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European road freight capacity dips, raising prices

A report in the latest Clecat newsletter indicates that European available road freight capacity on the spot market dipped sharply in September, compared to the same month last year, falling by almost 14%, according to the latest Transport Market Monitor, published by the cloud-based logistics software provider Transporeon and its subsidiary Tim Consult.

It is the lowest capacity index calculated by the study since 2017, which also showed that capacity fell by 14% between August and September this year, reflecting a progressive recovery of business activity and road freight transport demand since July.

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The prices were down by 3.8% last month, compared to September 2019, but were up 8.2% compared to August 2020, as the impact of lower capacity levels kicked in.

Last month’s prices were more or less at a similar level to the average of 2018. 

Analysing the data at a webinar earlier this week, Tim Consult’s Olivier Kahrs said that the ongoing situation of falling capacity and a recovery in prices contrasted sharply with European spot market conditions during the ‘peak’ corona months of April and May this year –whereby there had been a record oversupply of trucks due to the dramatic reduction in industrial output triggered by the pandemic, which also drove down prices significantly.

However, since July, as lockdowns eased, such trends have steadily reversed as business activity picked up, resulting in a substantial drop in available capacity not only year-on-year but month-on-month also, as well as an uptick in prices.  

The capacity drop is now at a point where it is influencing prices, which, although still below last year’s levels, increased significantly last month.  Mr Kahrs noted that, with the start of the busy end-of-year period for business and industrial output increasing, there was little prospect of a change in current capacity/price trends, unless a sizeable second wave of Covid-19 infections materialises, leading to economic activity being shuttered again.

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