Road freight prices peak with rates highest since December 2022, TEG Index reveals

According to the latest TEG Road price Index, courier prices rose 4.8 points from 128.0 to 132.8, placing last month’s courier prices at their highest since December 2022, with the largest month-on-month percentage hike since the same period.

Similarly, haulage prices have also reached their highest since December 2022, rising 4.7 points from 115.4 to 120.1.

However TEG’s report on its latest Road Transport Index warns that operators will continue to face major challenges this year and calls for greater government support for the sector.

It states: ”After a year of record insolvencies, 2024 drew to a disappointing conclusion following an Autumn Statement lacking in provision for struggling UK hauliers. With focus now firmly on the year ahead, the industry looks to the government for progress reports on the upcoming initiatives laid out in 2023, in steps towards achieving net-zero and improvement of road surfaces.

It adds: ”While fuel prices gradually settle, the scheduled increase to fuel duty in April will mean costs for operators are likely to mount throughout the year. Without substantial fiscal aid from the government, operators will continue to contend with low profit margins and soaring overheads.”

The report also notes that “dramatic” fuel price decreases will be welcome news to operators tightening budgets in the busiest period of the year, with current petrol prices at 142.43p per litre (-8.59p change), and diesel prices at 150.88p per litre (-8.09p change).

It adds that wholesale fuel prices also fell “significantly” in the lead up to Christmas, with petrol and diesel down 12.87p and 28.27p respectively from last December and set to fall further this month.

The TEG report also hails the accelerating strides hauliers are making to meet net zero targets, with technical innovation playing a significant role.It points to Nestlé’s efforts as an example. The company is testing two battery electric Volvo FM tractor units as potential additions to its fleet; with ranges of 120 miles and invested in charging infrastructure at its sites in York, Halifax, Tutbury, and logistics warehouse East Midlands Gateway. Nestllé has also replaced 11 HGVs with bio-LNG fuel in 2022 and  looks set to incorporate HVO into its fleet in 2024.

DAF is also highlighted in the report. The manufacturer has published the findings from its £10m Battery Electric Truck Trial (BETT) which finalised in October 2023. Initial feedback from drivers was wholly positive, despite slight concerns over range and reliability, the report said.

The report also predicts that fleet versatility will be a key factor in achieving net-zero, adding that, with a wider range of alternatives to traditional HGVs, ”operators will be paying close attention to the frontrunning technology when looking to invest in green freight”.

The TEG report welcomes the Driver CPC reforms, which propose a relaxation of requirements. It states: ”With current CPC processes argued by many to be cumbersome, proposed reforms to requirements by the government will hope to remove obstacles to training, and tackle the HGV driver shortage.”

The DfT is proposing a National DCPC and an International DCPC, with the latter needed for drivers crossing into EU nations and complicit with terms agreed between the UK and the EU.

The reforms will also look to reduce the minimum length for each training module to 3.5 hours, de-couple e-learning from trainer-led courses, develop more core course content with the DVSA and encourage informal assessment at the end of modules.

However it notes that the RHA has raised concerns about the extent of the reforms, warning that the loss of training hours with no associated training mandate will compromise safety.

TEG is also forecasting that accelerating digitalisation will require greater resilience against cyber crime. The report states: ”While historically slower to embrace technological advancements, haulage has rapidly improved its digital offering in recent years.

”The transport industry is now among the leading industries driving digital innovation, and with AI technologies now commonplace, 2024 will be a testing ground for further advancements.

”However, we have seen the vulnerability of the industry against cyber attacks, with the likes of KNP Logistics, Royal Mail, Owens Group and Mandata falling victim to cyber crime in the last 18 months. As technology improves, so do the threats against companies, with a greater need for robust and cutting-edge cyber defence systems.”

In summary the report states that the recent drop in inflation along with falling fuel prices marks a ”promising start” to 2024. However it argues that UK hauliers will remain cautious. ”The lack of urgency from the government in enacting road repairs will be a concern to many, with repair bills mounting as a result of damage to fleet vehicles.

”The industry also awaits news on the £2bn pledged to assist the manufacturing of zero-emission HGVs, with the costs associated with reaching net-zero still a top priority.”