Freight Transport Association research shows that thanks to soaring fuel prices, the UK freight industry operating costs have reached all time highs. The cost of running a 44 tonne articulated vehicle reaches £1,900 per year thanks to prices in diesel alone between April 2011 and April 2012.
“Fuel now represents 40% of operating costs compared to just a third three years ago” says Simon Chapman, the FTA’s Chief Economist. “Hauliers are struggling to keep their balance sheets in the black, with a growing number having to close permanently” thanks to all time high operating costs and pressure from customers not to raise haulage rates cutting haulage business.
Problems for UK operators are worsened by the duty that the Government places on diesel. At 57.95 pence per litre, UK diesel is, on average, 24 pence per litre higher than the rest of Europe.
This huge cost disadvantage means UK carriers to struggle to compete for haulage business at home as a foreign carrier coming to the UK with a full tank can undertake a week’s work using low cost, Continental fuel, before heading home.
“There is a compelling cut for an immediate cut in diesel duty. Independent research from the Centre for Economic and Business Research shows a modest 3 pence per litre cut today would be cash neutral to treasury within 12 months. The loss in revenue from duty would be fully offset by extra revenues from more rapid economic growth.”