European road prices decline in third quarter
Road freight prices in Europe decreased by 2.6% in the third quarter of 2011, compared with the previous quarter, according to the latest edition of ‚Transport Market Monitor‘ produced by Transporeon and Capgemini Consulting. This is particularly surprising as historically the index has always recorded seasonal increases in the third quarter of the year. When compared with the same period in 2010, the index declined by 0.4% (see Ti Dashboard – Road Freight Rates: Europe).
It appears that the uncertain economic climate within Europe and the US has led to uncertainty within the road transport market. The capacity index, which measures the ratio between absolute demand and capacity, increased by 14.9% in the third quarter of 2011 compared with the previous quarter (see Ti Dashboard – European Road Freight: Capacity Index). The increase in available capacity indicates a decline in demand for European road transport, consequently having a downward effect on prices.
The Transport Market Monitor highlights volatility in monthly developments of both the price and capacity indices. In July and August the capacity index increased, before declining in September. Conversely, the overall price index declined in July and August and increased in September; supporting the inverse relationship between the two variables.
Another factor influencing falling transport prices in the third quarter were fuel prices; the report’s diesel index declined by 0.7% in the third quarter of the year compared with the previous quarter. The report also highlights the fact that the decline in diesel price was less than that of the overall transport price; indicating increases in capacity as having a significant influence on transport prices.
For the next two quarters the price and capacity indices are expected to be influenced by developments in the global economic situation. At the start of the financial crisis in 2008, data from Transport Market Monitor observed a decline in prices and an increase in capacity in the fourth quarter of the year. In previous years, the usual seasonal pattern was an increase in prices for this period. Publishers of the report draw attention to the importance of monitoring transport price developments over the coming months in order to "mitigate the risk of any expected negative impact on company results."
Quelle: eyefortransport
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