The combined price-per-mile for haulage and courier vehicles rose 0.5% during March and 2.8% year-on-year, marking the start of the traditional Spring price rise, according to the latest latest Transport Exchange Group (TEG) Road Transport Price Index.
TEG’s Road Transport Price Index for March 2023 is up 2.8% compared to March 2022, driven by strong year-on-year growth of 6.4% for courier prices. By contrast, haulage prices are down 1% on 2022 levels, although they increased by almost 2.2% during March.
The report to the Index said that the Spring Budget had brought a mixed bag to the transport industry which would continue to affect pricing.
It noted that whilst Chancellor Jeremy Hunt’s Spring Budget had kept fuel duty frozen and exempted HGVs from a vehicle excise duty rise, it had also brought the return of the HGV levy in August this year and delivered no support for electric vehicle adoption.
The report stated: “Overall, the budget provided some short-term comfort for road transport operators, without giving them the kind of longer-term support they were looking for. As a result, Jeremy Hunt’s plans won’t have convinced many freight companies that they can drop their prices just yet.”
TEG also noted pressure from the ongoing impact of Brexit on the economy, pointing to the Office of Budget Responsibility’s recent assessment that Brexit has shrunk the UK’s GDP by 4% with the UK’s inflation rates rising 4.4% faster than in the Eurozone.
“All of this points to more tough economic times ahead and, potentially, road transport prices increasing further, in line with inflation,” the report warned.
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Turning to fuel costs the report said that March brought no dramatic change in either diesel or unleaded prices. However average diesel prices dropped more than unleaded - by 2.28p compared to 0.8p.
The report added: “Both couriers and hauliers will be hoping the trend continues, which might allow them to bring their prices down – or at least enjoy a larger profit margin.”
The upcoming increase in corporation tax will also encourage road transport companies to tighten their belts, the report predicted, particularly whilst energy costs and inflation remain high and the cost of living crisis puts pressure on employers to hike wages.
The report concluded: “Overall, the UK’s economic outlook is still far from stable and remains difficult to predict. And against that backdrop, road freight companies will face some uncertainty in the coming months.”
It added: “If the index follows the pattern of previous years, we can expect steady price increases from now until at least summertime.”
However the report cautioned that “with so many variables at work even operators might not be sure about their pricing strategies right now.”