Transport prices continue to rise despite falling fuel costs

1st September 2024

The latest data from the TEG Road Transport Price Index revealed a sharp rise in transport prices in August 2024.

The index, which has tracked average road transport prices since January 2019, rose by three points in 31 days, moving from 123.7 to 126.7; a 2.24% increase. The rise is in contrast to August 2023, when the index dropped. Haulage prices, in particular, surged in August 2024, with a 4.2-point (3.47%) increase pushing the haulage-specific index to 125.2.

The year-on-year price index also revealed a sharp rise in haulage prices, with the haulage index now 10.6 points (9.24%) higher than in August 2023. The Road Haulage Association (RHA) noted a 10% rise in haulage costs over the same period, which likely accounts for much of the annual price hike.

Courier prices also experienced a rise, though less pronounced, with the courier-specific section of the price index increasing by 1.8 points (1.42%) to 128.0. Annually, the courier index was up by four points (3.22%). Despite variations in price increases, all markers in the index showed positive growth in August — a shift not seen since September 2023.

Fuel costs, however, told a different story. Diesel and petrol prices continued their downward trend in August 2024, offering some relief to transport businesses. Month-on-month diesel prices fell by 2.56p to 147.79p per litre – a 1.7% decrease – and diesel in August was 3.28p lower than August 2023 figures.

Petrol also saw a decrease, with prices dropping by 2.11p to 142.33p per litre, a 1.46% reduction. Compared to August 2023, when petrol was priced at 148.52p per litre, current prices are down by a full 6.19p, or 4.16%.

With fuel costs typically making up a third of operating expenses for transport businesses, the continued fuel price decline is welcome news for the transport industry.

Kirsten Tisdale, senior logistics and supply chain consultant at Aricia, commented: “Back in July, we had the Euros which, although England didn’t win, encouraged some spending. We’ve had Taylor Swift who, during this summer, generated an estimated £1bn for the UK economy.

“However, retail demand overall hasn’t been great.”

She added that stock clearances and early container arrivals from the Far East continue to drive logistics demand, providing some relief for the sector despite broader economic uncertainties.