Sunday 23rd Oct 2016 - Logistics Manager

Fuel tax hike could ‘obliterate’ some small operators, warns Wincanton

Wincanton has warned that the latest fuel tax hike could obliterate some of the smaller, more local haulage operators.

Fuel duty rose by 0.76p a litre on 1st January – the third rise since April – and it is estimated that it will cost freight transport operators an extra £95m a year.

“Haulage companies are a key part of Britain’s ‘hidden’ logistics sector, transporting the goods that we use in our everyday lives.

Nick Graham, Wincanton’s director of transport, UK & Ireland, said: “Large logistics companies like Wincanton are able to plan for these fuel duty rises, but this latest hefty leap could obliterate some of the smaller, more local operators.

“For many of these smaller hauliers, with which we sometimes partner, profit margins are generally well below five per cent of revenue and it has been estimated that fuel costs now contribute to around 35 per cent of their running costs. A growing economy needs a reliable haulage industry and the impact of such drastic fiscal measures should be reconsidered,” he said.

The Freight Transport Association reckons the 0.76ppl increase will cost the industry an additional £94.25 million per year on top of the £7.22 billion per annum already taken from the industry in fuel duty.

Chief economist Simon Chapman pointed out that rises in fuel commodity prices have already left operators facing diesel prices nine pence per litre higher than a year ago, adding £3,800 a year to the bill for running an articulated truck.

“This latest fuel duty increase, together with those previously introduced this year, will add a further £1,200 per year.”

Kate Gibbs of the Road Haulage Association described the tax rise as “little more than another kick in the teeth.”

However, the RHA has welcomed the news that the Prime Minister plans to revisit the Conservative proposal to “share the risk” of higher fuel prices between the government and road users.

“We supported the proposal of a fair fuel stabiliser when it was first raised four years ago and we shall be supporting it now,”, said RHA chief executive Geoff Dunning. “This will certainly go some way to help relieve the crippling financial burden currently being faced by UK hauliers and we shall be pressing for its implementation as soon as possible.”