Haulage prices have fallen 11% in the past year, but are likely to rise as the thinly spread road freight industry enters its busiest period, according to the latest Transport Exchange Group Price Index.
The report found that the average price-per-mile for road freight vehicles has dropped for the second month in a row, as the industry prepares for its peak demand period.
The research found that haulage prices have decreased by 1.9 points during November. By contrast, courier prices are already on the way up, rising 0.6 points.
However the Transport Exchange Group (TEG) warned this week that the ongoing HGV driver shortage, combined with rising peak period demand, will see the workforce stretched to its limit, forcing the haulage price index to rise.
Hauliers will also have to face the challenge of the proposed 23% increase in fuel duty, effective from March next year, TEG said. This could see 12p per litre added to petrol and diesel prices, bringing a rise in overheads for companies, just before the Energy Bill Relief Scheme (EBRS) comes to an end.
TEG is predicting that with inflation hitting a 41-year high of 11.1% in November, many road freight businesses, that are already operating on thin profit margins, will be forced to pass price rises on to their customers and ultimately to consumers.
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Lyall Cresswell, chief executive at TEG and Integra, said: “Although the cost of living crisis will undoubtedly impact Christmas sales figures, the price index will inevitably rise, as all the previous data tells us.
“Road freight companies will welcome the increased revenue, but the HGV driver shortage will pose staffing issues across this busiest of times. Nonetheless, businesses will be looking to take advantage of the Christmas delivery surge, particularly as 2023 will bring challenges in the form of fuel duty and energy price hikes.
“In common with every sector, what the road freight industry really needs is a drop in inflation. Until that happens, profit margins will be squeezed and the industry will have to focus on efficiency and show its customary adaptability.”
Kirsten Tisdale, director of logistics consultants Aricia and Fellow of the Chartered Institute of Logistics and Transport, added: "Despite conforming to a pretty regular pre-peak dip, it feels surprising that the haulage element of the TEG index for November is now at the same sort of level as it was in late spring, particularly given that fuel prices are still so high.
"The comparatively high levels of logistics job adverts must be a function of the tight employment market rather than reflecting a high level of demand.”