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Fuel costs must be swallowed by manufacturers - hauliers

By Neil Merrett, 30-May-2008

Related topics: Supply Chain

As truck drivers from around the UK gathered in London to protest against rising fuel prices this week, a leading haulage group claims that food manufacturers, and consumers should bare the brunt of rising costs.

Tuesday's protest, which saw the UK capital's roads choked with trucks in a barrage of horns and discontent, reflects European and worldwide haulier concerns over the continuing rise in fuel prices.

Passing on the cost

A spokesperson for the Road Haulage Association (RHA), which represents road distribution groups across the UK, told FoodProductionDaily.com that any industrial sector reliant on hauliers would have to bare the brunt of costs if the industry was to continue.

"Financially, the industry cannot any longer take the hit," he stated. "Since the beginning of the year, prices have risen 14 per cent, in any sector therefore, prices have to be passed down, there is no other choice."

Food makers' response

While haulage groups appear resigned to accepting spiralling fuel costs as an everyday business concern, the industry itself claims to be looking for additional solutions to ease the financial burden.

Callton Young, director of sustainability and competitiveness for the Food and Drink Federation (FDF), said that the industry has a particular role to play in ensuring sustainable distribution of goods, particularly with third party hauliers.

"As fuel prices increase, they have a disproportionate impact upon the haulage sector upon whom our members depend," he stated. "We have pressed the UK Chancellor to postpone a planned two pence per litre increase in fuel duty planned from October 2008 and to remove the duty differential that exists between the UK and our continental competitors to give UK hauliers a level playing field."

Industry action

Besides mirroring the sentiments of the industry in calling for tax relief from governments for companies specifically reliant on fuel, the FDF is also looking at how it could practically help to reduce fuel use through its members.

Young claimed that as part of the federation's complete overhaul of the environmental impact of food production and transportation, cutting fuel use was a vital area of the scheme.

"As promised in our Five-fold Environmental Ambition launched last October," he stated. "FDF is also exploring with our members how they might achieve 'fewer and friendlier' food transport miles through the widespread adoption of transport best practice, including greater resource use efficiency."

Global concerns

During recent weeks, reports have suggested that hauliers across the bloc from France to Greece have or are planning to stage similar demonstrations requiring government support over fuel taxation, mirroring the sentiments of their British counterparts.

Only last week, Canadian haulage firm Jevic Filed for Chapter 11 Bankruptcy, partly citing fuel costs, as well as an economic downturn, for the decision.