Strong increase in transport capacity proves decline in economic growth

by David Fleschen

In the first quarter of this year, the free cargo capacity available for road transport increased by almost a third compared to Q4 2018. As a result, significantly fewer goods were transported by road at the beginning of the year than in the previous months. Compared to Q1 2018, more transport capacity was also available this year from January to March (+ 14.9%). The strong increase is a first proof that the economy in Europe and Germany is already growing more slowly than in previous years. Transport prices were 8.4% lower in Q1 2019 than in Q4 2018, partly due to a significant drop in diesel prices. This is evident from the 39th edition of the Transport Market Monitor (TMM) by Transporeon and TIM CONSULT. Here are the key results of the TMM 39 at a glance:

  - In the first quarter of 2019, the capacity index increased by 31.4% to 126.5 index points compared to the previous quarter (Q4 2018: index 96.3).
  -  The transport price index fell to an index of 93.3 in Q1 2019, which represents a decrease of 8.4% compared to the fourth quarter of 2018 (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% compared to the fourth quarter of 2018.

With available transport capacity already rising steadily in the second half of 2018, Q1 2019 saw an average of 31.4% more freighter space available to shippers in the economy and trade than at the end of 2018. As a result, more trucks are looking for cargo transported less goods and goods. "The strong increase in available transport capacity that we have observed in recent months can be used as a first indication of the slowdown in economic development. So far, there were only corresponding forecasts, for example, the German Federal Government. According to Oliver Kahrs, Managing Director of TIM CONSULT, in the Annual Economic Report 2019 published at the end of January, it is only expecting an increase in price-adjusted gross domestic product of one percent.

For domestic German transports, in Q1 of this year, based on the previous quarter, even 38% more free capacity was offered for day-to-day transports (spot market). "Both in Europe and in Germany, only in the first quarter of 2009 there was still more free available cargo space. That was in the wake of the banking and economic crisis, "continues Kahrs.

Transport prices are declining but still high

Although transport prices fell sharply in the first quarter of this year, they remained relatively high. "The transport price index for Q1 2019 is 1.3% above the value for the first quarter of 2018. Actually, the prices should have been this year, however, cheaper than at the beginning of 2018, as this time in the first quarter 14.9% more free space available was. In domestic transports, transport prices in the first quarter were even 4.5% above the prices of Q1 2018. One reason for this could be the adjustment of truck toll rates at the beginning of the year, "says Jan Rzehak, Director Business Consulting Transporeon.

As more freighter space is offered, the price difference between the cheapest and most expensive offer per transport order on the spot market also increases. "The available transport capacity in the first few months is usually higher for seasonal reasons than later in the year. Therefore, the price difference in the first quarter tends to be larger. In 2019, however, it was particularly high at 25%. Shippers of industrial and commercial companies should therefore have benefited from lower prices in the awarding of their transport orders on the spot market. We were last able to observe the corresponding differences between the highest and lowest offer per transport order in the fourth quarter of 2009. This was the first year in which the European Union recorded negative growth in the wake of the banking and economic crisis. Given the current economic development, the price difference is likely to be above average in the coming months. A transport award on the spot market is thus still very attractive, "said Rzehak.

Source: Tim Consult, Photo: Fotolia

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