November data from the TEG's Road Transport Price Index shows a rise in average haulage and courier vehicle prices over the course of the month. The overall price per mile for haulage and courier vehicles increased from 120.5 to 122.2, a rise of 1.7 points. This marks the first time prices have risen in November since 2019, in the index’s first year of recording.
TEG said the rise was predominantly due to a significant jump in courier prices, which increased 2.5 points from 125.5 to 128. Haulage prices also saw a slight increase, rising from 114.8 to 115.4 during November. Year-on-year, the overall price has actually dropped 1.4 points, from 123.6 last year to 122.2 in November 2023.
TEG analysis
With industry focus still firmly on net-zero efforts, the recent Autumn Statement marked a step forward in tangible financial support from the government. The announcement of £2bn to be made available to the automotive sector to manufacture zero-emission vehicles was long overdue, but bodes well for future investment in electrification.
Nonetheless, the industry continues to battle with numerous financial challenges. Rising fuel prices and increasing costs of vehicles and insurance, coupled with low profit margins, are adding to the hardship faced by haulage businesses. Many operators will have pessimistic forecasts for next year’s revenue, with stable freight costs needed to endure the volatile economic climate.
Fuel watch
Fuel prices have dropped in the midst of peak season, offering welcome relief to operators looking to keep costs down over winter. Current petrol prices are at £151.02 (-2.65% change), with diesel prices at £158.97 (-1.98% change).
Commentators have attributed this decrease to the success of government initiatives forcing fuel retailers to display fuel prices online. With motorists able to shop around, competition and transparency looks to be keeping prices down. Just 14 days after the Competition and Markets Authority (CMA) issued a report accusing retailers of failing to pass wholesale cost savings onto customers, prices reduced by 3.75p.
Autumn Statement
While the Autumn Statement saw some positive mention of the haulage industry, many industry leaders were left unsatisfied by the support set aside.
Good news included the pledging of £4.5bn from 2023 for five years to the manufacturing sector, £2bn of which is dedicated to supporting the manufacturing and development of zero-emission vehicles.
On the announcement, Jon Lawes, Managing Director at Novuna Vehicle Solutions, said “the plans to earmark £2bn for zero-emission vehicle development, reform electricity grid access and support business investment are welcome”, noting an “urgent need to boost net-zero infrastructure around the UK”.
However, haulage’s offer was largely lacking. Jeremy Hunt failed to cancel the planned increase in fuel duty next April and made no mention of strategy to fix the UK’s pothole problem, despite £8.3 billion in funding being pledged.
Despite such vague plans, UK haulage businesses might take optimism from the commitment from the Chancellor to back British businesses, cut business taxes and reduce inflation.
Soaring overheads result in collapse of 463 hauliers
Data from Price Bailey Accountants has revealed a record 463 hauliers folded in the last year, with astronomical overheads negating profits.
These figures show the number of British haulage businesses entering insolvency has more than doubled in the past two years. Untenable costs and shrinking profit margins are further exacerbating the challenges faced by haulage businesses, making them vulnerable to failure.
The lack of support for haulage businesses in the recent Autumn Statement further indicates the disconnect between the industry and government, with more needing to be done to raise awareness of the struggles of UK businesses. UK hauliers will require greater financial help, government assistance and long-term support assurances to safeguard the sustainability of their businesses.
Looking ahead to 2024
While uncertainty persists around the path to net zero, the industry can hope that stable fuel prices will offer some long-term assurance. With significant expenditure expected in converting fleets to green energy sources, we are hopeful that government assistance and cooperation will improve.
We hope to see significant progress in the projects announced in October, where £200m was dedicated to the road freight sector to support the transition to greener practices. With steady progress, next year should see over 300 new zero-emission HGVs on the roads, including electric and hydrogen fuel-cell vehicles.
Conclusion
While the Autumn Statement was largely unsatisfactory to many in the haulage industry, the continued stability of road freight prices will be a comfort in looking ahead to the new year.
With the loss of more than 400 hauliers in the last year, there remains concern over the support available to UK businesses, with more to be done by Westminster.
While the pledging of £2bn to assisting net-zero efforts will be welcome news, the Government must bear in mind the strain currently faced by UK businesses.
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