freight from China to Europe is now reaching levels higher than before the crisis.
  • Air transport sees a massive decrease in available capacity, as passenger aircraft remain grounded.

 

“In the European road market we have passed the flipping point from under- to overcapacity,” says Stephan Sieber, CEO of Transporeon. “The question now is how long will this overcapacity remain and whether we will see a period of high stress specially for smaller carriers,” warns Sieber.

Transporeon’s view on the market is based on data of the Transporeon platform and the market intelligence initiatives of its subsidiary Tim Consult. Transporeon market analysis is based on the data of up to 350,000 cargo loads per week. For further current insights on the transportation market, available free of charge, please visit: https://www.transporeon.com/en/expertise/insights/