Hauliers squeezed by rising fuel costs

Hauliers in the West Midlands today declared the price of fuel as their biggest headache as new figures reveal ever-rising costs.

A report from the Freight Transport Association says haulage rates are failing to keep up with the rising cost of diesel.

It says the cost of diesel for commercial vehicle fleets jumped 15.6 per cent in the 12 months to April 1 this year.

This is certainly the case for West Bromwich logistics firm Warley Carriers, which has sites in Oldbury Road in Sandwell, and in Belfast.

General manager Chris Kibble said the cost of fuel was by far the biggest worry for the industry – and the ever-rising price of filling up was not sustainable.

"We hear talk of fuel increases being frozen, but that is not a reduction. We are all supposed to be grateful for a freeze on any increase, but what we need is a rebate to enable us to compete with our European counterparts, or the introduction of a fuel escalator of some sort.

"This could be rolled out just to the transport industry, giving an industry dying on its knees a shot in the arm," he said.

Fuel costs used to account for around 22 per cent of the company's overheads, but the price of fuel has soared by 15 per cent in a very short time.

"We buy in 26,000 litres at a time, but we still don't save a lot. If I could have got my trucks under the canopy of Sainsbury's that is where I would be filling up.

"But we are all in the same boat. Our customers have to fill their cars up, so they know the situation we are all in. We are all sharing the pain at the pumps," he added.

The Freight Transport Association report reveals that the second biggest cost increase for hauliers was in overheads, followed by vehicle maintenance.

The total rise in vehicle operating costs of 6.8 per cent outstripped the rise in domestic haulage rates, which increased by an average of 3.41 per cent – while international haulage rates increased on average by 5.4 per cent.

Bruce Goodhart, FTA research analyst, said: "The high and rising cost of fuel continues to put companies under considerable pressure. With haulage rates failing to keep up with increasing vehicle operating costs, profit margins are being squeezed and jobs put at risk, hampering economic recovery."

The Road Haulage Association warned that the record prices for diesel are making it impossible for hauliers to absorb increases, although they were under pressure from customers to do so.

Jack Semple, RHA director of policy, said short-sighted customers who refused increases in the current climate were likely to drive their hauliers out of business.