Industry braces for mini-budget fallout

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Published: 20 October 2022
Categories: News Article

Road freight industry braces for mini-budget fallout

Following the mini-budget, the average price-per-mile for haulage and courier vehicles has risen for the seventh successive month, according to the TEG Price Index.

With inflation climbing again following the mini-budget announcement, road transport prices are predicted to break records in the coming weeks. The overall index’s price-per-mile is now just 2.4 points off its high-water mark, driven by dramatic increases in courier prices, which rose 5.8% year-on-year and 2.5% month-on-month.

By contrast, haulage prices dropped 15.2 points (11.1%) year-on-year, their largest annual decrease since TEG Price Index records began in January 2019.

Pressures that have affected hauliers over the last few months and years are beginning to ease, with the latest government statistics suggesting an end to the HGV driver shortage might be in sight. The number of HGV drivers in the UK now exceeds pre-pandemic levels.

Yet, neither this nor a recent dip in fuel costs could arrest the increasing overall road freight prices in the mini-budget. The industry will, however, be hoping that the recent freeze on corporation tax will foster commercial growth.

TEG Road Transport Price Index: September Summary

Road freight industry braces for mini-budget fallout
Source: Transport Exchange Group

Lyall Cresswell, CEO at Transport Exchange Group and Integra, says: “While the pound’s fall is undoubtedly adding to instability and inflation, the road freight industry is in good shape to meet any upcoming challenges head on.

“The huge increase in driver numbers is extremely positive news. It means that operators will find it easier to deal with spikes in demand – such as the Christmas rush.

“And it’s reassuring to see haulage prices coming down. They were artificially high last year, but the situation now is much healthier.

“Much will depend on how quickly financial markets stabilise – and the transport industry will certainly be watching this closely – but the sector has shown before that it can weather any storm.”

Kirsten Tisdale, Director of Logistics Consultants Aricia Limited and Fellow of the Chartered Institute of Logistics & Transport, says: ”The elements of the TEG index represent the month as a whole and plainly most of September was prior to the mini-budget, so that will not have had too much impact on the current index figures.

What businesses need, probably more than anything else, is a stable environment in which to plan and manage: stable exchange rates to buy goods and commodities, stable supply base and prices, access to a predictable volume of labour, stable interest rates to quantify investment decisions.

To say that there continues to be a great deal of uncertainty at the moment is to put it lightly!”

Written by Mark Salisbury for Fleet Point © Thursday, October 13, 2022.

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