Industry index reveals a perfect storm of inflation and Brexit sent December road freight prices soaring. Businesses are also warned of further supply chain disruption in 2022, with new EU custom checks on imports and Omicron causing economic strain.
The average price-per-mile for haulage and courier vehicles has increased by 5.3 points between November and December, according to the TEG Road Transport Price Index. After a 3.3-point drop between September and November, the average has reached its highest level since January 2019.
The surge came during a month when inflation hit a 10-year high, which resulted in the first interest-rate rise in three years. The rise in petrol prices is a big factor driving this inflation – as well as the hike in charges for road freight services. According to ONS figures, petrol hit a highest-ever price of 145.8 pence per litre in November 2021, compared to 112.6 pence per litre a year earlier – a rise of almost 30%.
The TEG index also shows that year-on-year, the average price-per-mile for haulage vehicles increased by 30.3 points in December 2021. Courier vehicle prices have also reached a peak since January 2019 – with a 16 point year-on-year increase in December 2021.
Moving into 2022, retail experts are predicting a slump in economic growth, with Omicron leading to reduced spending on hospitality and in-person services, and more people buying goods. This is expected to cause continued strain on supply chains, which could hit the food industry particularly hard. The sector is striving to adapt to our post-Brexit world, but is suffering labour shortages that are endangering food security.
Businesses faced a new challenge as soon as the New Year began: full customs checks on EU imports to the UK were introduced on 1 January. As well as disruption at the border, this change could also lead to costs incurred through non-compliance.
Van drivers will also come up against more bureaucracy. From May 2022, they will need a new licence to enter the EU. Small traders – such as couriers and importers of wine or antiques – could incur costs of up to £1,100.