The FTA met with the Treasury last Thursday (5 February) to discuss the real effect the plummeting cost of oil was having on the freight transport sector.
Despite lower oil prices benefitting hauliers “to an extent”, the FTA said most operators are not seeing the 53% fall in bulk prices passed on to them because fuel duty, at 57.95ppl, is negating these savings. It added that because oil is traded in dollars, the weaker pound also dampened the effect.
However, FTA chief executive Theo de Pencier said the drop in oil price was still seeing businesses make substantial savings: “This time last year, fuel represented 37% of the total cost of running a 44-tonne truck, and the annualised cost for fuel for such a vehicle was £52,000. This has now dropped to an average of approximately £43,000, which is a reduction of 18%. In theory, the falling cost of oil is great news for the freight industry, however other costs often cancel those savings out.”
During the meeting, which was also attended by FTA members and fleet directors, the Treasury heard of the need to equalise the cost of fuel distribution in remote areas; the cost of deliveries and freight services in remote areas; and the driver shortage affecting the logistics sector.
“FTA welcomed the opportunity to meet with the chief secretary, Danny Alexander, which was very constructive. As well as discussing fuel prices we also covered a range of other subjects affecting the freight industry, including the impact of the current driver shortage problem,” said de Pencier.
Wincanton revealed last week in its latest trading statement that lower fuel costs were having minimal impact on its results, due to price fluctuations being passed on to the end-customer via its contractual arrangements.
