Good morning, and welcome to TEG Transport Insights.
Yesterday, according to the TEG Price Index, July transport prices rose beyond those of December 2025. In a typical cycle, December prices would remain unsurpassed until the following December. With pricing patterns already broken and Middle Eastern tensions rife, this year, how high can we expect transport prices to climb?
Middle Eastern tensions are the most salient determinant. When the US and Israel launched strikes on Iran in late February, oil markets moved immediately. Hormuz’s closure sent Brent crude skywards, and diesel prices soon followed. The recent ceasefire offered some relief, but last week’s fresh strikes have introduced a fresh feline amongst the pigeons. We all expected the war to wane, at least until the US mid-terms in November. Iran, apparently, had other ideas. That leaves UK transport pricing dependent on a war playing out 3,500 miles away that even the world’s mightiest military power seems unable to direct. For as long as the strikes continue, we can expect transport prices to climb.
Compounding the surge, of course, is an impending infrastructure constraint. While it’s hard to pinpoint quite how short of HGV drivers our sector is, there’s widespread agreement that carriers are scarce. And it’s during peak that the shortage really shows. The question in 2026 is: will this year’s shortage prove particularly pronounced? As I’ve written before in these notes, the unexpected surge in fuel prices this year squeezed carriers whose margins were already thin. We don’t yet have stats on how many have exited as a result, but the net figure is unlikely to be negative. Fewer carriers now seems set to exacerbate an already alarming situation – especially as Hormuz grants carriers a long overdue window for rate adjustments beyond the cost of fuel alone.
There is, perhaps, one major pricing headwind on the horizon – but it’s one few are hoping for. Just as the war in Iran has raised transport costs, it has also raised living costs. High oil prices make for high grocery prices. They make for high heating bills. They make for high manufacturing costs, high commuting costs and, eventually, higher interest rates. So far, the war in Iran has done little to quash UK consumer spending. If the war goes on, sooner or later, consumers will need to bolt their wallets. That would temper transport prices. But it would not be positive news for transport.
As humans (and particularly as humans in the transport sector), we are of course prone to optimism, and we can all hope that the renewed strikes in the Middle East are short lived. Against such an uncertain backdrop, though, we should also take steps to de-risk our operations. I’ve spent as much time as anyone staring at the TEG Price Index, trying to work out which way prices are about to go. The fact I’m as often wrong as I am right is one of the reasons I’m entirely comfortable promoting TEG’s Carrier Sourcing as a solution.
If you don’t know which way prices are going to go – or even which way the economy is going to go – access to flexible capacity helps. With TEG it’s available. Even for large operators.
