Why British Logistics Companies are Fighting Back
April 1st was a big day for the logistics sector in the UK, and not because it was April Fools.
The first day of this month marked the introduction of the HGV Road User Levy, a measure the industry has been pushing for over the past few years. Under its terms, foreign vehicles weighing more than 12 tonnes will face a time-based charge of up to £1,000 a year or £10 a day for travelling on UK roads.
It brings to an end a historical imbalance, as UK vehicles already face a similar charge to drive in many European countries.
However, under law the scheme cannot discriminate between UK-registered vehicles and those from elsewhere in the EU. This means British firms will also have to pay the charge, but this will be offset by a reduction in the vehicle excise duty.
A step in the right direction
Karen Dee, director of policy at the Freight Transport Association, is glad to see the introduction of the levy, as it will stop European hauliers from paying vehicle tax in their own country and then buying low-taxed diesel before entering the UK, a move that can save them up to £200 in every tank of fuel.
"The levy won't fully redress this imbalance in costs, but it does create a fairer arrangement for UK operators. Road charges and tolls are part and parcel of operating a truck on the continent. It is only right that foreign HGVs using UK roads should do the same," she added.
The measure should level the playing field for firms, as the upturn in fortunes for haulage firms could lead to job openings. For example, companies will be able to offer more competitive tenders as the cost imbalance has been addressed.
A welcome move
The Road Haulage Association (RHA) has also welcomed the move, as it means for the first time ever foreign haulage companies will be contributing to the cost of the upkeep of British roads.
"It ... does what is possible, within EU law, to level the playing field between UK hauliers and those from the continent and Ireland," said RHA director of policy Jack Semple.
He stated it is "business as usual" for British truck operators, while he is delighted the scheme has been brought in 12 months ahead of schedule.
"The Department for Transport and the Treasury have worked to ensure that the scheme keeps the impact on the UK industry to an absolute minimum and have engaged constructively with the RHA in achieving that," Mr Semple remarked.
UK hauliers are looking forward
According to the Federation of Small Businesses (FSB) latest quarterly business index, a net balance of 24 per cent of FSB members think exports are going to rise in the next three months.
Manufacturing (42 per cent) is the sector most likely sector to export, followed by wholesale trade (41 per cent), research and development (36 per cent) and engineering (34 per cent).
"Small businesses will have a major part to play if the Government is to meet its challenging targets for 100,000 new exporters and to double the value of exports by 2020," said John Allan, national chairman of the FSB.
However, he thinks small firms need access to tailored advice to make sure they are successful with their exporting efforts, as every strategy has to focus on matching a company's export potential to the right overseas market.
All of this points to a bright future for the UK logistics sector, as not only is it going to be boosted by the HGV Road User Levy, but it can also benefit from a recovering economy that is being driven by small businesses determined to export.
Because of the positive sentiment in the market at present, recruitment will also receive a boost.