Like most Western countries, the UK (United Kingdom) road transport industry is crucial to the country’s economy and infrastructure. Road freight accounts for the majority of domestic goods transport, handling around 80% of goods by volume.
The UK (England, Scotland, Wales, and Northern Ireland) road haulage sector faces challenges similar to those many countries face, including the ever-expanding driver shortage and environmental regulations (transitioning to electric and hydrogen-powered vehicles), but it also has some unique ones.
Rising fuel prices and the impact of Brexit on cross-border logistics and trade top the list of issues the UK road haulage sector faces. Brexit, or the British exit from the European Union (EU) in Jan 2020, has had the most significant impact on haulage operators, including:
- Increased administrative costs: new customs paperwork and procedures added significant administrative burdens to haulers, increasing costs per shipment.
- Border delays: long queues at ports due to increased border checks cause delays in delivery times and impact driver welfare.
- Driver shortage: many EU drivers left the UK post-Brexit, creating a shortage of qualified drivers in the UK haulage industry.
- Higher freight rates: the added costs associated with customs and border controls resulted in increased freight rates for shipments between the UK and EU.
- Reduced trade volumes: some businesses reduced trade with the EU due to the complexities of post-Brexit logistics, leading to a decrease in overall haulage volume.
Despite the challenges, the industry has recovered in 2024, with many believing the worst may be behind them, according to James Lean, Industry Director, Manufacturing Transport and Logistics, Barclays Corporate Banking. Lean noted, “It’s encouraging to see the result of this year’s Logistics Confidence Index, a score of 57.6, up from the 47.3 in 2023, showing that the sector has acclimatized to the challenging and uncertain trading environment of the last couple of years. It looks like we’re moving in the right direction, and it’s a testament to the resilience shown by many businesses in the logistics industry.
The Transport Exchange Group (TEG) Road Haulage Index reported a consistent rise in haulage and courier prices during September, continuing the steady upward trend seen in previous years. As autumn begins, the transport industry is experiencing price growth that aligns with the seasonal demand patterns.
The overall TEG Road Transport Index increased by 1.6 points to 128.3, marking a 1.26% rise compared to August and extending the positive trend. The index is now 4.06% higher than September 2023, reflecting the sector’s steady growth.
