Transport Market Monitor

Recovery of transport prices still far away

Edition: 11 (May 2012)

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© Capgemini/TRANSPOREON 2012

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European transport market faces economic uncertainty
This is the eleventh edition of the Transport Market Monitor. It
outlines developments in European road transport rates and includes This report is the eleventh
figures for the first quarter of 2012. edition of the Transport
Market Monitor. Each
 The price index decreased by 7.9% in Q1 2012 (index 92.7), quarter, a new edition will
compared to the price index in Q4 2011 (index 100.6). outline the developments
during the past three months
 Compared to the index level of the previous year, Q1 2011 (index and reviews additional
96.4), the price index decreased by 3.8%. The diesel index themes in transportation.
increased by 2.9% in Q1 2012, compared to Q4 2011. This
increase however did not cause transport prices to rise.
All indices in this report are
 Another factor with a high impact on transport prices is the
based on the logistics
capacity index, which increased by 41.5% in Q1 2012 (index platform TRANSPOREON,
120.1), compared to Q4 2011 (index 84.9). which handles a yearly
 The price decrease in Q1 fits the pattern of the price index in transport volume (different
previous years. The effect is relatively strong this year, caused by truck types, mainly FTL and
decreasing economic activity and an uncertain outlook for the LTL) of more than €2 billion,
covering all European
near future.
countries. Information is
 The development of the price and capacity index over the next anonymously exported from
two quarters is likely to be influenced by the development of the the platform and aggregated
economic situation in both Europe and the USA. The current analysed by Capgemini
uncertainty causes hesitant and nervous behaviour throughout the Consulting.
industry. On the other hand, the oil price which causes fuel prices
to reach historically high levels will be need to be monitored The figures in the Transport
closely as well. Market Monitor date back to
 Both market dynamics and the expected cost increase of January 2008: the earliest
point of measurement of the
transportation emphasize the need to monitor transport price
index figures. For all indices,
developments very closely, to mitigate the risk of any unexpected the average figures of the 6
negative impact on company results. months period January 2008
till June 2008 have been set
These are the conclusions of the Transport Market Monitor by as the basis for comparison
TRANSPOREON and Capgemini Consulting, a quarterly publication, (Index 100).
which aims to track transport market dynamics.

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A 7.9% price decrease in Q1 2012
This section of the Transport Market Monitor outlines the quarterly
The price index is calculated
developments of the price and capacity index, based on a time span
by comparing the average
from 2008 until the first quarter of 2012. price per kilometre over time.
The price index (see figure 1) decreased by 7.9% in Q1 2012 (index
92.7), compared to the price index in Q4 2011 (index 100.6). When
comparing the index level of the previous year, Q1 2011 (index The Capacity Index is an
indicator for “available
96.4), the price index decreased by 3.8%. In July 2011 a first capacity”, the ratio between
deviation from the trend of increasing prices year on year was absolute demand and
witnessed, since then each month’s prices have been lower than the capacity. The capacity index
previous year despite the effect of inflation. is calculated by comparing
the average number of bids in
A price decrease between Q4 and Q1 is a recurring trend in the response to a transport
history of the Transport Market Monitor. In previous years prices request over time.
decreased on average between 5% to 7% between Q4 and Q1, with
the exception of Q1 2009, when a price fall of more than 15% was observed. A decrease in the price
index is a seasonal effect caused by a relatively lower demand for transportation in Q1 in multiple
markets e.g. consumer products and construction material. This trend is either caused by peak season or
impacted by the winter period in Q4. Less demand for transportation drives an increase in available
capacity and has a downward price effect.
The relatively large fall in Q1 of the price index could also be a result of the increased economic
instability which is discussed in previous editions of this report. Also the slight decrease of oil prices at
the beginning of 2012, after peak levels in 2011, shows that economic growth is slowing down.
The capacity index increased by 41.5% in Q1 2012 (index 120.1), compared to Q4 2011 (index 84.9).
Last year an increase of over 36% was observed. The only time we saw such a large fluctuation between
two consecutive quarters, was in 2008-2009. The index is 18.3% higher compared to the capacity index
of the previous year, Q1 2011 (index 101.6). Large capacity index increases are a regular pattern in the
index between Q4 and Q1.

Figure 1: Price and capacity index, quarterly (Q1 2008 – Q1 2012)

Price and capacity index (quarterly figures)

110 210

103,1 103,8 103,9

105 102,1 190
100,9 101,7 101,2 100,6
100
98,6 170
96,9 96,4
Capacity index

94,6 94,8
95 92,7 150
Price index

89,9 88,9
90 130

85
83,5 110

80 90
Price
75 70 index
Capacity
70 50
index
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112

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High volatility in the capacity index during Q1 2012
This section of the Transport Market Monitor depicts the monthly developments in the price and
capacity index over the last 12 months. Analysing Q1 2012 (see figure 2), January and February showed
a prolongation of decreasing price levels, while March demonstrates a recovery. Following the reverse
pattern, the capacity index was at an unusual high level in February 2012 (index 136.2) this has not been
witnessed since March 2009.
After a decrease in November and December of 2011, prices continued to decrease in January by 3.8%
(index 92.7) and in February by 3.9% (index 89.0). March picked up to a price index of 95.1 (6.8%
month-on-month increase).
The development of the capacity index has been extremely volatile between January and March 2012.
The capacity index increased by 26.4% in January (index 125.5), compared to December 2011 (index
99.3). In February it increased further to a capacity index level 136.2 (8.6% increase). And from
February to March 2012 the capacity index decreased again by 24.9% to index 102.3, just above the
December 2011 level.
This decreasing trend, in the last months of the year until February, has been observed in other years as
well while the recovery around March matches the historic pattern.

Figure 2: Price and capacity index, monthly (Apr 2011 – Mar 2012)

Price and capacity index (month by month)

110 150
106,1
140
104,3
105 103,1 103,1
102,4 130
101,2
100,0

Capacity index
99,4 120
100
Price index

96,3 110
95,1
95 92,7 100

90
89,0
90
80

70 Price
85
index
60
Capacity
80 50
index
Apr11 May11 Jun11 Jul11 Aug11 Sep11 Oct11 Nov11 Dec11 Jan12 Feb12 Mar12

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Figure 3 compares the monthly developments of the price index over the last 12 months, with the same
period one year before. The deviation from a trend of increasing prices year on year has continued. As
of July last year, prices have been lower than the levels of the preceding year. Especially in the period
December until February transport prices were significantly lower than in 2010-2011. The price
decrease in 2011-2012 is more extreme, but also the recovery in March is stronger. We can conclude
that the transport market is more volatile than before.
In the yearly comparison this volatile price development is clearly visible: in Q2 of 2011 price levels
were higher than in Q2 of 2010. This difference slowly diminished, up to November when the index
faced a large decrease compared to 2010. Although the transport prices increased substantially in
March, it is still below the price index level of last year.

Figure 3: Price index comparison, monthly (Apr 2010 – Mar 2012)

Price index comparison

110

105

100
Price index

95
Apr '10 - Mar
'11 (Price
90
index same
period, last
85 year)

80 Apr '11 - Mar

'12 (Price
index last 12
75
months)
70
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

10 6,0
5 2,9
0,3 0,9 1,0
0
-0,9 -0,6 Difference
-5 -1,2 -2,5
-4,0
-10 -6,3 -5,5

1 2 3 4 5 6 7 8 9 10 11 12

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Figure 4 compares the monthly developments of the capacity index during the previous 12 months,
compared with the same period one year before. In the last five months of 2012, the capacity index has
been significantly higher than the previous year. Especially in the months when the index experienced a
large price drop, capacity was much higher. This difference diminishes again over the last month in Q1
2012.

Figure 4: Capacity index comparison, monthly (Apr 2010 – Mar 2012)

Capacity index comparison

150

140

130

120 Apr. '10 –

Capacity index

Mar. '11
110 (Capacity
index same
100 period, last
year)
90

80 Apr. '11 –
Mar. '12
70
(Capacity
60 index last 12
months)
50
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

40 31,7
30 25,3
19,9
20 13,1 12,0
9,5
10 4,4 3,1 Difference
0,6 0,5
0
-10 -1,2 -3,6
1 2 3 4 5 6 7 8 9 10 11 12

The seasonal pattern in both, the capacity and price index, is in line with last year, however stronger. In
particular the capacity index is more variable; this is the result of uncertain economic circumstances.
Both shippers and hauliers act more emotionally and have difficulties in planning. The cautious
behavior of shippers increases uncertainty for hauliers. These effects magnify the volatility in both price
and capacity.

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Industry focus
General economic conditions apply to most industries, but trends
The TRANSPOREON platform
may be stronger or weaker in individual industries. Analysis of the handles transport for almost
price index by the type of industry identifies these differences, all industries. For this edition
shown graphically in figure 5. of the Transport Market
Monitor, different industry
The development of the price index for construction materials and types have been analyzed
paperboard / print is in line with the development of the overall individually.
price index during Q1 2012, but the price decreases were smaller.
Where the overall price index decreased by 7.9% between Q4 and Each chart in figure 5 depicts
Q1, the index for construction materials decreased by 6.0% to 91.0 the price development for that
(index 96.8 in Q4). Paperboard/Print decreased by 6.2% over the particular industry, indexed
against the industry baseline
same period, to a price index of 97.9. (H1 2008)
Timber shows an extreme fluctuation from index 113.1 in Q4 2010,
to 84.7 in Q1 2012 (a 25.2% decrease). The winter weather is named the main reason for the collapse of
this market, due to the difficult working conditions in forests and the large slow down in building
activities. These factors caused the amount of goods transported to shrink which increased spare
capacity leaving hauliers with a lot of overcapacity.

Figure 5: Price index for different industries (Q1 2008 – Q1 2012)

120
Price index Construction materials
110
Price index

100
Construction
90 Materials
80

70
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112

120
Price index Timber
110
Price index

100
Timber
90

80

70
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112

120
Price index Paperboard / Print
110
Price index

100
Paperboard
90 / Print

80

70
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112

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Price differences between offers increased
This section outlines transport dynamics, by analysing the price difference between the highest and the
lowest price offered per transport order. Figure 6 illustrates the price difference between offers, and the
development of the capacity index. Q1 figures show the trend for higher capacity and high price
difference. The large differences between prices as well as the high capacity available, underlines the
point made about uncertainty in the transport market. In a volatile market shippers and hauliers are
challenged to optimize transport assignment strategy.

Figure 6: Capacity index and price difference (Q1 2008 – Q1 2012)

Capacity index and price difference (quarterly)

210 40,0%

Difference between offers

36,4%

190 35,0%

170 30,0%
26,4%
Capacity index

150 23,2% 23,2% 25,0%

21,3% 21,5%
19,4% 20,0%
130 20,0%
17,2% 16,6%
15,7% 15,7% 15,2%
14,5%
110 13,2% 13,5% 15,0%
11,2%
90 10,0%
Price
70 5,0% difference
between
50 0,0%
offers
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Capacity
index

In line with the clear increase in available capacity, price differences between the highest and the lowest
offered price increased from 15.2% in Q4 2011 to 20.0% in Q1 2012. The price difference is an average
figure. In general, price differences increase with the distance to be travelled (see TMM, edition 1).

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Diesel index increased
This section compares the price index with the diesel
index (see figure 7). In general there is a positive For the diesel index, the average figures
of the 6 month period January 2008 till
correlation between the diesel index and the price index,
June 2008 have been set as the basis for
clearly indicating the impact of diesel prices on comparison (index 100), similar to the
transportation costs and consequently prices. This was not other indices used in this report.
the case during Q1 2012. The diesel price index increased
by 2.9% and the transport price index decreased by 7.9%, The calculation of the diesel index is
compared to Q4. This shows the impact of increased based on diesel price figures in Germany,
capacity has greater leverage on the transport prices, than obtained from www.aral.de. We assume
that the index pattern, based on the above
the effect of diesel prices. figures, is representative for Europe for
The increase of diesel prices is in line with the pattern we the purpose of this report.
have seen since 2009. With the exception of Q3 2010 and
Q3 2011, diesel prices have been increasing substantially.

Figure 7: Price index and diesel index (Q1 2008 – Q1 2012)

Price and diesel index (Quarterly)

110 115
109,2
105 110
106,1
104,3 105,0 104,7 104,0 105
100

100
95 99,0
95,7
Price index

Diesel index
95
93,5 93,7
90
91,2
90
89,1
85 86,1
84,3 84,3 85

80
80,3 80
Prce index
75 76,0
75

70 70 Diesel index
Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112

20%
9,1%
10% 5,7% 5,0% 4,9% 5,6% 5,8%
0,6% 2,1% 3,5% 2,7% 2,0% 2,9% Change in diesel
0% index (%) vs.
-0,7% previous quarter
-2,4%
-10%
-9,9%
-20%
-19,7%

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Transport Market Monitor on LinkedIn
Not only updates on the transport market are given via the quarterly publication of the Transport Market
Monitor. Lively discussions on the Transport Market Monitor group take place on LinkedIn. Therefore
join the group and participate in the discussion about the next statement:

“Price decreases in Q1 are caused by low demand from shippers”

React on this statement at LinkedIn by clicking on the button below:

Next edition
This edition looked at the price and capacity developments since the beginning of the Transport Market
Monitor in 2008. It outlined price decreases in Q1 2012 compared to Q4 2011 and in the same period
one year before. The next edition, number 12, will include the figures for Q2 2012 and will closely
monitor the possible impact of the uncertain situation in the European and US economies on the
transport business. It will be published in August 2012.

About the Transport Market Monitor

The aim of the Transport Market Monitor is to provide insights into the development of transport prices,
and other transport market dynamics to logistics executives and other interest groups. It is a joint
initiative of TRANSPOREON and Capgemini Consulting.
The indices in the Monitor are based on the logistics platform TRANSPOREON, on which shippers
tender and process their transport needs to their preferred transport partners on a daily basis. The
platform handles a yearly transport volume of over €2 billion in all European countries. Anonymously,
information is unlocked from the platform and analyzed by Capgemini Consulting. This results in
monthly indices which are published on a quarterly basis. In addition to each publication of the Monitor,
one or more market themes are discussed, supported by detailed analysis.
TRANSPOREON and Capgemini Consulting can help you to find the right strategy between static and
dynamic prices. Additional information about both companies and their service offerings is available
upon request.
This report is available at http://www.transportmarketmonitor.com. More information about the
products and services of both TRANSPOREON and Capgemini Consulting can be obtained via the
contact information provided at the back of this report.

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About Capgemini and TRANSPOREON
About Capgemini
With around 120,000 people in 40 countries,
Capgemini is one of the world’s foremost
providers of consulting, technology and
outsourcing services. The Group reported 2011
global revenues of EUR 9.7 billion. Together
with its clients, Capgemini creates and delivers
business and technology solutions that fit their
needs and drive the results they want. A deeply
multicultural organization, Capgemini has
developed its own way of working, the
Collaborative Business ExperienceTM, and
draws on Rightshore®, its worldwide delivery
model.
Learn more about us at www.capgemini.com
Capgemini Consulting is the Global Strategy
and Transformation Consulting brand of the
Capgemini Group, specializing in advising and
supporting organizations in transforming their
business, from the development of innovative
strategy through to execution, with a consistent
focus on sustainable results. Capgemini
Consulting proposes to leading companies and
governments a fresh approach which uses
innovative methods, technology and the talents
of over 3,600 consultants worldwide.
More information at
www.capgeminiconsulting.nl
Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group
About TRANSPOREON
The logistics platform TRANSPOREON
connects shippers from industry & trading
companies with carriers, drivers & consignees
– and optimizes and accelerates logistics
processes. Users of our platform receive web-
based SaaS (Software-as-a-Service) solutions
as electronic transport assignment, time slot
management and transport visibility.
TRANSPOREON allows to reduce dispatch
and freight costs, while minimizing waiting
times during loading and unloading.
Currently more than 650 industry shippers
industry and trading companies, more than
28,000 carriers and more than 60,000 users
from 70 countries are connected via the
TRANSPOREON platform. The platforms as
well as the customer service are available in 18
languages.
Operating company of the logistics platform
TRANSPOREON is the international
TRANSPOREON Group. Other solutions the
group is offering are the tender platform
TICONTRACT and the retail logistics platform
MERCAREON. Presently freight orders with a
volume of 8.5 billion EUR are organised via the
solutions of the TRANSPOREON Group. The
company is on site in 22 locations throughout
Europe and the U.S.A.
Learn more about us at: www.transporeon.com
12
 Capgemini Consulting TRANSPOREON
For more information, contact: For more information, contact:

Benelux: Balkans:
Ramon Veldhuijzen Armin Musija
Tel: +31 6 150 30 097 Tel: + 43 (0) 664 1966 542
E-mail: ramon.veldhuijzen@capgemini.com E-mail: musija@transporeon.com

Germany/Switzerland: Benelux:
Hendrik Mueller Michel Haenen
Tel: +49 151 4025 1707 Tel: +31 6 123 95 308
E-mail: hendrik.mueller@capgemini.com E-mail: haenen@transporeon.com

UK: Germany/Switzerland and Nordic countries:

Steve Wilson Volkert Gasche
Tel: +44 870 366 0236 Tel: +49 4101 8316761
E-mail: steve.wilson@capgemini.com E-mail: gasche@transporeon.com

Italy: UK:
Ramon Veldhuijzen Charlie Pesti
Tel: +31 6 150 30 097 Tel: +44 (0) 785 094 11 70
E-mail: ramon.veldhuijzen@capgemini.com E-mail: pesti@transporeon.com

Austria: Italy:
Hendrik Mueller Roberto Ostili
Tel: +49 151 4025 1707 Tel: +39 050 552168
E-mail: ostili@transporeon.com
E-mail: hendrik.mueller@capgemini.com

Austria:
France:
Armin Musija
Stéphane Ghioldi
Tel: + 43 (0) 664 1966 542
Tel: +33 060 7714687
E-mail: musija@transporeon.com
E-mail: stephane.ghioldi@capgemini.com
France:
Nordic Countries: Jean Arnaud
Kristoffer Arvidsson Tel: +33(0) 6 27 47 71 46
Tel: +46 70 5305849 E-mail: arnaud@transporeon.com
E-mail: kirstoffer.arvidsson@capgemini.com
Spain:
Poland: Miriam Ribas
Via: Ramon Veldhuijzen Tel: + 34 977 6200 39
Tel: +31 6 150 30 097 E-mail: ribas@transporeon.com
E-mail: ramon.veldhuijzen@capgemini.com

Poland:
Michał Krzysik
Tel: + 48 (0) 12 / 631 20 85
E-mail: krzysik@transporeon.com

Hungary/Slovakia/Romania:
Tamás Domonkos
Tel: +421 (0) 9 04 / 29 06 03
E-mail: domonkos@transporeon.com

www.capgeminiconsulting.com www.transporeon.com

TMM-team:
Capgemini Consulting: Kris Dieteren (NL), Janine Roes (NL), Martijn Gommers (NL), Richard Conway (GB),
Hendrik Mueller (DE), Ramon Veldhuijzen (NL).

TRANSPOREON: Peter Förster (DE), Sandy Buch (DE), Christine Götz (DE), Mathias Edel (DE).

Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group 13
www.transportmarketmonitor.com

Capgemini Consulting is the strategy and transformation consulting brand of Capgemini Group