Higher fuel prices impact hauliers operating costs, warns FTA 05 September 2011

The high cost of fuel remains the biggest cause for concern among haulage operators, according to the July 2011 update of the FTA's Manager's Guide to Distribution Costs.

Commercial vehicle operators continue to be squeezed by rising operating costs as well as pressure for earlier payment terms from suppliers, while facing downward pressure on haulage rates and lengthening payment terms from customers, it confirms.

FTA's latest update calculates that, on average, vehicle operating costs for rigid, articulated and drawbar vehicles have risen by 5.6% in the year to 1 July 2011 and remain close to the all-time highs recorded as at 1 April 2011.

The largest contribution to the rise came from an increase in the price of diesel, which has risen by 12% in the year to 1 July 2011. In addition, tyre costs have risen by 7.3% and overheads by 5% in the same period.

By contrast, increases in haulage rates have not matched the rise in operating costs. According to calculations in FTA's update, domestic haulage rates have risen by just 1.8% on average in the six months to 1 July 2011, while international haulage rates have risen by an average of just 1.5% in the same period.

Just over half of the contributors to the update indicated that they had not increased their haulage rates since the start of 2011.

"Hauliers were able to ride out the recession by reducing margins and delaying vehicle replacement," comments Bruce Goodhart, FTA research analyst.

"However, they are continuing to feel the pinch, with rising input costs, the high price of fuel and pressure from their customers not to increase charges. Economic growth is currently very weak in the UK and it is likely that some hauliers may not be able to sustain their business in these circumstances."

Author
John Challen

Related Companies
Freight Transport Association Ltd

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