UK haulage prices show July drop for first time in three years, but obstacles remain

Logistics and Supply Chain News

The latest TEG index data reveals that the average price-per-mile for haulage vehicles dropped between June and July for the first time since 2019, in line with lower fuel prices

The average price-per-mile for haulage vehicles has decreased from 118.5 points in June 2022 to 116.8 points in July 2022, according to the TEG Price Index.

When comparing haulage prices from the same time last year, there has been a 4% drop in the index, which has fallen 5.5 points – from 122.3 points to 116.8 points.

The stabilisation in haulage prices may partly reflect the impact of gradually decreasing fuel prices. Average diesel prices at the pumps increased by 2.89% from June to July, compared to the 6.59% increase that took place the previous period – a levelling out caused by an overall drop in the price of oil.

However, with inflation continuing to bite, there have been appeals for greater support to help haulage businesses stay afloat and thrive in the long-term. The All-Party Parliamentary Group for Road Freight and Logistics has called on the government to introduce an immediate ‘essential user rebate’ of at least 15p per litre for hauliers.

A long road ahead: driver shortages a long-term threat

HGV driver employment rates are not falling as significantly as in 2021, but according to Logistics UK, it still remains a ‘chronic’ issue. There are positive signs that government and industry initiatives (including increased wages, driver skills bootcamps and improved testing) are beginning to yield results.

However, to encourage the long-term stabilisation and growth of the logistics sector, discussions and action on driver shortage issues in the UK, Europe and around the globe must continue.

The BBC aired ‘Queen of Trucks’ at the beginning of July, a documentary that showcased the haulage industry and aimed to attract more young drivers and women onto the road. In the programme, lorry driving school boss Shannan Paterson highlights the ongoing need for improved processes – to ensure testing and training keep up with public demand to become an HGV driver.

Plus, the International Road Transport Union’s recently published Driver Shortage Global Report 2022 emphasised that the high proportion of older truck drivers indicates shortages just over the horizon. Europe has the highest average driver age (47), and over one-third of the driver population is above 55 years old.

Lyall Cresswell, CEO of Transport Exchange Group and new data platform Integra, says:

“I’m encouraged to see that the TEG Road Transport Price Index is showing stabilisation after so many months of soaring prices. There are certainly early signs of optimism for logistics businesses and their customers and consumers, who are all impacted by the prices involved in supply chain operations. 

“However, support for haulage businesses must continue, in line with the changing economic landscape. With MPs and industry bodies understanding the potential positives of a user rebate, we’re pleased to see the haulage industry being acknowledged for keeping the economy afloat.”

Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, says:

“This is the second month running that the haulage element of the TEG has shown deflation against last year. Of course at this time a year ago, logistics was running very hot with the opening up of the economy, staycations, and the driver shortage meaning that some loads weren’t moving, but the current drop has to point to substantially reduced demand in the economy now.”

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