Before delving into the analysis of the factors that led to this and further forecasts, it is important to mention a data point that sheds light on the situation from another perspective. For example, although both indexes used by the International Road Transport Union (IRU) to measure price movements – the European Road Freight Spot Rate Benchmark Index and the European Road Freight Contract Rate Benchmark Index – were lower in the first quarter of 2023 than in late 2022 (7.5 and 2.8 points, respectively), they are still above the levels from the beginning of the previous year (8.7 and 10.7 points). In simpler terms: prices are declining, but they are still higher compared to where we started.

Lower Demand, More Capacity 

After a surge in orders during the post-COVID period (a phase known as “find a truck at any cost”), economic prospects have taken a downturn again due to the war in Ukraine, the energy crisis, and inflation. Consequently, European economies have weakened, production has decreased, and consumer purchasing power has declined. For instance, in early 2023, average monthly spending in Italy decreased by 2.8%, in France by 3.9%, in the UK by 4.3%, and in Germany by as much as 6%.

It is not hard to guess: this has resulted in a decrease in demand for carriers, freeing up capacity, and tipping the balance. Today, the leading question again becomes, “how can I keep my truck busy?” Transport barometers, ahead of the Easter holiday season, measured a quarter more offers than demand for transportation.

The impact of available capacity is primarily visible in spot market prices, where higher availability leads to stronger competition among carriers and forwarders vying for their share of the pie. As for contract prices, we will likely have to wait a while longer. Perhaps this is why the term “sliding” (as mentioned at the beginning of the text) is more appropriate than “falling” when talking about price movements.

The extent to which this trend will continue depends on the development of the European economy and the answer to the question: will there be anything to transport? Germany, the strongest player on the continent, has officially entered a technical recession. This will also affect other, smaller economies that rely on it.

Lack of Manpower – an Alarming Bell 

However, does this mean that further price reduction in transport is a constant? Of course not. We must not forget the factors that argue for staying at a high level.

One of the leading factors is undoubtedly the shortage of truck drivers – a dark shadow that has been looming for quite some time without clear prospects for improvement. The latest data leaves little room for joy. Europe lacks 600,000 professionals behind the wheel of trucks and buses, and this number could reach a staggering 2 million in just three years if nothing changes.

Other aspects also play a role – possible fuel price fluctuations, increases in tolls announced by many countries these days, and various other charges. It is clear that this is an equation with a large number of unknowns, which even the best analysts often struggle to solve.

Owners and managers of transportation companies cannot do much about market trends. However, taking the right steps in managing the transport business can help them find a balance. How to stand firm and still be in a good starting position? Whether it is technological solutions that bring savings and greater efficiency, modern vehicles, or financial services that provide stability to your company – choosing the right partner is always a step closer to the goal. And when you are at an important intersection, that step can often be crucial.