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3PL Carrier Procurement in 2025: Trends, Insights and Opportunities
4th February 2025
The TEG Road Transport Index fell by 9.8 points in January 2025, reflecting a 7.41% fall in transport prices during the first month of the year. While the month-on-month index has fallen consistently every January since 2020, during the last 12 months it has risen 6.3 points (5.42%).
The haulage sector saw the steepest fall, dropping 12.1 points (9.16%) in January. But again, year-on-year, haulage prices have risen by 9.39% (10.3 index points).
Experiencing a lesser fall, the courier index dropped by 7.7 points (5.81%) last month. The year-on-year situation was less marked, with courier prices rising only 1.88% (2.3 index points) compared to a year ago.
January is inevitably a quieter month after the peak season, so it’s unsurprising to see the TEG Index fall across the board.
Historically, January is a quieter month for transport. It’s common for consumers to rein in their spending after festivities in December, reducing demand across many sectors (although some will have seen additional spending due to January sale activity). Trends aside, feelings about what the year ahead looks like currently appear mixed.
As temperatures dropped a little in January, so did consumer confidence - the GfK index fell by five points last month. In a recent survey, Reuters described early 2025 growth as “tepid”, also suggesting both employment and optimism were contracting again.
Meanwhile, with inflation remaining stable at 2.5% in January, most expect the Bank of England to trim interest rates from 4.75% to 4.5% in February.
And yet, geopolitically, there is the Trump factor to watch out for. Back at the helm, recent announcements such as the USA placing tariffs on Canada, Mexico, and China are bound to have global repercussions. Time will tell what this looks like and how it may impact various business sectors.
Recent Statista research provides a little optimism for global parcel shipping. It predicts volumes will grow by 59% by 2027 (from 2022 numbers) to an eye-watering 256 billion parcels, boosting demand for the logistics sector.
The Mergers and Acquisitions Index (RPGCC and Logistics UK) also suggests “cautious optimism”. The 2024 score returned to positive (50.2) and the industry optimism score for the year ahead stands at 5.53 out of 10.
Fuel watch
January continued the steady upward trend we’ve seen for fuel prices since June 2024. However, both petrol and diesel pump prices remain lower than they were 12 months ago.
Diesel crept up to 144.12p per litre in January. This was an increase of 1.6p per litre since December (1.12%) which proved slightly lower than the previous month’s rise (1.46%). Compared to January 2024, when the price was 148.26p per litre, diesel was 4.14p cheaper in January 2025.
The price of petrol also nudged upwards, but only by 0.88p (0.65%). The price per litre in January was 137.11p per litre. Like diesel, this rise was lower than the previous month, when petrol prices rose by 1.06%. And petrol was also cheaper than in January 2024 - 2.75p per litre lower.
RHA overpayment legal action: opt in for compensation by 28th February
UK hauliers who purchased new or used trucks between 1997 and 2015 may be eligible for compensation when they opt into the Road Haulage Association’s class action claim in the Competition Appeal Tribunal. They have until 28thFebruary 2025 to do so.
Led by the RHA, the group legal action seeks compensation for hauliers who overpaid for trucks because of a cartel of truck manufacturers. While thousands of UK businesses have already registered, an estimated 600,000 trucks are thought to have been affected. Businesses do not need to be a member of the RHA to opt in and the claim covers all makes of truck.
Eligible UK businesses will have purchased or leased new or used trucks of six tonnes and above, which were registered in the UK between:
17th January 1997 and 31st January 2014 for new trucks.
17th January 1997 and 31st January 2015 for used trucks.
Eligible claimants can opt in via www.truckcartellegalaction.com. The 28th February deadline is already an agreed extension due to the high number of truck owners signing up.
AFP calls for deferral on electric van MOTs due to shortage of availability
Electric van fleets are finding it “impossible” to book MOT tests for 4.25-tonne vehicles, according to the Association of Fleet Operators (AFP). The association is therefore calling for an official deferral on tests while the situation resolves.
For MOT test purposes, 4.25-tonne electric vans are treated as HGVs. They must therefore be tested at one year old rather than three and face more rigorous examination. Fleet operators say they’re spending “months” trying to find availability in garages able to carry out the tests.
As it stands, untested vehicles must be taken off the road, reducing fleet capacity for businesses using them.
Lorna McAtear, Vice Chair at the AFP, said: “The whole point of this category of van when it was introduced in 2019 was to provide easy access for fleets to an electric equivalent of a 3.5-tonne panel van. These vehicles are simply 3.5-tonne vans with bigger batteries. It’s questionable whether 4.25-tonne electric vans require HGV tests, an argument we have been making to government for some time.”
The AFP wants to see the introduction of dispensation, allowing MOTs to be deferred on this category of electric van for six or 12 months for the first two years of testing. This would give operators time to find suitable testing facilities.
Expert insight
“The TEG Haulage index is down January against December, but within the bounds of what was expected – it happens at the start of every year. Meanwhile the TEG Courier is only down 6% versus last month, a bit less than expected, but we know from the IMRG Weekly eCommerce Round Up that online furniture was doing extremely well in January, despite the GFK Consumer Confidence survey in the first half of January showing a reduction in the number of people who thought it was a good time to buy a major purchase - mixed messages!”
Kirsten Tisdale – Senior Logistics and Supply Chain Consultant – Aricia Ltd
In summary
The TEG Index performed much as expected in January, dropping 9.8 points. The downward trend was similar for both haulage and courier prices as businesses typically experienced quieter trading after the festive period.
Fuel prices continued to rise, albeit modestly, and by less than in December. Diesel and petrol prices also remained lower than they were in January 2024.
The economic situation, and ongoing cost pressures, may have held early 2025 growth back to “tepid” at most. And recent geopolitical events, especially in the USA, suggest we may be in for an unpredictable time as Trump’s changes impact other countries.
But spring and a potential interest rate cut are around the corner, hopefully boosting consumer confidence for February. There’s plenty to keep an eye on and timely insight from TEG continues to help those in transportation build the best possible picture.
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