Across the Pond: The European Transportation Market (October 2023)

Author’s Note: I was asked by Transporeon (a Talking Logistics sponsor) to look at what is happening in the European transportation market and they provided me with access to their Transporeon Market Insights data for additional insights and perspective. I once again shared my commentary for this month in a brief Transporeon Journal Market Update 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, and to hear from Mathias Kissig, Product Manager Market Intelligence at Transporeon, who shares some insights on Rate Benchmark, and Samuel Pearmann, Senior Product Manager, Freight Sourcing at Transporeon, who provides commentary on Freight Marketplace.

Last month I had the opportunity to be on the other side of the pond. I was in Barcelona for the Transporeon Summit 2023, where I got to speak with many shippers and carriers about the challenges and opportunities they face in the transportation realm, particularly in Europe.

At a high level, many of the topics discussed are not new. Cost control is still a priority, for example. Labor constraints — not just with drivers, but in the warehouse and other roles too — is still a challenge and will be for a long time. And the Russia-Ukraine war is still causing a lot of disruption and uncertainties.

There were also a lot of conversations about sustainability — how to measure and report CO2 emissions, for example, and how to incorporate sustainability into processes like freight procurement and carrier selection.

Add it all together, and mix in the still-sluggish state of the economy in Europe, and what you get is a market environment where Automation, Real-Time Insights, and Collaboration are more important than ever for success.

Speaking of real-time insights, let’s take a look at data from Market Insights to get some perspective on how things stand in the European transportation market.

Let’s start with capacity. A year ago in October 2022, the Capacity Index was 96.4. A reading under 100 indicates a capacity constrained environment. On the morning of this recording, the Capacity Index was 103.1 in October 2023 — a 7% year-over-year increase.

In fact, the Capacity Index has been over 100 since November 2022, so at an aggregate level, capacity availability has not been an issue this year. There might be some tightening over the next few weeks as we get into the holiday season, but no big changes are expected. 

Now let’s look at the Spot Price Index and the Contract Price Index, which track spot and contract rates across 70 major lanes in Europe. Watch this 40-second clip for details:

So, we’re nearing the end of another year. What are some key takeaways from 2023 that we can apply in 2024 and beyond? Together, we can probably come up with a long list, but here are three takeaways that rise to the top for me.

Watch the rest of the video for my takeaways from 2023 and additional data, insights, and advice related to the European transportation market, as well as Mathias’s and Samuel’s commentaries on Rate Benchmark and Freight Marketplace.