Transporting Costs Go Up: TMM

Shailaja A. Lakshmi
Friday, August 24, 2018

The thirty-sixth edition of the Transport Market Monitor (TMM) by Transporeon and Capgemini Consulting reveals high transport prices due to declining transport capacities and rising fuel costs.

In Q2 2018, the capacity index decreased by 36.3% to 70.1 compared to the previous quarter (index 110.1). In Q2 2017 the capacity index was 65.8, which means the index value for Q2 2018 is 6.6% higher than in 2017.

The price index increased in Q2 2018 to an index of 107.9, which is an increase 17.2% compared to Q1 2018 (index 92.1). Compared to the price index of Q2 2017, the price index increased by 6.6%.

The diesel index showed an increase of 9.3% compared to Q1 2018.

In Q2 2018 trade volumes in Europe are expected to decrease by 11.6% to €2060 billion compared to Q1 2018 (€2330 billion).

Lars Vitters, Supply Chain Manager at Capgemini Consulting, notes: “Our prediction on transportation costs became a reality. In the second quarter transportation costs reached the record of Q4, 2017. More importantly, the transportation costs could further rise to a new record high in the second half of this year. This is a direct result of continuously rising fuel and driver costs while at the same time transport demand increases across all industries. Moving forward it will be interesting to see if there will be any impact on transport capacity now the European Union has relaxed cabotage regulation.”

Oliver Kahrs, Director, Business Development at Transporeon, says: “The available transport capacity fluctuates around a historically low level, which pushes transport prices upwards. A current survey by Transporeon shows that the driver shortage and shortages in free load space are the greatest challenges for freight forwarders in 2018."

Oliver adds: "In this context, two thirds of the transport service providers see the expansion of digital processes as an opportunity to win customers for connected loads and reduce empty kilometers. Indeed, a large part of the missing capacities could be gained by a more efficient networking of the shippers and a higher load factor of the trucks in use."

Categories: Finance Fuels & Lubes Logistics

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