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European road haulage capacity at 'decade high' level

Rates decline but remain at relatively high levels, according to quarterly study.

Available road haulage capacity in Europe is at its highest level in a decade, according to the latest Transport Market Monitor (TMM) published by logistics consultancy TIM Consult, an offshoot of German cloud-based logistics software provider, Transporeon.

Its capacity index rose by 31.4% in the first quarter of 2019 over the previous three-month period (Q4 2018) and was 14.9% higher versus Q1 2018. The trend has continued in April.

TIM Consult's managing director, Oliver Kahrs, underlined that the strong increase showed that “already during the first months of this year there were significantly fewer goods on Europe's roads.”

He added: “For domestic German (road haulage) transport, the capacity index rose even stronger with an increase of 38% in comparison to Q4 2018. This is the highest level for Europe and Germany in the past ten years. Only at the beginning of 2009, there was a comparable high amount of available capacity, in the wake of the financial and economic crisis."

Turning to trends in road freight rates, Kahrs noted that although the TMM's price index in Q1 2019 was 8.4% below that of Q4 2018, levels remained relatively high.

“The index for Q1 2019 is even 1.3% higher than in Q1 2018, although 14.9% less capacity was available in the first quarter of last year. For domestic German transport, prices in Q1 this year were even 4.5% higher than in Q1 2018. One reason could have been the adjustment of truck toll charges at the beginning of the year."

Putting more colour on the “surprising” increase in prices in Q1 on the same period last year given that there much more capacity in the market - a 10-year high, Kahrs said: “To a degree, carriers may have learned from the market over the past few years not to react too fast on the spot market in giving prices but it also shows that many shippers are moving their goods in a contracted market and not so much in the spot market which is an interesting development.”

The TMM's diesel price index fell by 9.3% compared to Q4 2018.

Source: Lloyds Loading List

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