The road freight capacity in Europe has been on a consistent decline, with the capacity index dropping by 7.4% year-over-year as of March 2024, as reported by TransportIntelligence on Transporeon's latest data. The index stood at 109.52 in February 2024, where a value below 100 signals limited capacity. Although the index has been above 100 since November 2022, indicating no prior issues with capacity availability, the pace of adding new capacity slowed down significantly starting in March 2023, signaling a reduction in excess capacity and a normalization of the market conditions in European road freight.
For March 2024, there was a 5.1% decrease in capacity compared to the previous month. Contributing factors to this capacity squeeze could include the Easter holidays and ongoing developments in the Red Sea. The latest survey by TransportIntelligence highlights a noticeable shift towards multimodal solutions, such as air/sea and sea/land combinations, accounting for over 20% of freight solutions.
Furthermore, the index for spot road freight rates in Europe saw an average increase of 5.2% from February 2024, reaching 121.23, which represents an 11.8% annual increase. The index for contractual rates also rose, up 2.3% year-over-year and 0.9% from the previous month, achieving a value of 124.79 in March 2024. Although the spot freight index remains below the contract rate index (121.23 vs. 124.79), the gap between spot and contract rates has been narrowing since August 2023, suggesting a more balanced supply and demand environment. TransportIntelligence does not anticipate a capacity shortage, citing the weak economic outlook in Europe.
