The overall price index rose by 3.2 points to 117.7 in March, marking a 2.9 point increase year-on-year. This trend aligns with historical patterns where prices typically rise after the busy holiday season, as reported in the TEG report.
“Prices tend to fall in the beginning of Q1 and start to climb again as we move into Q2,” the report explains.
The increase this month was modest, with haulage prices rising by 2 points and courier services up by 2.5 points. Year-on-year data, however, shows a more significant rise in haulage costs (up 4 points) compared to courier services (up 1 point).
Looking ahead, the TEG report suggests that fuel price increases, observed for the second consecutive month, could put further upward pressure on haulage and courier costs. While diesel prices remain lower year-on-year, the recent rise in oil prices is a contributing factor.
The recent Spring Budget included positive measures for the road freight sector, such as a fuel duty freeze. However, some industry concerns remain unaddressed, including a desire for a temporary suspension of the HGV Levy and VED on HGVs.
Another potential challenge on the horizon is the implementation of new post-Brexit border control systems at the end of April. The logistics industry has expressed concerns regarding a lack of clarity on these new procedures, which could lead to delays and disruptions to the supply chain.
“The industry requires information from the Government to prevent potential disruptions to the supply chain and avoid empty shelves,” the TEG report concludes.
Haulage firms are particularly concerned about the impact of rising fuel prices, as fuel costs are a major expense. TEG says the recent extension of the fuel duty cut will provide some relief, but the overall trend suggests that transport costs could continue to rise in the coming months.
The logistics industry is also watching developments regarding alternative fuels with interest. TEG warns that, while there is pressure to reduce emissions and move away from traditional fuels, the challenges and costs associated with alternative technologies remain significant.