The stock exchange always precedes events in the real economy. This truth, known primarily to investors, is currently also being reflected in the transport market.
Negative economic forecasts usually weaken the market for orders on exchanges (spot), encouraging transport companies to sign contracts with clients. In turn, economic growth favors the spot market, giving carriers a chance for higher profits.
Beniamin Matecki, TSL market expert
points out that entrepreneurs are mostly focused on the second scenario. The numbers confirm this.
Rates on exchanges are up to 10 percent higher than a year ago
As data from the Trans.eu platform shows, the number of orders on European routes in the first three quarters of 2024 was 43% higher compared to the same period of 2023. Such a significant increase in the number of freights resulted in an increase in rates – they jumped on average by 9% year-on-year, and in the case of LTL transport – even by 10% year-on-year.
And since more money can be earned on orders from exchanges, companies from the transport industry are looking boldly at them. According to Beniamin Matecki, it is even possible to terminate existing contracts, because more can be earned on spot orders.
It is worth noting that many companies signed contracts in 2023. They were already on the verge of profitability, and contracts secured their survival. It’s no surprise that they are now shifting towards spot orders, where they have a better chance of higher profits.
Beniamin Matecki, TSL market expert
Take advantage of high spot rates! Register now!
The German economy is finally growing. This is a good sign for the spot market
The trend reversal is also confirmed by data from the Ti & Upply & IRU report. Analysts pointed out that the spot market already gained an advantage over contracts in Q2 2024 – the spot index reached 127.7 points compared to 127.1 points for contracts.
The reasons for this trend can be found in favorable forecasts for the European economy, particularly in Germany.
The International Monetary Fund forecasts that the GDP of European Union countries will grow by 1.7 percent (y/y) in 2025, compared to 1.1 percent (y/y) in 2024 and only 0.5 percent (y/y) in 2023.
At the same time, it is worth recalling that Europe’s largest economy – Germany – after the recession of 2023 (GDP decline of 0.3% y/y), will end this year with a slight positive growth, and is likely to grow by 1.3% y/y in 2025.
These forecasts favor, for example, an increase in spot rates on the Germany-Poland route. Analysts from Ti & Upply & IRU estimate that spot rates in this case are about 11% higher compared to contract rates. Meanwhile, the difference on the Germany-Czech Republic route is even as high as 20% in favor of spot orders.
Up to 15% of vehicles have disappeared from the market. Time to rebuild the fleet
Beniamin Matecki notes that the economic slowdown in Europe in 2023 not only prompted carriers to seek rescue in contracts even for minimum rates, but also to reduce their fleet.
Companies significantly reduced the number of vehicles, did not renew leases, gave up external financing for new purchases, and some even suspended operations entirely. These reasons have led to up to 10-15% of vehicles disappearing from the European market, the expert estimates.
However, a revival can already be seen in this area. Businesses aiming to stay active in the spot market must now consider investing in renewing their fleets.
In his opinion, such decisions will be facilitated by the period before the end of 2024, when carriers will still be able to count on more favorable prices compared to those that will apply in 2025.
Plenty of offers? Attractive prices? Rebuild your fleet with orders from Trans.eu. Register now!
If spot orders, then necessarily on Trans.eu
Entities from the transport sector who want to find clients on the spot market may consider a presence on the Trans.eu platform.
It is the largest freight exchange in Europe, providing access to thousands of offers for the transport of goods in various options, including cabotage, cross-trade, and for vehicles of different sizes.
Trans.eu also offers carriers the Loads2GO! application, which helps to find added loads and thus reduce costs resulting from the so-called empty runs.
Users using the Trans.eu freight exchange can find spot orders, but also negotiate rates with contractors, establish lasting relationships with them on private freight exchanges, and improve financial liquidity.
Make the most of the moment – join Trans.eu
More offers, higher rates, freight moving from the contract market to the spot market. This is the perfect moment to join the Trans.eu Platform and develop your business.
The best months for carriers are coming. Take advantage of it.
