A near doubling of freight firms filing for insolvency in the second quarter of this year has prompted the FTA to call on chancellor Philip Hammond to cut fuel duty in this week’s Budget to prevent further freight company failures.
Figures from the government’s Insolvency Service reveal that the number of freight and removal firms filing for insolvency between April and July was up 78% compared to the same period last year, reaching its highest level in five years.
The figures show that whilst 41 UK road freight companies declared insolvency in the second quarter of 2016, a year on that figure was 73.
FTA said the sharp increase illustrates the impact of rising fuel prices on the sector and called a cut in fuel duty of at least 3ppl of diesel to be announced in the Budget.
Christopher Snelling, FTA national policy head, said the insolvency rises “raise a warning flag”, revealing a “dramatic turnabout “ in the freight industry’s fortunes.
Warning against any rise in fuel duty, Snelling added: ““For larger fleets, their scale means even small rises can add thousands of pounds to the balance sheet.
"Smaller companies are often running on very low profit margins, so any increase in the cost of fuel can push them perilously close to being unprofitable,” he said.
The RHA mirrored FTA’s call for a 3ppl cut in fuel duty this week and also called on the chancellor to provide help to tackle the HGV driver shortage; to ensure smooth border and customs checks for hauliers; and the maintenance of the Le Touquet Agreement, post-Brexit.
Meanwhile more than 30,000 supporters of the campaign group FairFuelUK (FFUK) emailed the chancellor this week calling for no hike in fuel duty.
The email, orchestrated by FFUK, called on the chancellor to not bow to pressure from environmentalists by raising fuel duty in what is describes as a “Green Labelled Budget”.
It warned against any increase on fuel duty, or any taxes aimed at diesel, adding: “If you do increase taxes on drivers, it will be hard to forgive you, your government and your party."
