TEG Road Transport Index reaches highest monthly increase since 2021

Freight prices followed a similar upward trend. The haulage index rose by 3.9 points to 118.5, an increase of 3.4%, in line with the overall increase in the TEG Road Transport Index, the report said. Courier prices also saw a significant increase, rising 3.8 points to 126.7, an increase of 3.09%, slightly less than the increase in haulage prices.

Trading activity in May was affected by two bank holidays, which the TEG report suggests may have contributed to price rises due to fewer working days and tighter schedules. Despite a challenging retail performance in April, possibly due to cost-of-living concerns and adverse weather, the GfK consumer confidence index rose by two points in May. This improvement suggests either a lag in demand from April or a more optimistic economic outlook.

As a result, the report indicates that demand for haulage and courier services increased in May. Fuel prices showed modest changes in May. Petrol prices rose slightly by 0.74p to 148.81p per litre (0.49%), with a year-on-year increase of 4.36p per litre (3.01%), according to the report.

Diesel prices, on the other hand, fell slightly to 156.31p per litre (-0.52%). Despite this monthly fall, diesel prices are still 1.62 pence per litre higher than a year ago, an increase of 1.04%, the figures show. While fuel prices remain relatively stable, global events, particularly in the Middle East, could cause sudden fluctuations, TEG adds.

TEG also mentions the Automated Vehicle (AV) Act, which came into force on 20 May 2024 - the company says it paves the way for self-driving vehicles on UK roads. The Department for Transport (DfT) sees this legislation as a significant boon for the logistics industry, with the potential to create a GBP42 billion industry and 38,000 skilled jobs by 2035. Self-driving vehicles are expected to alleviate driver shortages in the haulage industry and improve road safety by reducing collisions caused by human error, TEG adds.

Kirsten Tisdale, a Senior Logistics and Supply Chain Consultant at Aricia Ltd, noted the unprecedented rise in both haulage and courier spot rates for May, marking a historic high for the month.

Tisdale pointed out that in comparison to April's Consumer Price Index (CPI) figures, the courier rates are reasonable, and haulage rates appear restrained.