The latest TEG price index data reveals road transport businesses passing soaring operating costs onto customers, as June’s average price-per-mile for haulage and courier vehicles reaches 18% more than three years ago, and its highest level so far in 2022.
The average price-per-mile for haulage and courier vehicles has jumped from 103.1 points in June 2019 to 122.0 points in June 2022, according to the TEG Price Index.
In the last year alone, the TEG index shows a year-on-year price-per-mile increase of 4.3 points.
This surge in what hauliers and couriers are charging comes against a backdrop of record-high fuel prices in the UK: 167p for petrol and 180p for diesel.
“From operational costs to ongoing driver shortages, we hear about industry issues every day from our members. However, they’re coping admirably with the pressures and the constantly shifting landscape," said Lyall Cresswell, CEO at Transport Exchange Group.
With fuel prices and inflation continuing to soar, road freight businesses are facing a squeeze on their profit margins, leaving them with little choice but to increase the price of their services, according to the news release.
The year-on-year index figure has climbed consistently every month since the start of 2021. This reflects the cost pressures building in the road freight industry over the last 18 months, including the driver shortage, rising salaries, and a hike in companies’ national insurance payments.
According to the Road Haulage Association, fuel represents over a third of a truck's operating costs, and profit margins are between 1% and 2%.
The need for relief from runaway inflation is becoming increasingly urgent. For 60% of the UK public, total bills are higher than income, according to researchers at the National Institute of Economic and Social Research.
“The TEG Road Transport Price Index continues to give insight into the UK freight market," said Kirsten Tisdale, director of logistics consultants. "The ever-tightening squeeze on the profits of the road transport sector and the impact on customers can also be seen in the latest Business Insights survey by the Office for National Statistics, where 1 in 8 of the responses for Transport & Storage companies indicated that they were having to seek financial support (up from zero in the previous survey where this question was asked), aggravated by the trend for increased stockpiling.”