Hauliers face near 20% cost increases as business failures soar

Hauliers and coach operators have borne the brunt of huge cost increases for the second year in a row. The cost of fuel, vehicles, labour and fuel additive have skyrocketed well above inflation, in part due to the impact of the war in Ukraine.

The RHA’s annual Haulage Cost Movement report shows that the costs of operating a lorry at 44-tonnes has increased by 19%.

“This directly impacts the cost of living and the prices on our shelves. 89% of all goods transported by land in the UK are moved directly by road, including 98% of food, agricultural and consumer products – road haulage is essential to keep the UK economy moving,” says RHA.

The cost of food has increased sharply. Food inflation is at near-record levels at 14.7% in part due to the significant increases in diesel costs up by 39.2% and the major increases in the fuel additive, Adblue by 86%.

“While fuel duty was cut by 5p in March 2022 it was a one year deal so is expected, but not wanted, back in 2023 and the removal of the entitlement to use red diesel from April 2022 came at the worst possible time for operators such as those operating refrigerated transport and waste management operations. We will continue pressing the Chancellor to reduce the tax burden on fuel by introducing an essential user rebate of 15ppl.”

Vehicle costs have also increased beyond inflation, with product delays and long waiting lists. Increases in energy have put significant pressure on operators, as the UK Government Energy Bill Relief Scheme only runs until the end of March 2023. A review is underway to determine which sectors are eligible for support after the initial scheme finishes and RHA is urging the Government to extend support for road transport businesses to ease the pressure on supply chains.

“We are now faced with challenging, recessional times with reduced demand, and we continue to support and advise members on how to control their costs.”