Tuesday, November 1, 2011

Freight Transport Association Warns Of Fuel Price Influence On Inflation

Survey shows costs passed onto consumer
Shipping News Feature

UK - The Freight Transport Association (FTA) has announced that in a survey of its members based in Kent three out of four transport operators have had to pass on increasing fuel costs to their customers, thereby stoking inflation, with over one in five admitting to having reduced the number of drivers in their workforce. The survey also reported that nearly one third were ‘certain’ to pass on costs further in the following year.

“These results demonstrate how much pressure Kent’s transport operators are under,” said Natalie Chapman, the FTA’s Head of Policy for Kent.

“With profit margins in the industry already wafer thin, the prospect of having to absorb two further planned fuel duty rises in 2012 does not bode well and we fear more redundancies and insolvencies in the sector.

“Fuel accounts for around 40 per cent of the cost of running a heavy truck, so rising fuel prices are an extremely daunting prospect for many in the industry.”

As a major gateway for the UK’s international trade the FTA’s survey also revealed that Kent haulage companies were universally concerned about foreign operators being in the position to utilise cheaper diesel in France before coming to the UK, thus enabling them to undercut local firms on rates.

Chapman concluded that: “The number one concern for Kent’s hauliers is the price they are paying to fill up their tanks, but around sixty per cent of this cost goes straight into Treasury coffers. While this is helping fill the deficit gap on the one hand, it is also doing irreparable damage to an industry that simply can’t compete in the face of cheaper foreign competition. The result is ultimately unemployment and insolvency which is not good news for the UK’s recovery.

“The results we have found in Kent are being played out across the whole of the UK; unless the government takes action to review its fuel duty policy, the situation will inevitably get much worse.”