Road Transport Price Index – May 24
4th June 2024
Transport prices take a bold jump in May, aligning with year-on-year trend
May saw a decisive rise in the TEG index, as the courier and haulage sectors showed similar climbs.
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Index trends at a glance
The TEG Road Transport Index saw a marked increase in May, the likes of which haven’t been seen since 2021. The May index stood at 123.8 – a 4.20% monthly rise from 118.8. At 5 points above April, this rivalled the year-on-year increase of 4.6 points (3.85%).
Looking specifically at haulage prices, a similar picture was evident. Rising by 4.6 points, the May index reached 119.2. That was a 4.01% increase, in line with the overall index.
Courier prices saw a bold increase too. Jumping 5.1 points in May, the index rose to 128. This 4.14% jump was slightly higher than the haulage monthly price rise.
Industry pulse
May trading has always been affected by two bank holidays and this year was no exception. With two fewer working days, the tighter work schedule is likely to have contributed to May’s price increase.
While April retail performance was challenging, perhaps due to ongoing cost of living issues and wet weather, GfK’s Consumer Confidence Index rose two points in May, suggesting a more promising outlook. This may simply be the demand we should have seen in April, or it could reflect a more optimistic economy.
Whatever the answer, it does appear that May was a more confident month for many sectors of the economy, potentially increasing demand for haulage and courier transport.
Fuel watch
Month-on-month fuel price changes during May were modest.
Petrol prices rose 0.74p to 148.81p per litre during May (0.49%). And yet, the year-on-year increase was 4.36p per litre (3.01%). There’s no doubt fuel prices remain higher than last year.
Diesel prices fell modestly in May to 156.31p per litre (-0.52%). Meanwhile, there was a steadier year-on-year rise for diesel prices. They rose 1.62p per litre May-to-May, showing a 1.04% increase.
Fuel prices appear to be relatively stable for now, but world events can change the situation quickly. The Middle East continues to be an area to watch closely.
Industry calls for Minister of Logistics in next government
Business group Logistics UK has repeated its call for the next government to appoint a logistics minister as the country gets ready for a general election on Thursday 4th July.
David Wells, chief executive of Logistics UK, highlighted that every aspect of the economy relies on logistics, and investment in the industry would reap rewards.
“Innovative, integrated infrastructure backed by a national logistics network will deliver efficiencies and opportunities that can benefit us all,” he said.
David wants to give logistics a central voice and work with the government to improve the country’s productivity.
Self-driving vehicles set to be on UK roads by 2026 as Automated Vehicles Act becomes law
The Automated Vehicle (AV) Act became law on 20th May 2024. This move opens the door for self-driving vehicles to operate on British roads.
According to the DfT this new law is good news for the logistics industry. Apparently, it has the potential to create a £42bn industry and 38,000 skilled jobs by 2035. Also, in areas such as haulage, self-driving vehicles could support the shortfall of drivers some sectors report experiencing.
The AV Act states that self-driving vehicles will need to achieve a certain level of safety before taking to the roads and an independent incident investigation function will launch to support the vehicle approval system.
Experts expect automated vehicles to enhance road safety and contribute to a reduction in road collisions from human error. The AV Act is thought to be a milestone for self-driving technology and an important step forward in regulating the emerging sector.
Expert insight
“There were decisive increases for both elements of the TEG Road Transport Price Index, with both haulage and courier spot rates higher than they have ever been for the month of May. The latest CPI figure available is for April – in comparison with where that puts consumer prices, courier rates don’t look unreasonable, and haulage looks quite restrained.”
Kirsten Tisdale - Senior Logistics and Supply Chain Consultant - Aricia Ltd
In summary
May 2024 proved a significant month for the TEG Road Transport Price Index. While the 4-point jump was higher than historical Mays, the overall trend was familiar for late spring. Fuel prices moved little, while petrol dominated a year-on-year rise.
Consumer confidence appears to be improving and this will bolster the logistics sector as goods move around the country to serve demand. With the sun shining more often as we move into summer, it will be interesting to see how pre-election activities affect the temperature of the nation in June.
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