Road Transport Price Index – July 2024

2nd August 2024

Transport prices fall across the board in July but remain above 2023 levels

Showing the first drop since February 2024, the TEG index fell in July. This was evident in both courier and haulage prices.

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Index trends at a glance

As we move into the heart of the summer, the TEG Road Transport Index fell 1.9 points to 123.7 in July 2024. This 1.51% drop is the first since February, when the index started to consistently climb. But year-on-year, the overall index stands 4 points (3.34%) higher.

Looking at haulage prices, a similar monthly fall was evident: 1.7 points, equating to a 1.38% drop. Meanwhile year-on-year haulage prices were 6.23% above July 2023, equivalent to 7.1 index points. This steep annual rise may reflect inevitable cost increases, which have to be accommodated eventually.

Courier prices fell by 1.63% in July; a drop of 2.1 index points. This was slightly more than the overall index. Meanwhile the year-on-year rise stood at 1.04% (1.3 points).

The TEG Index appears to be following expected annual trends at the moment, in which prices stall over summer before recovering from September. With many factors at play, it will be interesting to see whether this trend continues in the coming months.

Industry pulse

The big news in July was a new government. While not unexpected, it is certain to bring change and perhaps spending cuts. The GfK Consumer Confidence Index suggests people developing some “wait and see” caution, as it rose just one point in July (following a three-point rise in June).

Meanwhile, the sun has broken through, and the rain has eased (for now). Coupled with the anticipation of further sport from the Paris Olympics, the mood remains upbeat overall.

Of course, school holidays bring an onslaught of annual leave and family day trips. This no doubt impacted the transport industry in July as drivers took time off, and demand for summer goods will have risen.

Fuel watch

Continuing the downward trend we saw in June, both petrol and diesel prices fell in July, albeit at lower rates than the previous month.

Diesel dropped to 150.35p per litre in July. This was a 1.17p monthly fall, representing a 0.77% reduction. Looking at the situation year-on-year, diesel prices remained 5.16p per litre (4%) higher. The price in July 2023 was 145.19p per litre.

Petrol prices welcomed a drop in July. The price per litre was 144.44p; a 0.9% fall. But this was still 2.79p per litre above July 2023, meaning prices have risen year-on-year by 1.93%.

Fuel prices continue to be a significant cost for both hauliers and couriers. While two months of consistent price falls will be good news, it is unclear what the future holds. Both domestic and international events can change things quickly.

Logistics UK warns government spending cuts for transport projects will hamper economic growth

New Chancellor of the Exchequer Rachel Reeves recently said there would be a “thorough review” of £1bn of unfunded UK transport projects. Logistics UK policy director, Kevin Green, fears these actions could hamper economic growth.

Reeves has already confirmed the A303 tunnel under Stonehenge and the A27 upgrade will be scrapped.

“For too long, investment in improving the UK’s infrastructure has been overlooked, making it more challenging for goods to be delivered to their customers. Logistics underpins every sector of the economy and, as such, is ideally placed to help the new government get growth moving again,” said Kevin Green.

Reeve’s announcements followed encouraging pledges to develop transport and energy grid infrastructure (necessary to power more commercial electric vehicles) in the King’s speech earlier in July.

However, Greg Ford, head of corporate at RED Training, pointed out the government’s apparent lack of attention to the UK’s road conditions: “There was little mention of tackling Britain’s crumbling road infrastructure, nor was there any sign of moves to cut road traffic accidents, which remain stubbornly high.”

RHA launches ‘Blueprint for delivery’ to forge closer ties with government

A new RHA document called ‘Mission Drive: A Blueprint for delivery’ highlights the importance of haulage, van, and coach businesses in driving economic growth.

The document has been created to make recommendations to the new government on meeting the road transport challenges the country faces.

A spokesperson for the RHA said: “Our country depends on the work of our members to keep supply chains moving and the influence our industry has on the wider economic and environmental picture is significant. Government has pledged to consult with industry on the measures it has announced. This document will form the basis of our engagement with decision makers across the country.”

The RHA also pointed out that long-term planning for the transport sector was necessary to build better connectivity, more efficient movement of goods, and support transport businesses transitioning to net zero. The organisation said it was ready to work with the new government to help achieve this.

Expert insight

“Different indices are giving out very mixed messages at the moment.

"The Service Producer Price Inflation indices for Q2 were published in mid-July by the Office for National Statistics. Road freight was down on the previous quarter and on the year. The July TEG index for haulage (admittedly a different period because of the much more timely reporting of the TEG indices), while down on the month, is showing considerable inflation year-on-year.

"Courier was the opposite. Whereas the closest SPPI index was showing annual inflation of more than 7.6%, the TEG is showing restraint.”

Kirsten Tisdale - Senior Logistics and Supply Chain Consultant - Aricia Ltd

In summary

With the summer holiday season here, the TEG Road Transport Price Index has fallen for the first time since February. This has been accompanied by a further (though modest) drop in both diesel and petrol prices.

Meanwhile, we’re facing changes from a new government, not least with the funding of transport projects and, as Kirsten Tisdale highlights above, mixed signals are circulating.

With future price changes currently unpredictable, keeping an eye on the monthly TEG Index is perhaps becoming increasingly important.

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