Introducing the new TEG Road Transport Price Index

3rd November 2021

Using unique price-per-mile data in the road transport market, the index will provide a monthly snapshot of the state of the UK’s supply chain.

See the index methodology here.

What is the TEG Road Transport Price Index?
At a time when supply chains have come under sharper focus than ever, the TEG Road Transport Price Index provides vital insight into the transport industry that the UK depends upon. Quite simply, it charts the price-per-mile cost for UK haulage and courier vehicles each month, which is a product of supply and demand levels affected by Brexit, Covid-19, driver shortages and other factors.

Key trends

Since January 2019, there has been a 30% increase in what carriers are charging per mile, for both courier and haulage vehicles.

Monthly increases (4.4 points on average) began in March 2021, in the wake of Brexit. Between March and October 2021, in just six months, there has been a 26.6 point price-per-mile increase.
September showed the highest rise since January 2019, when Transport Exchange Group started recording this data, which is not surprising when considering the unprecedented demand for drivers.

Price-per-mile changes over the last 13 months

Causes of the increase

The Brexit impact

The cost of the pandemic

Coming straight from those inside the transport industry, the data in the index helps us understand market conditions and their effect on the wider supply chain.

The industry has come up against a perfect storm of factors. Even before Brexit and the pandemic, driver shortages were a mounting issue. 

In addition to a significant number of drivers retiring each year, potential new recruits are sometimes deterred by the working hours and spending some nights away from home. Others have left the industry due to IR35 tax rule changes, making them liable for national insurance and PAYE deductions.

Brexit only exacerbated existing problems, with drivers from EU nations exiting the UK and leaving vacancies behind them. Any drivers wanting to come to work in the UK now face additional bureaucracy. With many drivers paid by the mile, instead of by the hour, border delays take money from their pockets.

Another factor making UK work a much less attractive option is the drop in the value of the pound against the euro. Being paid in pounds and paying for daily living costs in euros, EU nationals now have less spending power if they work in the UK.

The Covid-19 pandemic and its associated lockdowns caused further problems. Workplace restrictions caused huge delays in licence processing as well as driving tests, resulting in fewer newer drivers entering the market. Self-isolation rules kept other drivers off the road.

All this came against a backdrop of increased demand on supply chains, with e-commerce growing by 46% in 2020, according to the Office for National Statistics.

Now those supply chains are under greater strain than ever, resulting in the fuel and food shortages we’ve already witnessed.

“Demand for drivers is unprecedented, with various factors meaning it will remain high for quite some time. TEG Road Transport Price Index will allow anyone to take the pulse of the industry. Month-on-month, it will provide vital insight into the state of a market that’s integral to the UK’s economy.”

Lyall Cresswell, CEO of Transport Exchange Group

About the index 
The TEG Road Transport Price Index tracks changes in the pricing of road transport services based on millions of aggregated and anonymised transactions between thousands of transport companies.  

The methodology

The data

The TEG Road Transport Index is an arithmetic weighted series, tracking PPM (Price per Mile) each month against a base of January 2019.

Weighting is applied according to the mileage mix from each vehicle type using the Paasche formula. This ensures the PPM of each month is compared accurately with the base month.

Data is gathered from completed transactions on the TEG platforms. 

PPM = (sum order values) / (sum order miles)
 
Sample size is circa 2m orders per annum across c. 8,000 participants.  

Data ID: A1, B1, C1

When is the index released?
A new edition of the TEG Road Transport Price Index will be available on the third day of every month. 

Want to see more in depth data? Click below to visit the Integra Market Insights report

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