UPDATE (May 6, 2020): we continue to update these trends weekly on our Linkedin page. Below is the initial post from April 22, 2020.
While transportation volumes in Europe have significantly decreased over the pandemic lockdowns, the need for exception management has only grown — border delays, driver quarantines, demand fluctuations and overall volatility. By analysing live data over millions of shipments on our platform and augmenting it with data from our partners, we've put numbers behind these trends. From now on, we will update you regularly on the key learnings from the crisis.
Industries slowing down
Some sectors have been hit hard since the covid lockdowns began, especially in France, Spain, Italy and Benelux, where some non-essential industries were effectively shut down. Our data shows over 50% less truck traffic in Spain in the beginning of April, 46% in France and 37% in Italy last week compared to the pre-crisis period.
Automotive industry output in Europe declined over 50%, timber around 25% and construction by ~20%. We are seeing the first signs of a slight rebound with factories starting to come back online. Initially FMCG moved in the opposite direction than other industries as people stockpiled. Food delivery volumes have since normalised again.
More free capacity
Whereas FMCG rush and other hard to plan-for demand fluctuations initially decreased available capacity in March by ~20%, free capacity jumped up by 41% in April due to industry output declining significantly across the board.
Trucks constantly kept driving less every week, reaching the bottom the week before last when trucks connected to Sixfold drove on average 29% less than on the last week of February. But last week we saw a turn in this trend — on average trucks now drove 24% less compared to a normal week. Keep in mind that the Easter effect (further amplification) is removed from this figure.
Less production means less loads and it also leads to a price crunch with some examples showing prices close to €0.50/km in Germany. Prices on the spot market have dropped significantly (12% yoy overall, >20% yoy FMCG) and the spread between low and high quotes has increased.
At the same time, free capacity doesn’t translate into smoother operations. Border delays are still happening and border crossing times are still 26% above the usual pre-covid period. Some examples — a couple of days ago one DE→CH crossing peaked at 4h, BG→RO around 3h, AT→HU at 2h. This is of course much more manageable scale than the Polish border congestions the week starting March 16 when we saw up to 100 km truck lines taking days to cross. That week, median border crossing times across Europe were a staggering 60% above normal.
Whereas borders pose a slight interruption, domestic on-time deliveries have actually slightly increased (around 3 percentage points) in share as there's less traffic on the roads. As lockdown restrictions are likely to be eased in the next few weeks and people are already eager to move again, this effect is probably evening out.
Some capacity “going dark”Due to capacity increasing and prices getting suppressed, close to 1/5 of otherwise active capacity has gone offline. Carriers are taking capacity out of the market as price levels are not sustainable. This trend is supported by government subsidies across the continent for struggling businesses making it more optimal to temporarily shut part of the business down rather than compete with cut-throat prices on the market.
It all adds to the trend of trucks driving less. Actually, last week the share of idling trucks has increased by more than 2.9x compared to the first week of March. Some additional effect comes from mandatory quarantines for some cross border drivers and the regulations like the one in France that permits employees to not show up at work when they don't feel safe at work.
As the last month shows, the situation in transportation continues to be volatile and the effects differ a lot regionally and by sector. Times like these make the need to digitize supply chains further painfully apparent. To drive decisions and better plan ahead in the volatility, one needs facts on the ground from real-time data.
We will continue to monitor the situation and update you with our findings.