With diesel hitting historic highs and right-to-work checks now covering individual subcontractors — carrying civil penalties of up to £45,000 per breach — October’s carrier rates and availability data will show which pressure is hitting hardest. TEG CEO Lyall Cresswell sets out what operators need to watch and act on now.
Peak season always tests road freight. This year it starts with two further pressures.
In early October, diesel prices reached the highest levels ever recorded. Prices have since tempered but they remain, historically, lofty.
And, on 1 October, UK right to work rules changed. Checks now cover individual subcontractors, not just employees. And liability can reach further up the contracting chain, with civil penalties of £45,000 per worker for a first breach.
Both hit an industry made up largely of small businesses working on thin margins. More than nine in 10 operators have fewer than 10 employees. The RHA’s most recent Haulage Cost Movement report puts profitability at around 2%, with non-fuel operating costs up 5.91% year on year. That leaves little room to absorb another rate rise.
Because record diesel prices and the new right to work rules have both landed at the same time, pinpointing how each individual change has affected the logistics market might prove tricky. But TEG’s proprietary data will offer clues.
Diesel is a cost. On the TEG platform, which helps enterprise logistics businesses source carriers, rates are set on the spot for each load. So when fuel rises, carrier rates typically rise but carriers keep working. Higher diesel prices should therefore show up in rates, with little effect on how many carriers are available.
Right to work, by contrast, is about who can work in the first place. A driver unable to pass a right-to-work check can’t take a load, whatever the rate might be. If the new right-to-work rules have an effect, it’ll show up in carrier availability.
We can see both rates and carrier availability in TEG data. TEG handles around 3 million loads a year across a network of more than 10,000 transport businesses, and our Road Transport Index tracks what those loads cost each month. In September the Index reached 141.6, the highest since reporting began in 2019. In recent years the pattern has been consistent. Rates typically reach a high point in September then dip in October, by around 2%, before climbing to their calendar-year peak in December.
Capacity moves in the opposite direction. TEG data shows month-on-month carrier availability (as measured by number of quotes provided) usually rises by around 30% in October, as more carriers come into the market for peak season.
That makes October a useful test this year.
If rates rise but carrier quotes grow as normal, fuel is the main story. Carriers are passing on higher costs, and the driver pool is intact. If quote growth is noticeably weaker than usual, something else is happening. A smaller pool of drivers able to work would be the most likely explanation. That’s what we’d expect if the new rules reduce capacity.
One month of data isn’t proof – supply varies from year to year. But a break from a pattern that has held in recent years is worth paying attention to.
Whatever October’s data shows, the new right to work rules already change how operators run their business. The practical point for operators is that responsibility now sits further up the chain. A business that subcontracts a load can no longer assume the check happened somewhere else. Operators need to know exactly who is carrying each load, and have proof that every driver has passed a check.
That’s a burden, particularly for smaller operators without a compliance team. But it’s also an opportunity to raise standards across the industry. Verification works best when it’s shared. That’s the thinking behind Trustd, the digital identity and credentials verification platform for transport and logistics. A driver checked once, to a consistent standard, and visible to everyone they work with, is a driver that shippers and subcontractors can trust. That means less duplication for drivers and less risk for the businesses that engage them.
This is where collaboration matters. Shippers, 3PLs and carriers all have an interest in a compliant and available driver pool. Nobody benefits from a peak season where capacity disappears at short notice, or where a load is handed to someone who shouldn’t be driving it.
Fuel prices will follow the oil market. The right to work rules are permanent. The businesses in the strongest position this winter will be the ones that know exactly who is moving their loads and can prove it.
Lyall Cresswell, CEO and founder, TEG and Trustd
