Road freight industry braces for mini-budget fallout, amid continuing price rises

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The average price-per-mile for haulage and courier vehicles has risen for the seventh successive month, according to the TEG Price Index. 

With inflation climbing again following the pound’s fall against the dollar, road transport prices are predicted to break records in the coming weeks. The overall index’s price-per-mile is now just 2.4 points off its high-water mark, driven by dramatic increases in courier prices, which rose 5.8% year-on-year and 2.5% month-on-month.

By contrast, haulage prices dropped 15.2 points (11.1%) year-on-year, their largest annual decrease since TEG Price Index records began in January 2019.

Pressures that have affected hauliers over the last few months and years are beginning to ease, with the latest government stats suggesting an end to the HGV driver shortage might be in sight. The number of HGV drivers in the UK now exceeds pre-pandemic levels.

Yet, neither this or a recent dip in fuel costs could arrest the increasing overall road freight prices. Now the pound’s slump will make imports – including fuel – more expensive, meaning more inflation and price hikes in road freight. The industry will, however, be hoping that the recent freeze on corporation tax will foster commercial growth.

Lyall Cresswell, CEO at Transport Exchange Group and Integra, says: “While the pound’s fall is undoubtedly adding to instability and inflation, the road freight industry is in good shape to meet any upcoming challenges head on. 

“The huge increase in driver numbers is extremely positive news. It means that operators will find it easier to deal with spikes in demand – such as the Christmas rush.

“And it’s reassuring to see haulage prices coming down. They were artificially high last year, but the situation now is much healthier.

“Much will depend on how quickly financial markets stabilise – and the transport industry will certainly be watching this closely – but the sector has shown before that it can weather any storm.”

About the data source

  • The TEG Road Transport Price Index tracks changes in the pricing of road transport services, based on millions of aggregated and anonymised transactions between thousands of transport companies.

The methodology

  • The TEG Road Transport Price Index is an arithmetic weighted series, tracking price-per-mile each month against a base of January 2019.
  • Weighting is applied according to the mileage mix from each vehicle type using the Paasche formula. This ensures each month’s price-per-mile figure is accurately compared with the base month.

The data

  • Data is gathered from completed transactions on the TEG platforms, then aggregated and anonymised.
  • PPM (price-per-mile) is calculated as the average of all completed orders, excluding 0 values.
  • PPM = (sum order values) / (sum order miles).
  • Sample size is circa 2m orders per annum, from circa 8,500 participants.

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