Hectic situation in the transport sector

You will surely have already read about the hectic situation in the transport sector. As the result of a combination of rising fuel and personnel costs, and of the huge pressures relating to the availability of vehicles, companies in our line of business are currently having to think carefully about the future. As reported by the Rabobank in its recent ‘Transportupdate augustus 2018’, the consequence of these developments is that the profitability of road transport is falling. Price increases are insufficient to cover the increases in costs, and this is putting pressure on the margins. The report states too that entrepreneurs are also unable to pass on sufficiently the additional costs created by the shortage of personnel, and concludes: “All in all, the sector as a whole is doing more for less.”

The Transport Market Monitor (TMM) showed that the price index for the road transport industry came out 17.2% higher in the second quarter of this year than in the first quarter. As has been said, the shortage of transport capacity is one of the factors that are pushing prices up considerably. According to Transporeon, joint compiler of the TMM, this capacity is at a historically low level.

Appearing also very recently were the results of the annual research by Panteia/NEA into the developments in transport costs. We shall shortly examine this more extensively. Among other things, the results show that Panteia/NEA anticipates an increase of 6.7% in the cost of the wages for road transport drivers in 2019.

All these developments are certainly having an impact. Here at Van Duuren we are frequently hearing about announcements of price increases by colleagues in the transport business. For example, two weeks ago Nieuwsblad Transport reported that in the Netherlands DHL Express are to increase their tariffs for parcel deliveries by 4.9% with effect from the beginning of 2019.

It goes without saying that we follow all these developments very closely, and we consider our options most carefully in order to make the right decisions with regard to our own tariffs. We do this every year of course, but this year the market is so dynamic that such careful consideration is more important than ever. We will shortly provide you with more information on this subject.