Across the Pond: A Look at the Transportation Market in Europe

Author’s Note: Being based in the United States, most of my research and analysis is focused primarily on what is happening here. I was recently asked by Transporeon (a Talking Logistics sponsor) to take a look at what is happening in the European transportation market and they provided me with access to their Transporeon Insights market data for additional insights and perspective. I shared my commentary in a brief Transporeon Journal video commentary. Below are my introductory remarks. I encourage you to watch the full commentary for more details on what is happening in the European transportation market.

If I had to pick a word to describe 2021 from a supply chain and logistics perspective, it would be “delayed” — as in orders and shipments being delayed due to port closures, capacity constraints, labor shortages, and other issues.

In my case, for example, my wife and I ordered a new sofa back in February. It’s now seven months later and we’re still waiting for it to arrive and be delivered. 

Even milkshakes are getting delayed. McDonald’s had to pull milkshakes off the menu in England, Scotland and Wales because it couldn’t make deliveries due to a shortage of truck drivers. 

A truck driver shortage is not new — and it’s a topic of some debate, at least here in the United States — but the pandemic, Brexit, and other factors have certainly aggravated the problem — and not just in the UK, but across all of Europe.

According to research published recently by Transport Intelligence, there is a shortfall of 400,000 drivers across Europe, with Poland, the UK, and Germany being the most affected.

The UK, however, has had to deal with some unique challenges. For example, more than 20,000 EU-based drivers left the country after Brexit due to tightening border restrictions. 

Another challenge is what many people in the UK are calling the “pingdemic” — that is, getting a ping notification on your smartphone from the National Health Service’s Covid-19 app telling you that you’ve come in close contact with someone who’s tested positive for Covid-19. If you get pinged, you’re supposed to self isolate for 10 days or potentially face a fine ranging from £1,000–£10,000 (or about $1,400 to $14,000). In one week in late July, for example, 690,000 people in England and Wales were told to isolate themselves by the app.

It is also important to note that a lot of trucking capacity exited the market in 2020 during the peak of the pandemic. Carriers either reduced their fleets or went out of business. While the economy and trucking demand have rebounded faster than many people had predicted, replacing and growing that lost trucking capacity has taken longer. One issue is the semiconductor shortage that is constraining the production of trucks (among many other things).

When you put all these factors together what you get is a capacity constrained transportation market. This is clearly evident when you look at the Capacity Index from Transporeon Insights. A reading under 100 indicates a capacity constrained environment, and the July 2021 reading was 87.15 — a 14% drop from a year ago. This is the lowest reading since September 2018 (when it was 85.74) and it is trending toward the 5-year low of 80.24 in September 2017.

For more insights, data, and advice related to the European transportation market, please watch the full Transporeon Journal commentary.