The price is never on ice
A new transport price index provided by LAE and DKV promises rapid and reliable predictions concerning the development of freight costs in Germany’s road haulage industry. The projections are based on huge data volumes.
The road haulage industry has already undergone a series of very turbulent months; future market developments also remain very uncertain. The new ‘DKV Transport Price Index’ has been designed to supply a degree of orientation in these uneasy times. The German service provider for petrol supplies and toll charge billing launched the index for selected customers in June. It will depict past, current and future prices for the transport of goods by road, thus providing industry representatives with a basis for their decisions. Logistics Advisory Experts (LAE), a spin-off from St Gallen University (Switzerland), will provide the contents for the index.
Established just at the right moment
Launching a new price index for transport services could be considered a little risky by some, given the current economic and political climate. Wolfgang Stölzle, managing director of the university’s Institute for Supply Chain Management and the honorary managing director of LAE, naturally sees things differently. “Capacity utilisation for lorries has fallen strongly over the past few months; that actually represents ideal conditions for a price index such as ours, because market players need to know how things are developing.”
Information for LTL, FTL, CEP sectors
Shippers, forwarders, companies from trade and industry and other partners supply LAE with their transport costs. LAE’s algorithms then process the data and transform it into indices for the LTL, FTL and CEP segments. The results are limited to Germany for the moment. Switzerland and Austria will be covered from the beginning of 2021 onwards.
Similar services are already available, of course, but LAE and DKV’s product is different from other solutions, according to Stölzle. “We work with a vast amount of real prices – not with an expert body’s assessments of the situation.
Over and above this, the index is published monthly, which automatically provides greater relevance for everyday operations, in comparison, say, with a quarterly index.” LAE’s segmentation into LTL, FTL and CEP indices (general cargo is set to follow at the end of this year) represents another advantage. The index supplies data on past price developments as well as projections of future prices. The latter will become ever more reliable with time, as the growing volume of data will enable more precise projections.
Precise projections are still difficult at the moment, however, says Stölzle, “as prices rose until February, and subsequently crashed in the FTL and LTL segments. Many contrast were re-negotiated under enormous price pressure. The CEP sector was the only one that boomed.” DKV’s transport price index will now provide clarity in this turbulent phase. The solution will be open to all parties from mid-July.