Road Transport Price Index – December ’23

5th January 2024

Road freight prices peak, with haulage and courier rates at highest since December 2022

December’s TEG Index data shows overall haulage and courier prices rise but remain lower than December prices in the previous two years.

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TEG Road Transport Price Index - Trends at a glance

December data from the TEG Road Transport Price Index shows a significant 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 122.2 to 127, a rise of 4.8 points. This marks the highest overall prices since December 2022, albeit 3.5 points lower year-on-year.

Both haulage and courier prices experienced similar increases, with courier prices rising 4.8 points from 128.0 to 132.8. This places last month’s courier prices at their highest since December 2022, with the largest month-on-month percentage hike since the same period. Meanwhile, haulage prices have also reached their highest since December 2022, rising 4.7 points from 115.4 to 120.1.

Industry pulse

After a year of record insolvencies, 2024 drew to a disappointing conclusion following an Autumn Statement lacking in provision for struggling UK hauliers.

With focus now firmly on the year ahead, the industry looks to the government for progress reports on the upcoming initiatives laid out in 2023, in steps towards achieving net-zero and improvement of road surfaces.

While fuel prices gradually settle, the scheduled increase to fuel duty in April will mean costs for operators are likely to mount throughout the year. Without substantial fiscal aid from the government, operators will continue to contend with low profit margins and soaring overheads.

Fuel watch

Fuel prices have decreased dramatically, coming as welcome news to operators tightening budgets in the busiest period of the year. Current petrol prices are at 142.43p per litre (-8.59p change), with diesel prices at 150.88p per litre (-8.09p change).

Wholesale fuel prices have come down significantly in the lead up to Christmas, with petrol and diesel now down 12.87p and 28.27p respectively from last December.

Both petrol and diesel rose steadily between July and November as oil prices increased, after major oil producers including Saudi Arabia and Russia restricted production. Now, fuel prices look likely to continue to decrease, with the RAC predicting that petrol could fall below £1.40 in January.

Haulage makes strides toward net-zero across the industry

With net-zero targets looming ever closer, UK hauliers are placing increasing focus on accelerating their efforts toward decarbonisation.

Strides are being made across the industry, with innovation in tech playing a significant role. Battery electric trucks remain a promising alternative to traditional HGVs, with initial testing being rolled out through last year.

Nestlé have begun the testing of two battery electric Volvo FM tractor units as potential additions to their fleet; with ranges of 120 miles, Nestlé have also invested in charging infrastructure at its sites in York, Halifax, Tutbury, and logistics warehouse East Midlands Gateway. The company replaced 11 HGVs with bio-LNG fuel in 2022 and also look set to incorporate HVO into their fleet in 2024.

Meanwhile, DAF have published the findings from their £10 million Battery Electric Truck Trial (BETT) which finalised in October 2023. Initial feedback from drivers was wholly positive, despite slight concerns over range and reliability.

Fleet versatility will be a key factor in achieving net-zero, and with a wider range of alternatives to traditional HGVs, operators will be paying close attention to the frontrunning technology when looking to invest in green freight.

Driver CPC reform welcomed as government proposes relaxation of requirements

With current CPC (Certificate of Professional Competence) processes argued by many to be cumbersome, proposed reforms to requirements by the government will hope to remove obstacles to training, and tackle the HGV driver shortage.

The Department for Transport is proposing the creation of a two-strand mechanism via a National DCPC and an International DCPC. The latter will be needed for drivers crossing into EU nations, and will comply with terms agreed between the UK and the EU.

Reforms will look to reduce the minimum length for each training module to 3.5 hours, decouple e-learning from trainer-led courses, develop more core course content with the DVSA and encourage informal assessment at the end of modules.

Meanwhile the RHA has raised concerns about the extent of the reforms, suggesting that the sacrificed training hours with no associated training mandate will compromise safety.

Digitalisation forecasted to accelerate, with greater resilience needed against cyber crime

While historically slower to embrace technological advancements, haulage has rapidly improved its digital offering in recent years. The transport industry is now among the leading industries driving digital innovation, and with AI technologies now commonplace, 2024 will be a testing ground for further advancements.

However, we have seen the vulnerability of the industry against cyber attacks, with the likes of KNP Logistics, Royal Mail, Owens Group and Mandata falling victim to cyber crime in the last 18 months. As technology improves, so do the threats against companies, with a greater need for robust and cutting-edge cyber defence systems.

In summary

The recent drop in inflation along with falling fuel prices denote a promising start to 2024, with any relief to the market volatility witnessed in 2023 a welcome sign.

However, UK hauliers will be holding their breath before assuming a year of plain sailing. The lack of urgency from the government in enacting road repairs will be a concern to many, with repair bills mounting as a result of damage to fleet vehicles. The industry also awaits news on the £2bn pledged to assist the manufacturing of zero-emission HGVs, with the costs associated with reaching net-zero still a top priority.

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