Courier costs rose again to new record levels, although average haulage rates are 11% below their levels last September, as HGV driver shortages ease
By Will Waters
The overall average price-per-mile for UK haulage and courier vehicles rose 3.5 points in September, rising for the seventh successive month, as the TEG Price Index nears a three-year high, although average haulage rates are 11% below their levels last September, as HGV driver shortages ease.
With inflation climbing again following the UK government’s mini-budget announcement last month, road transport prices are predicted to break records in the coming weeks, according to Transport Exchange Group (TEG).
“As we near enter the last quarter of the year, when prices traditionally rise, we might reasonably expect to see the index reach a new record high,” TEG said. “The average courier price-per-mile is already at that point, growing to a record high of 131.7 points during September.”
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, average haulage prices dropped 15.2 points (11.1%) year-on-year, their largest annual decrease since TEG Price Index records began in January 2019, although they rose, month on month, by almost 3% and are above their level in the first three months of this year.
“Haulage prices are also picking up pace, rising 3.5 points over the course of the month. However, they’re still a mammoth 15.2 points down, year-on-year,” TEG noted.
Pressures that have affected hauliers over the last few months and years are beginning to ease, TEG observed, with the latest UK government statistics 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 nor a recent dip in fuel costs could arrest the increasing overall road freight prices. The industry will, however, be hoping that the recent freeze on corporation tax will foster commercial growth,” TEG noted.
Instability and inflation
Lyall Cresswell, CEO at Transport Exchange Group and Integra, said: “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.”
Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, said: “The elements of the TEG index represent the month as a whole, and plainly most of September was prior to the mini-budget, so that will not have had too much impact on the current index figures.
Businesses ‘need a stable environment’ “What businesses need, probably more than anything else, is a stable environment in which to plan and manage: stable exchange rates to buy goods and commodities, stable supply base and prices, access to a predictable volume of labour, stable interest rates to quantify investment decisions.
“To say that there continues to be a great deal of uncertainty at the moment is to put it lightly!”
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 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.
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. Sample size is circa 2m orders per annum, from circa 8,500 participants.
Further information on the index can be found here: https://transportexchangegroup.com/road-transport-price-index/