A perfect storm has been gathering over UK road transport prices for the past few months. The returning HGV levy, clean air charges, rising fuel prices and higher business costs have all contributed.
Now, new data from TEG’s Road Transport Price Index shows that prices have started to rise. The price-per-mile of haulage and courier services has experienced its greatest monthly rise since December 2022. However, the overall index remains 2.8% down on last September, when fuel prices were still recovering from their July 2022 peak.
Courier prices increased by 2.7% during September, while haulage prices were up 3.6%. Overall, the index is up 3.3% month on month.
With fuel prices on the rise again, the gap between last year’s prices and this year’s prices might start to close – especially as we approach the peak demand season around Christmas.
Peak season runs from October to January each year, but prices rising significantly as early as September could point to even higher prices this year.
Net Zero uncertainty
As fuel and transport prices rocket, in the background, further doubt has been cast on the UK’s commitment to Net Zero targets.
Haulage and courier vehicles are heavily reliant on diesel as it stands, so rising fuel prices have a direct impact on road freight businesses. And the effects are passed on to their customers.
Advances in alternative fuel and green energy have been positive, with many vehicles adopting solar panels and biofuel technology in recent months. However, Rishi Sunak’s U-turn dealt a shock to the industry.
Pushing the ban on new petrol and diesel cars back by five years to 2035 won some plaudits, including among those couriers and owner-drivers who want more time to transition.
However, hauliers using 26-tonne-plus trucks are still in the dark about whether they’ll be able to buy new diesel vehicles after the existing deadline of 2040.
And there are also concerns about the general direction of the government’s green policy. Having already missed out on EV charging infrastructure in the last budget, EV fleet operators will now have more questions about the likelihood of investment.
Lyall Cresswell, CEO at Transport Exchange Group, says:
“What the industry needs, above all else right now, is answers.
“Operators appreciate that political policy can change, but when you’re investing millions in new electrical fleets, you need support. You need reassurance that these vehicles will be the future, rather than being underused because the infrastructure isn’t there. For smaller businesses who’ve spent on EVs, support is even more important as their margins are tighter.
“For years now, road freight companies have been urged to go greener. And even though it’s a huge, costly change for them, most operators see that becoming more sustainable is a necessity.
“Plus, many hauliers and couriers will be keen to ditch diesel for good – purely for economic reasons. In the last month alone, we’ve seen how volatile fuel prices can be, with the diesel hike undoubtedly pushing operators’ prices up.
“The road transport industry – like business in general – craves stability. We hope the next few weeks will give the sector the certainty it needs.”
Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, says:
“Both elements of the TEG index, courier and haulage, continued to show deflation in September at around 2 or 3%, so lower prices than this time last year which will be putting pressure on some road transport operations, and with the haulage index substantially less than it was at its peak back in September 2021.
We’ve also seen a couple of long-established and well-known logistics companies go into administration during the past month. In neither case have I seen pricing or profitability mentioned, with one collapse put down to the impact of a ransomware attack, showing the importance of cyber security as well as attention to traditional financial measures.”
