Greater London is being hit by rising road freight costs that are double that of the rest of the UK, new research has revealed.
According to the Transport Exchange Group's latest Road Transport Price index, the average price-per-mile for haulage and courier vehicles in Greater London jumped by 11.6 points from March to April 2022.
Conversely, across the UK as a whole, the increase was half that, rising 5.3 points over the same period.
The Transport Exchange Group (TEG) index shows that average UK haulage and courier prices are following previous years’ trends, witnessing a fall after the usual Christmas and New Year spike and then increasing month-on-month.
The index also reveals substantial year-on-year increases, with the average price-per-mile increasing by 16% in three years – from 100.9 points in April 2019 to 117.5 points in April 2022.
Launching the index, the Transport Exchange Group pointed to post-Brexit bureaucracy, delays in checks on EU imports and predictions of 10% inflation later in the year, as key triggers for the surging transport costs.
However the group said the data suggests these rising costs aren’t necessarily being felt by businesses and consumers to the extent that might be expected, as consumers curb spending in the face of the cost of living crisis.
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TEG said: "With the increased cost of living – notably energy price rises – many consumers are cutting back on their spending to balance household budgets. Consumer confidence has been reported as hitting an all-time low and the ONS announced a 1.4% decline in retail sales in March.
"Even spending on food was down 6.1% in March, when compared to February. Reduced demand from consumers means reduced demand for freight, keeping freight month-on-month price rises relatively modest."
TEG said there was also evidence transport and storage businesses are acutely aware of pressures on consumers. According to ONS data, 56% of these businesses reported an increase in the price of materials, goods and services needed to run their business. Yet only 35% have passed on some or all of those increases.
Lyall Cresswell, CEO of Transport Exchange Group, added: "We’re continuing to see that the TEG index is a result of many different factors, all of which affect the state of the industry. Haulage and courier businesses have to respond to fluctuations in costs and there will then be knock-on effects for the many industries that work with them.
“At the moment, demand for freight from these industries clearly isn’t quite what it was, largely due to cost of living rises. Consumers are buying less, which is keeping a lid on the price-per-mile figures, despite other factors, such as high fuel costs and Brexit red tape.
“This isn’t the case in London, however, where price rises in the last month were double the national average. What we have right now then is almost a two-speed situation, with prices in the capital soaring and relatively low rises elsewhere. What remains to be seen is whether the conditions in London drive prices around the UK up.”
