12/05/14: Average grain haulage costs in 2014 down 1.2%, but costs for longer journeys increase

Results from AHDB/HGCA’s UK Grain Haulage Survey 2014 show a 1.2% decline in average journey costs, compared with last year’s survey.  The average journey in 2014 cost £8.43/t, compared with £8.53/t in 2013. However, although a decline in journey costs was seen for distances lower than 80 miles, the reverse was true for longer journeys.

The survey of 227 journeys across the UK revealed varying changes in costs, depending on distance and region. In 2014, a journey of 10 miles was £0.59/t lower (-12.0%) than in 2013, whereas a journey of 150 miles was £0.59/t higher (+4.4%). The cost of a journey of 90 miles or more was the highest since at least 2004. The average per mile cost of grain haulage for 10 mile journeys was £0.46/t/mile (12.9% lower year-on-year), whereas for 150 mile journeys, the cost was £0.09/t/mile, unchanged from the previous year.

Regional trends:

• Scotland: highest journey costs for distances of 80 miles or greater, compared with the rest of the UK; however lower costs for 150-mile journeys compared with 2013.
• Midlands: lower costs for 50 to 150-mile journeys compared with 2013 (there is no comparable 2013 data for 10 to 40-mile journeys).
• Eastern England: the only region to report year-on-year higher haulage costs for 10 to 150-mile journeys.

English: United Kingdom: Flag with Outline Map Magyar: Egyesült Királyság: Zászló vaktérképpel (Photo credit: Wikipedia)

The average retail diesel price from July 2013 until end-April 2014 was 138.52 pence per litre, 2% lower than during the same time period in 2012/13. The strengthening of the pound sterling against the US dollar is a key factor behind the decline in price.

AHDB/HGCA Senior Analyst, Amandeep Kaur Purewal, said: “From this survey we can see that fuel costs are not the only factor affecting grain haulage rates. Higher costs for longer distances may be due to empty, or lower than capacity, back-loads. Lower production in 2013/14 may have meant that the wheat crop travelled over longer distances in the UK. The north of the country has experienced more of a deficit than usual, so more grain has had to travel from the south-east.

“Looking ahead to 2014/15, plantings indicate a return to a “normal” cropping mix in the UK, so the 

higher expected volume of wheat could provide higher demand for haulage, with potential implications for costs. This is against the backdrop of an anecdotal decline in haulage capacity during the low production years of 2012 and 2013.”

Data for the 44^th AHDB/HGCA UK Grain Haulage Survey were collected online from grain hauliers over four weeks, from 27 March to 25 April 2014.

Full results for this year’s survey can be found on the HGCA markets website: http://www.hgca.com/markets/survey-results.aspx

The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT which is published by Perendale Publishers Limited.