European Spot Rates remain strong
Market Monday - Week 31 - road transport spot rates remain high with expectations to maintain elevated levels
In February, I initiated this analysis to present my perspectives and forecasts on the trend of spot prices relative to contracted price levels. With the summer vacation period nearing, it is an opportune moment to review the evolution of rates and outline my expectations for the coming weeks.
For more detailed information on the methodology and data behind the analysis, please refer to the original article.
This analysis centers on the overall distribution of spot price levels compared to contracted price levels across all the markets we track. To ensure accuracy and relevance, we used a truncated mean to exclude outliers.
Difference between spot and contracted rates for the past 23 months in Europe
Source: Transporeon Market Insights, own illustration
Each value represents the difference between spot prices and contracted prices within a specific week (Index 100). For instance, in week 21 of 2024, spot prices peaked at 14,1% above contracted price levels.
What is different to 2023?
The main difference from 2023 is the available truck capacity on the market, impacted by slight demand increases in some industries. However, due to overall low demand, reductions in fleet or regional supply imbalances are the primary reasons for the weaker capacity supply.
What can we expect in the coming weeks?
In blue, I’ve revised and extended my forecast on the potential trajectory of the spot versus contract rates graph until mid-September. Should my predictions prove accurate, we will experience an extended phase where spot prices surpass contracted levels, with only minor variations. This trend maintains significant pressure on contracted market prices and rejections, mirroring the altered capacity dynamics since 2023. The key question remains: How long will contracted rates stay steady before they begin to rise again?
I will monitor this situation closely and routinely evaluate the accuracy of my forecasts. Will we see a drop in spot rates, an increase in contracted rates, or both? Five weeks ago, I projected that spot prices would remain high throughout 2024, especially if the anticipated demand surge in the latter half of the year occurs. Based on current indicators, I still support this forecast, though adjusted market expectations and economic data from major markets like Germany suggest that economic growth might be postponed. This change needs to be followed closely and might lead to adjustments on the expectations.
Christian Dolderer
Lead Research Analyst