September 2024 saw a steady increase in transport prices across both haulage and courier services, according to the latest TEG Road Transport Index data. The index, which measures market fluctuations in the transportation sector, climbed 1.6 points to 128.3—marking a 1.26% rise compared to August and continuing the upward trend observed last month.
This marks a 4.06% increase compared to September 2023.
The haulage sector experienced a notable uptick, rising by 2.2 points (1.76%) to 127.4. While this eased year-on-year growth to 7.6%, the increase is likely driven by escalating sector costs, according to industry analysts.
In contrast, courier services saw a more modest increase of 1.1 points (0.86%) in September, bringing the index to 129.1. The courier index’s annual growth stood at 1.33%, reflecting the relatively stable nature of the sector compared to haulage.
Fuel prices continue to decline
September also brought relief through lower fuel prices: diesel prices dropped by 5.98p to 141.81p per litre, a 4.05% reduction compared to the previous month. Year-on-year, diesel prices were down by 9.9%. Similarly, petrol prices fell by 5.54p to 136.79p per litre, marking a 10.93% annual decline. The current fuel prices are among the lowest since October 2021.
Despite this positive trend, experts warn of potential instability in fuel costs due to global events, particularly the situation in the Middle East, which could impact price stability in the near future.
Industry confidence on the rise
The Barclays-BDO UK Logistics Confidence Index for 2024 showed a substantial increase of 10.3 points, reaching 57.6, its highest level since 2021. This boost in confidence is attributed to improved trading conditions, with 50% of logistics operators anticipating higher profits over the next year. The research also found that 82% of operators expect the business environment to remain stable or improve in the coming months.
Jason Whitworth, a partner at BDO, remarked on the positive outlook:
“This year’s Logistics Confidence Index is a remarkable recovery from 2023, when we saw business sentiment plummet in the face of challenging market conditions.”
Hauliers face challenges with standard Direct Vision applications
While industry confidence is rising, hauliers face potential administrative bottlenecks ahead of the 28 October deadline for the Direct Vision Standard (DVS) grace period permits. Transport for London (TfL) has opened a bulk application process for operators with over 100 trucks, allowing them to apply more efficiently. However, smaller operators must submit individual applications, leading to concerns about delays and inconsistencies.
Outlook for the logistics sector
The combination of rising transport prices, falling fuel costs, and improving industry confidence paints a mixed picture for the UK logistics sector. While operational costs are climbing, reduced fuel prices and optimistic business outlooks suggest the sector could continue its gradual recovery throughout the remainder of 2024.
With the holiday season approaching, demand for transport services is expected to rise, potentially putting further pressure on pricing trends.
“The TEG haulage index shows continued growth. Diesel costs are the lowest they’ve been for three years, implying that either capacity is down, or that volumes or costs, other than fuel, are up,” says senior logistics consultant Kirsten Tisdale.