Recovery in road freight capacity driven by lower market volumes

Overall, we are seeing a gradual recovery of transport capacities across Europe and an alleviation of the bottleneck situation according to Transporeon’s capacity index. This trend of increasing road transport capacity has stabilised somewhat – capacity in the European market has been on an upward trend since May 2022, with the exception of September, when capacity dropped by 1.4% compared to the previous month.  

Compared to the previous month, road transport capacity fell by -1.3% in December 2022 according to Transporeon’s capacity index. However, the capacity index increased by 20.7% compared to December 2021, indicating that there is significantly more road transport capacity available on the market than a year before.

European Road Freight: Capacity Index (Monthly)


Source: Transporeon

The recovery in capacity during the summer months can partly be explained by the summer holiday season and the seasonal shutdown effect. This habit of shutting down is especially ingrained in old manufacturing sectors, although it has spread well beyond the manufacturing sector.

However, the typical seasonal shutdown effect should have started dissipating ahead of the upcoming peak season in fall and winter. In the run-up to Christmas, available capacity in the market typically decreases due to the strong increase in demand for transport services. This season we haven’t witnessed that, and capacity wasn’t affected by Christmas.

This untypical scenario is mainly due to lower market volumes. Record high gas and electricity prices in 2022 forced many companies to stop or reduce production in Europe. For instance, British manufacturers recorded one of the largest drops in production activity since the global financial crash, according to the latest economic data by S&P Global/CIPS UK manufacturing purchasing managers index (PMI). Similarly, in Germany, the volume of bulk orders is far-below-average and has been on a downward trend since February. All in all, the weakness evidenced in the manufacturing industry is in line with scenario of economic slowdown and recession at the turn of the 2022 and 2023. Market participants are also witnessing a decline in goods, triggered by the overall economic slowdown.

As expected, the increase in capacity has triggered a downward movement in rates, particularly on the spot side. Spot rates are on a downward trend, dropping by 7.2% in December 2022 compared to the year before according to Transporeon’s price index. This trend is yet to be seen on the contract side – contract rates have increased by 12.6% in December 2022 compared to the same period in 2021 and remain high despite more capacity on the market.

The capacity index over the following months will be influenced by the development of the economic situation in Europe. The current uncertainty causes hesitant behaviour throughout the industry and consumer confidence seems shaky, resulting in slower retail spending. This is particularly expressed through the higher inventory levels seen in retail – according to Market Scale, some retailers are overstocked by as much as 30%, thanks to dwindling consumer demand. All of this is clearly having a depressive force in the road freight market.

Transporeon’s Capacity Index is available on GSCiTi’s online data platform. Supply chain strategists can use GSCiTi’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry. 

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