The CEO of Transport Exchange Group (TEG), the UK’s leading online logistics platform, has warned of surging demand for road transport services in December, and the wide-ranging effects it could have. The latest data from the TEG Road Transport Price Index reveals the average price-per-mile for haulage and courier vehicles has fallen 3.3 points since a record-high peak in September.
However, the road freight industry sees prices increasing between November and December annually due to growing demand. Prices in December are predicted to lift once again, following the price surge in 2021, which reached its highest level in September.
Analysing data from the TEG Road Transport Price Index, the average price-per-mile across UK courier and haulage vehicles spiked by 5.1 points from November to December 2019, and by 7.1 points from November to December 2020. As well as demand, the price-per-mile has been pushed upwards by factors such as market capacity and underlying cost changes.
The rise in demand has continued to be particularly prevalent in the haulage industry. In November, the price-per-mile for haulage vehicles was 11.1 points higher than that of courier vehicles. This continues a seven-month run of haulage vehicle inflation exceeding courier vehicle inflation , which began in April.
High transport costs and supply chain issues have already hit retailer profits ahead of the festive period. According to recent ONS data, more than one in five businesses reported significant challenges in early November: either a lack of logistics equipment or hauliers to transport goods.
The predicted price-per-mile increase across the haulage and courier sectors is set to squeeze high-street retailers’ Christmas profits further. Already, firms such as Next and AO are citing supply chain issues for anticipated sales shortfalls.
Consumers are also set to suffer, with less choice than usual when it comes to food and drink for Christmas. The Wine and Spirits Trade Association (WSTA) has warned of potential drink shortages during the festive period.
“TEG is uniquely placed to analyse industry trends: it handles 10,000 freight transactions every day. The TEG Road Transport Price Index has been tracking over four million aggregated and anonymised transactions since January 2019, and analysis of this data reveals that a December spike in price-per-mile rates is highly likely,” said Lyall Cresswell, CEO of Transport Exchange Group.
“With Christmas being a period of extreme demand for haulage and courier services, further challenges remain, both for those working in the road freight industry and those who rely on them. To meet demand, the government has announced a range of measures to support the industry, including making more HGV driving test slots available and a temporary visa scheme for drivers from abroad.”