The overall price-per-mile for haulage and courier vehicles dropped from 116.2 to 114.7 during February on TEG’s Road Transport Price Index, following previous years’ trends. This was largely due to a significant drop in courier prices, which have reached their lowest point since April 2022.
The latest insights from the TEG Road Transport Price Index align with post-peak season patterns, with road freight operators dropping prices after the busiest point in the year. With less demand, many operators have dropped prices to entice more work in the post-Christmas dip.
Meanwhile, the report shows a surprising trend in haulage prices which have increased by 1.8 points, rising to 111.5. This marks the first time haulage prices have risen in February since the index first started recording in 2019.
TEG highlights three factors going forward including fuel prices, driver qualifications, and the use of AI in enforcing road traffic laws.
• Despite recent increases, fuel prices have not yet affected road transport costs significantly. Despite the slight increase, petrol remains 3.9% lower and diesel remains 10.8% lower than February 2023. However, the temporary reduction in Fuel Duty until March 2025 has been extended, providing relief to operators.
• Concerns about the expiration of half a million driver qualification cards (DQCs) in 2024 due to the COVID-19 pandemic's impact on training opportunities. This could exacerbate existing driver shortages.
• Lastly, the implementation of AI-enhanced technology by police forces to detect road traffic offences, which includes penalties for violations such as not wearing seatbelts or using mobile phones while driving. This development could particularly affect HGV and courier drivers with points on their licenses
Lyall Cresswell, CEO of Transport Exchange Group, says: “The road freight sector has started 2024 following price trends as expected. In the post-peak season period, overall prices have continued to fall despite rising fuel prices.
“However, the increases in haulage prices last month were particularly interesting, standing out from previous years’ overall price trends. These increases may be a reaction to more haulier administrations in the last few months, with SMEs looking to maximise profits.
“Looking to the year ahead, we can expect to see road transport prices start to rise going forward.
“The industry will also have one eye on the recent fuel increases. While rises have been slight so far, we’ll undoubtedly start to see petrol and diesel creeping up after this period of low rates.”
Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, says: “Green shoots or Red Sea response? While the TEG index for courier work did what we all expected for February and went down a little, the TEG index for haulage made a surprising increase – after 20 months in deflation!
“News from the ONS about January retail sales was that they had done a surprising upswing after a dismal December. This could be the first sign of green shoots. But the rise in the TEG haulage index in the following month could also reflect the need for urgent replenishment following a combination of surprise sales and slower arrival of new stock.”