Haulage and courier rates surge as peak season ends, but prices remain lower than the levels observed in previous two December periods across the United Kingdom.
As 2023 drew to a close, road freight prices reached their highest point since December 2022, as anticipated by the industry. With fuel prices rising steadily between July and November last year and capacities strained amid peak season, costs continued to increase throughout the final quarter.
The latest data from the TEG Road Transport Price Index shows a rise in the price per mile for haulage and courier vehicles, increasing by 3.9% in December.
Courier prices rose by 3.8% from 128 to 132.8, while haulage rose by 4.07% from 115.4 to 120.1. Year-on-year, overall prices are still down 2.7% from the same period, with haulage and courier prices down 1.6% and 3.0% respectively.
Fortunately for businesses and consumers, this price hike in the supply chain is expected to be short-lived with prices already dropping in the first week of January.
While prices are expected to continue to lower throughout the month, the year ahead presents a significant degree of uncertainty.
Fuel prices reached lowest monthly average since October 2021
With lower fuel prices, operators will be able to entice new business by lowering prices or capitalise on higher profit margins, starting 2024 on a positive footing.
However, the recent Red Sea attacks have created cause for concern, with fears that fuel prices will rise should shortages emerge amid disrupted supply chains. Nonetheless, commentators have suggested that oil market disruptions are unlikely to be overly impactful, as other sources of supply are keeping up with demand. Road freight operators will be optimistic that fuel prices will continue to fall, however such relief might be short-lived if the crisis escalates.
2024 set to be critical juncture in net-zero progress
With the government’s zero emission mandate coming into effect, the new legislation will require 70% of new vans sold to be zero emission by 2030, increasing to 100% by 2035, while 2040 remains as the target for banning the sale of non-zero emissions HGVs.
Lyall Cresswell, CEO of Transport Exchange Group, says: “With December being the month with the highest average road freight prices for the last three years, it comes as no surprise that last month continued that trend."
Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics and Transport, says: “It’s still too early for full Christmas retail sales figures, but it’s fair to say that retail volumes generally are likely to remain depressed until the Bank Of England decides to relax interest rates. So, as we go into 2024, even more than in most years, now is the time to keep a really close eye on customer credit and cashflow.”
Read the index here: https://transportexchangegroup.com/road-transport-price-index/