Good-bye to High Available Transport Capacity? - Understanding the Differences to 2023 and the Implications
Market Monday - Week 19 - A surprising decrease, exceeding the usual seasonal trend in European transport capacity was monitored. What are the implications for the rest of this year.
In this episode of Market Monday, I’ve updated my evaluation of the expected seasonal trends of contracted load rejections (transports that are either timed out or rejected by carriers) and offers on the spot market. These two KPIs serve as our main indicators of short-term available truck capacity in the market. Typically, rejections increase and offers on the spot market decrease around public holidays. However, this update reveals significant and strong reactions from these KPIs compared to my last post in March.
Source: Transporeon Market Insights own illustration
In 2023, we encountered a unique situation. Both metrics showed different levels of available capacity. However, in week 13 of 2024, we observed a sharp increase in rejections and a decrease in offers. This represents a significant shift from the levels of the previous year as indicated by the dotted lines (rejections +32 index points and offers -23 index points).
Consequently, we should expect a general decrease in available capacity in Europe. The recent trend suggests that the likelihood of returning to 2023 levels after the public holidays is minimal. The following chart highlights the countries most affected by these rejections. Germany, Austria, Hungary, Czechia and Slovakia faced high increases, while Belgium, France, Great Britain, Italy and Romania saw a more relaxed situation.
Change in contracted rejections in 2024 compared to 2023(weeks 14-18)
Source: Transporeon Market Insights own illustration
The chart above does not show a uniform development, but a change in trends for many countries. Great Britain needs a unique assessment due to the lingering effects of Brexit in 2023. Its rejections showed in contrast to all other countries high values in 2023 which are now decreasing towards normalization rather than indicating a differing trend.
What implications does this have for the market in the coming weeks and months?
Although the demand for transportation remains steady and shows no clear upward trend, changes in capacity are primarily responsible for the current situation. Factors, such as reduced fleets, increasing bankruptcies and reassigning trucks to regional and local business areas instead of the international spot market seem to drive this development.
Therefore, we should anticipate a different capacity situation and higher rate increases, particularly in the spot market in 2024 compared to 2023. Additionally, the expected increases in demand, mainly in the second half of 2024, along with the already altered capacity situation, will likely also drive up contracted prices in the end of 2024.
Christian Dolderer
Lead Research Analyst