Road haulage in the UK is a highly competitive and fragmented industry comprising a range of operators including haulage chains, independents and hauliers specialising in a specific type of goods, such as food or waste products.
While the road haulage industry has recorded growth over the last five years, driver shortages, rising fuel prices and the transition to net zero are significant challenges. Growing demand for road haulage across the wider UK economy has intensified the impact of HGV driver shortages and is holding back growth in the industry.
Industry snapshot
- Industry revenues forecast to grow by 0.5% per year from 2023 to 2027.
- Road haulage accounted for 85% of all domestic freight in 2022, up 7% since 2017.
- 10% fall in number of HGV drivers between 2019 and 2022.
- 17.5% fall in number of licensed HGVs between 2017 and 2022.
Sustainable operations
Rising fuel prices and stricter net zero emissions targets are accelerating the transition to electric vehicles in the road haulage industry. Demand for mixed fuel and gas-powered HGVs is also expected to increase. In addition, around 84% of hauliers believe decarbonising their operations is a high priority and 61% plan to increase investment in sustainability measures.
Freight prices
Road freight prices are expected to continue to increase in 2023 due to growing demand, rising inflation and higher fuel prices. The average price-per-mile for haulage vehicles reached its highest level for three years in 2022. More hauliers are being forced to pay higher wages and bonuses to attract and retain drivers, which is also contributing to high road freight prices.
Post-Brexit haulage
Industry experts have warned that new rules for transporting goods to Europe will lead to higher costs and bureaucracy, particularly for smaller operators. Since May 2022, anyone operating a light goods vehicle and/or trailer between 2.5 and 3.5 tonnes requires a goods vehicle operator’s licence to transport goods to, through or within the EU. Hauliers must also have a transport manager in place.
E-commerce demand
More hauliers are reviewing their operating models to capitalise on increasing demand from retailers due to the growth of e-commerce. Hauliers are working with their supply chains and retailers to develop specialised services that meet changing consumer demands. For example, consumers increasingly expect quick delivery times and precise delivery windows.
Driver shortages
The House of Commons Transport Committee has outlined recommendations to boost capacity in the road haulage industry and tackle driver shortages. Recommendations include improving driver working conditions and setting up skills bootcamps to train new HGV drivers more quickly. The committee has also called for a new ‘multi-modal’ model in which long distances are served by rail and water and shorter journeys by road.
Zero-emission HGVs
The Department for Transport has announced a £200 million programme to support the rollout of zero-emission HGVs. Over three years, the programme will fund a series of competitions to accelerate the development and commercialisation of the technology and infrastructure needed to transition to net zero. Fleet operators will also be able to bid for funding to showcase their green technology on UK roads.
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