TEG reports December record high for transport prices

An industry index of road freight prices published by Transport Exchange Group (TEG) reached record heights in December, in a surge attributed by the freight exchange services provider to a ‘perfect storm’ of inflation and Brexit, which compounded the usual seasonal high demand.

Following an earlier drop-off in the autumn, the average price per mile for haulage and courier vehicles rose by 5.3 points between November and December, according to TEG’s Road Transport Price Index – taking average prices to their highest level since the index launched in January 2019.

The index charts the price per mile cost of road transport each month, using data from over four million aggregated, anonymised transactions.

Year on year, the average price per mile for haulage vehicles increased by 30.3 points in December – with courier vehicles also seeing a 16-point year-on-year increase.

The reported hike came as inflation also hit a 10-year high, resulting in the first rise in interest rates in three years. In addition to this, the surge in prices since December 2020 was partially attributed to the impact of driver shortages.

TEG warned of further ‘haulage headaches’ to come in 2022, particularly for the food supply chain, with retail experts predicting a slump in economic growth, and the continued impact of the Omicron Covid variant on spending.

Lyall Cresswell, CEO of Transport Exchange Group, said: “This December surge was expected, thanks to historical TEG data, not to mention it being a period of extreme demand for haulage and courier services.

“Brexit and Covid-19 continue to be the two main headaches for the road freight industry. Brexit has not only caused many drivers to leave the industry: it’s also resulted in much more red tape and delays whenever drivers cross borders.”

Kirsten Tisdale, director of logistics consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, added: “What we’re seeing with the TEG Index is a combination of a normal seasonal high, superimposed over driver availability and other cost issues.

“The uplift from November to December at the end of 2021 is not dissimilar as a percentage to that in 2019 but starting from a much higher base.

“Haulage continues to track at a somewhat higher level when compared with the courier element, and we know from Logistics UK’s recent Skills & Employment Report 2021 that the latest figures show there are now less HGV than van drivers.”