Fuel prices crippling freight industry, says FTA 18 June 2012

HGV operating costs for the UK freight industry have reached an all time high, thanks to the soaring price of fuel, says the FTA (Freight Transport Association).

Between April 2011 and April 2012, increases in diesel alone pushed the cost of running a 44 tonne articulated vehicle up by the equivalent of £1,900 per year.

"The high price of diesel is the number one concern keeping hauliers awake at night," states Simon Chapman, FTA's chief economist.

"Fuel now represents around 40% of annual operating costs, compared to around one third just three years ago," he continues. "Hauliers face pressure from customers not to raise their haulage rates and are seeing overall levels of activity fall as the economy slides back into recession."

And he adds: "As a result, hauliers are struggling to keep their balance sheets in the black, with a growing number having to close their gates permanently."

Speaking just prior to the recent fall in prices, Chapman explained that problems for UK operators are compounded by fuel duty. At 57.95 pence per litre (ppl), UK diesel duty is on average 24 pence per litre higher than the rest of Europe.

"There is a compelling case for an immediate cut in diesel duty," he argues. "Independent research undertaken by the Centre for Economic and Business Research shows a modest 3 pence per litre cut in duty today would be cash neutral to the Treasury within 12 months."

Brian Tinham

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Freight Transport Association Ltd

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