Fuel costs could force road haulage firms to shut down
SPIRALLING fuel costs may be the end of the road for many of the haulage firms that make up the key distribution sector in Peterborough.
SPIRALLING fuel costs may be the end of the road for many of the haulage firms that make up the key distribution sector in Peterborough.The warning comes after a two pence increase in fuel duty, which came into force yesterday, and may push diesel above the 1 a litre mark. It is also expected to nudge the average price of unleaded to 98 pence.
The rise was first announced in Gordon Brown’s 2007 Budget when he was chancellor and comes amid soaring oil prices and high borrowing costs.
But hauliers are warned there is worse on the way as the Budget also outlined another rise of two pence a litre next April and a further increase of 1.84 pence in April 2009.
The hike has been condemned by haulage bosses who point out the amount of tax raised by the Government on fuel is the highest in the European Union, leaving firms to struggle to compete with their overseas rivals.
Chief executive of Peterborough Chamber of Commerce John Bridge said: “We already pay the highest fuel duty in Europe and this new rise will hinder companies tying to compete internationally.
“Many lorries from the continent are fitted with large fuel tanks which allow these vehicles to stay in this country for up to 10 days without refuelling. It is an unfair advantage and, in addition, other countries offer a rebate on fuel to ensure their firms are not adversely affected.
“Last year some 45 billion was paid in fuel taxes, yet the Government only put 7 billion back into the road network.
“The impact of higher fuel costs will be to kill off our family haulage firms. It is destroying our heritage.”
Iris Frisby, a partner with E&S Frisby and Sons, of Station Road, Thorney, Peterborough, said their fuel costs soared by 20,000 last year.
She said: “We have to keep a careful eye on our fuel costs. It is a worry.
“Last year the company spent more than 197,000 on fuel costs compared to 177,000 the previous year.
“Some of the cost can be passed on to customers but, equally, you don’t want to lose customers and there is always someone else who will undercut you. It is a tough industry.”
Graham Wise, owner of Wise Trucking, of Oundle, which operates five vehicles, said his fuel costs had risen from 86,000 in 2004 to 124,000 last year.
He said: “There isn’t much you can do but to accept the increase and absorb it as reduced profit – but the industry doesn’t make large profits anyway. It isn’t possible to just to pass the rises on to the customer.
Area manager for the Road Haulage Association, Martin Dean said: “Without a doubt there will be hauliers that are forced out of business by these increases. One haulier told me yesterday that he doesn't know how much longer he can go on."
Yet the Peterborough area is very much the transport and distribution hub of East Anglia, with many small haulage and transport firms taking advantage of the area's excellent road links, such as the A1 and A14, and its proximity to east coast ports.
The area is also home to the distribution centres of many large firms, such as Tesco, IKEA and Debenhams.
Mr Dean said: "We are lobbying the Government to abolish this latest increase. This is another tax on an already heavily taxed industry."
He said that if hauliers did pass the latest increase on the impact would be felt across all parts of the economy, because most goods have to travel by road from supplier to shops.
A Treasury spokesman said the tax rise sent the right signals in the fight against climate change.
He added: "After these changes, by 2010 main fuel duty rates will be 11 per cent lower in real terms than they were in 1999. The changes were made alongside reforms to Vehicle Excise Duty that cut rates for less polluting vehicles, and a number of measures to support hauliers."
What do you think about rising fuel costs? Comment below or email Business Editor Paul Grinnell by clicking here.
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Tuesday 16 March 2010
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