Spot prices for domestic road transport in France are predicted to reach a peak next week
Market Monday - Week 18 - Road transport spot prices in France are expected to increase 21% compared to March of this year.
Due to seasonal fluctuations, the spot market is currently highly volatile. Many of my recent posts have focused on this topic. Today I have chosen to delve deeper into the French market, as week 19, with two public holidays falling on Wednesday and Thursday, presents an extraordinary situation, prompting sharp market reactions.
Spot prices are heavily driven by the market forces of demand and capacity. While demand is expected to remain stable overall, the market will face reduced capacity and increased inefficiencies due to the operational burdens associated with two holidays. This is likely to result in an increase in contracted load rejections (transports that are either timed out or rejected by carriers on the Transporeon platform) and a decrease in the number of offers per load on the spot market. The first metric indicates that more loads will be moved to the spot market, not only for the impacted week, but also for the preceding and following weeks. The second metric provides insight into market competition, reinforcing the basic theory that more offers lead to lower prices, and fewer offers lead to higher.
The chart below, which shows trends in spot prices, rejections and offers for the French domestic market, illustrates these market fundamentals.
Source: Transporeon Market Insights, own illustration and evaluation
The first two highlighted periods confirm these fundamentals. For a better visualization and aligning the contracted loads rejections with the offers, rejections are displayed inverted in the graph. Therefore, the decreases in this graph for rejections and offers both indicate an increasing effect on the price. So far in 2024, the market has been relatively balanced, with no indicator outperforming or signaling a general trend change (3rd highlighted period). This assessment is crucial to understand how the market is likely to react and to which level it will likely return to after these weeks.
Source: Transporeon Market Insights, own illustration and evaluation
I predict a sharp increase in the spot rates this week, peaking next week with a rise of approximately 21% compared to early March this year. However, as we haven’t seen fundamental changes in the indicators (offers and rejections) yet, I expect spot prices to decrease again by mid to late May, fluctuating around a level of +10% compared to early March for the duration of June.
In July, I expect France and the French spot market to be again in the spotlight due to the Olympic Games. The preparations leading up to the games, as well as the event itself, will significantly impact transport operations. Factors such as road closures, the overall traffic situation, and increased security levels, all against the backdrop of rising transport demand associated with the event, will affect not just the Paris region but the entire country.
Christian Dolderer
Lead Research Analyst