Thursday, June 9, 2011

Road Haulage Association Issues Warnings over Future Costs to Industry

Concern at Eurovignette Decision and Rising Fuel Costs
Shipping News Feature

UK – The British Road Haulage Association (RHA) has issued warnings of its concerns for the future of the U.K.’s road freight industry after the recent decision by the European Union to allow member states to charge trucks for ‘external costs’ such as noise and emission pollution and congestion, as well as the stated intention of the British government to add over three pence per litre on diesel fuel duty at the start of next year.

In a statement concerning the ‘Eurovignette’ decision the RHA said in their analysis that:

“The environmental charges alone will add 2p per mile, congestion charges can be up 175% of off peak charges and all motorways could be affected, not just the Trans-European Networks (TEN-T). One press report calculates that barely 5% of the new money raised will be spent on the TEN-T road networks, which means that 95% of that money could be lost in administration costs or transferred to other modes.”

The RHA also expressed concern that money charged on the road freight industry would not be “…used exclusively for investment in the road network for environmental improvements. So called earmarking will be allowed but not all will be passed back to road users. In other words Member States will not have to use revenues to reduce any of the problems for which the road haulage sector will be charged.”

"Much is left to local negotiation and so long as revenue neutrality is maintained, the long term effects in the UK, which does not have many tolls, may be small," said Peter Cullum, the RHA’s Head of International Affairs.

"However, that will not be the case in Europe where British hauliers operating abroad will have to pay any new charges without offsets.

"In addition", he continued, "if the UK introduces a new road charging regime it would have to comply with the Directive and use an electronic system, which means road usage costs could double. And regardless of the UK there is also a risk that affected motorways could see peak time tolls double anyway without any meaningful offsets for road users.

"Until foreign hauliers pay towards use of our roads we will continue to subsidise the competition. “

The RHA has also written to the Chancellor to express their objection to proposed tax hikes on diesel scheduled for the 1st of January, 2012.

“The price of diesel, despite a temporary dip, is continuing its upward spiral”, said RHA Chief Executive Geoff Dunning.

“In the past eighteen months, as a result of duty and oil price rises, the cost of a litre of diesel has risen by 19%; and that doesn’t even take into account January’s 2.5% increase in VAT.”

Diesel fuel hit an average price at the pump of 143p/litre ($9.56 per gallon) in May, much of which goes in taxes to the government.

With a third of a truck’s running costs in the UK made up of fuel bills the RHA is determined that the industry cannot remain a cash-cow indefinitely.

“For far too long road hauliers have been regarded as a reliable source of income through direct and immediate tax. This industry provides an essential link in today’s supply chain network yet it seems we are being penalised for operating in a cost effective, economically viable and environmentally friendly manner,” added Dunning, further warning that:

“If the UK road transport industry is to weather this critical stage of economic recovery, the Chancellor MUST reconsider his 3.02.ppl duty rise planned for 1 January and MUST produce a workable solution to stabilise fuel prices.

“If these two issues are not tackled as a matter of extreme urgency, the future prospects for the UK economy and its hauliers, at best, look depressing indeed”.