Emerging Trends in Global Logistics from the Experts at Odyssey
Dear Valued Customer,
It is a pleasure to share with you our quarterly newsletter and trust you will find the information valuable for you and your associates. Our basic formatting will cover Odyssey news, safety, regulations, and market outlooks, as well as key current events.
In order to improve our newsletter, we’d very much appreciate your ongoing comments and suggestions regarding how to improve the information in line with your requirements and expectations for future iterations.
Our expert teams from both Berchem, Belgium and Gdansk, Poland are keen to continue to service you with the best possible quality and solutions.
On behalf of the European team,
The diesel index shown here below is based on the oil bulletin of the European commission:
In general, there is a positive correlation between the diesel price and the transport price, clearly indicating the impact of diesel prices on transportation costs and consequently prices.
The diesel index follows a consistent increasing pattern.
The transport price index fell in Q4 2018 compared to the 3rd quarter (-3%), while the diesel price index was almost 5% over that of Q3. It is continuing its step-by-step rise. Although diesel prices have risen consistently, this has had hardly any impact on transport price developments in the spot market due to high volatility in the transport market.
At the end of 2018, the available transport capacity increased further after the unexpected capacity increase in Q3. Due to the continued increase in capacity since the middle of the year, transport prices in the spot market have fallen step-by-step. Since Q4, we have observed prices below the level of 2017 here for the first time, when capacity bottlenecks characterized the market.
In view of capacity developments, the price decline appears in contrast with the diesel price, which rose again in Q4, But in practice, many industrial and commercial shippers hardly noticed the easing of prices, as they assign transports almost exclusively based on long-term contracts. This shows, once again, that it is better to follow a mixed transport assignment strategy to flexibly take advantage of the lower prices in the spot market to achieve cost reductions. We expect even more free capacity in the transport market in Q1 2019. That will put additional pressure on prices. Assigning transports on the spot market should therefore become more attractive.”
While 2018 began with the highest capacity index of the previous months, capacity dropped in the middle of the year, as expected, to a level comparable to the end of 2017. After the capacity index in May reached the lowest value of the year at 65.4, it rose again until year end. The second highest value of the year was observed in November (index 114,8).
The price index reached its highest values of the past year in May (index 111.0) and September (index 108.5). Comparison of the average prices of Q4 2018 with the same quarter of previous years shows that the average prices in Q4 2017 were higher compared to Q4 2016, but in contrast they dropped again in Q4 2018.
After the decline of the price index beginning in September 2018, it rose again in December 2018. In comparison, the price index in 2017 reached its highest value in October and then fell slightly until the end of the year. In general, the price index in Q4 2018 was slightly below that of Q4 2017.
The picture below shows the development of the transport price index in the past twelve months in comparison to the corresponding previous year’s period. Toward the end of the 4th quarter of 2018, the price index rose again, as it did in Q4 2017. For the first time since May 2018, however, the price index fell in October 2018 below the price index of the corresponding month of the previous year (October 2017). Since October 2018, the price index has been lower than in 2017.
Source: © TIM CONSULT/TRANSPOREON 2019
Figure below shows the development of the capacity index in the last twelve months in comparison to the corresponding period of the previous year. The following figure shows that available transport capacity developed similarly to 2017. While the price index has only been below the previous year’s level since October 2018, the capacity index has been higher since May 2018 than in the comparable month of 2017.
If we take a look to the current available capacity against loads in Europe and two major domestic markets, France and Germany, we see that the amount of loads for Europe in total and France there are still more loads than offered capacity; for Germany however the amount of loads is below the offered capacity which is leading to decreasing rate pressure.
It will only be a question of time before the paper version of the CMR will be replaced by its electronic version, which should increase the speed and accuracy of the data.
Until then, the paper proof of delivery (CMR) remains an important document for the shipper, his customer (receiver) and the carrier.
Box 24 of the CMR is reserved for the receiver. The receiver shall always fill the date & time and write the full name of the undersigned when accepting the goods. In case of damage/shortage, the receiver shall also put a reservation in this box.
Our experience with CMR check, shows that 10 – 20 % of the CMR has no date, stamp or signature in box 24.
Receivers shall recognize that box 24 contains very important information, as it can be used in case of disputes and also because the CMR is used as a validation of delivery date information provided by the carrier into Odyssey’s platform.
Creating awareness at your customer (receiver) of the importance of box 24 of the CMR is key. It will help tremendously in increasing the accuracy and benefit of the CMR.
For domestic shipments, CMR is very often replaced by a delivery note and/or ePOD. Receiver should ensure that any transport document hand over by the carrier/driver to accept delivery of goods shall be completed same way as in box 24 of the CMR.
Rules on driving times, breaks and rest periods
Regulation (EC) No 561/2006 lays down rules on driving times, breaks and rest periods for drivers of lorries and buses in order to improve working conditions and road safety.
The regulation applies to the carriage by road of goods by vehicles with a total mass exceeding 3.5 tonnes and to the transport by road of passengers by vehicles that are adapted to carry more than nine people (including the driver).
It applies, irrespective of the country of registration of the vehicle, to carriage by road in the EU and between EU countries, Switzerland and European Economic Area countries.
The aim of this set of rules is to avoid distortion of competition, improve road safety and ensure drivers’ good working conditions within the European Union.
These rules establish that:
- Daily driving period shall not exceed 9 hours, with an exemption of twice a week when it can be extended to 10 hours.
- Total weekly driving time may not exceed 56 hours and the total fortnightly driving time may not exceed 90 hours.
- Daily rest period shall be at least 11 hours, with an exception of going down to 9 hours maximum three times a week. Daily rest can be split into 3 hours rest followed by 9 hour rest to make a total of 12 hours daily rest.
- Weekly rest is 45 continuous hours, which can be reduced every second week to 24 hours. Compensation arrangements apply for reduced weekly rest period. Weekly rest is to be taken after six days of working, except for coach drivers engaged in a single occasional service of international transport of passengers who may postpone their weekly rest period after 12 days in order to facilitate coach holidays.
- Breaks of at least 45 minutes (separable into 15 minutes followed by 30 minutes) should be taken after 4 ½ hours at the latest.
- The compliance with these provisions is subject to continuous monitoring and controls, which are carried out on national and international level via checking tachograph records at the road side and at the premises of undertakings.
Rules on recording equipment: Tachograph
The regulations (EC) No 3821/85 sets out requirements concerning the construction, installation and use of recording equipment (tachograph) that must be fitted in the vehicles that fall within the scope of the regulation.
The tachograph is a device that records the driving time, breaks and rest periods, as well as periods of availability and other work undertaken by a driver. The aim of the tachograph is to:
- control drivers’ compliance with the rules in force;
- monitor the driving times of professional drivers in order to prevent fatigue;
- ensure fair competition and road safety.
Regulation (EC) No 3821/85 has been updated by Regulation (EC) No 165/2014 which introduces the smart tachograph, which will be installed in vehicles registered for the first time as from 15 June 2019, will be fitted with the following new and advanced features:
- better security mechanisms to make fraud more difficult and reduce the administrative burden, which is expected to save companies €515 million per year;
- an interface with the satellite navigation systems (GNSS), especially Galileo and EGNOS European GNSS Agency ;
- a remote communication facility to communicate the tachograph data to a police enforcer on the roadside when the vehicle is moving, thus avoiding unnecessary stops for checking;
- an ITS interface to link the tachograph with other ITS applications.
By ensuring better compliance with rules on driving times and rest periods, drivers will be better protected and fair competition will be assured.
Regulation EU 2016/799, defines the technical specifications for the smart tachograph.