As a road carrier, we are often asked why the rate of transport often changes. In this blog, we will discuss the main causes thereof in the current transport market. The industry is developing rapidly right now. Various factors play a role, such as the supply of work, the increase in scale in shipping and capacity problems at the terminals. SKB Logistics is eager to discuss these developments.
Supply and increase in scale
The prices of road transport are subject to change, now more so than ever before, for various reasons. If many containers need to be transported, prices are high. If less work is supplied, prices are low. These are the basic economic principles of market forces. However, due to the increase in scale in shipping, there can still be very busy peak moments during quiet times. The larger ships of today put 10,000 TEU on the quay straight away, instead of 2,000 or 5,000 TEU in the past. The customer still wants to be supplied as quickly as possible, so 10,000 TEU must be cleared by trucks in two days. This creates a peak load. And what do we do with the fleet for the remainder of the days? Click here to read our extensive blog on this subject.
Terminals and distribution centres
The difference in working methods between terminals and distribution centres is another factor that drives up prices. Many large terminals use time slots. As a carrier, you sign up for a specific period of time in which you expect to collect the container at the terminal. In busy times or during peak load times, many time slots are completely booked up. Peak times at the terminals are between 2pm and 6pm. In practice, it is not unusual that we want to book a timeslot at 11am for 4.30pm, only to find slots have all been booked up to 8.30pm. Making profitable trips in these conditions is practically impossible.
At night, they have plenty of room left and carriers don’t have to wait. The only problem is that the distribution centres in Western Europe where the container are loaded and unloaded often do not work 24 hours a day. Consequently, many of the trips for you as a carrier end up during peak hours at the terminals.
Drivers and charters
The availability of sufficient drivers and charters affects the price as well. Here too, the principle is simple: sufficient drivers and charters, the price tends to be stable. In situations of few drivers and charters, prices can rise sharply. However, the problem is that in quiet times, many charters find other sectors or countries to work in and often stay away from the Western European market for prolonged periods of time. And new EU rules concerning not being allowed to spend the night in the cabin and returning to the country of origin for a full week once every four weeks do not improve availability. Whereas in the dry period of 2018, truly every wheel was welcome in container transport, how and at what rates goods are to be transported in a subsequent dry year, will be quite a challenge. Diesel prices are, of course, another reason for increases and decreases, but given the issues set out above, this last point is a relatively easy issue.
A difficult solution for this issue
SKB Logistics is aware of this issue and wants to use this blog to create transparency, making this issue subject of discussion in the process. We are aiming to enter into discussions with shipping companies, carriers and clients to optimise the planning.