Friday 21st Oct 2016 - Logistics Manager

High fuel prices hit transport costs

The price of fuel rose 12 per cent in year to 1st July squeezing margins for operators, according to the Freight Transport Association’s Manager’s Guide to Distribution Costs.

In total vehicle operating costs are now 5.6 per cent higher than a year ago but haulage rates are not keeping pace.

According to calculations in the FTA’s update, domestic haulage rates have risen by an average of 1.8 per cent in the six months to 1 July 2011 and international haulage rates have risen by an average of just 1.5 per cent in the same period.

Change in costs
(12 months to 1 July 2011 for rigid, articulated and drawbar vehicles)

Diesel: +12.0 per cent
Vehicle costs: +7.7 per cent
Tyres: +7.3 per cent
Overheads: +5.0 per cent
Maintenance: +3.9 per cent
Employment cost of driver: +2.1 per cent
Insurance: +2.1 per cent
Depreciation: 0.0 per cent
VED: 0.0 per cent

Total vehicle operating costs: +5.6 per cent
Total vehicle operating costs excluding fuel: +2.8 per cent

Analyst Bruce Goodhart said: “Hauliers were able to ride out the recession by reducing margins and delaying vehicle replacement. 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.”

The FTA’s Manager’s Guide to Distribution Costs is produced annually based on data gathered from a survey of FTA members in April each year, as well as data from other independent sources. The data on wages, vehicle operating costs and haulage trends is then updated quarterly as at 1 July, 1 October and 1 January.