Fuel prices could lead to UK 3PL migration

The Governments failure to reduce the high cost of fuel in Britain could lead many companies to relocate their major UK-based warehouses and distribution centre hubs to mainland Europe with many hundreds of jobs lost as a result.

That was the message from Derrick Potter, National Chairman of the United Kingdom Warehousing Association (UKWA) in his address to UKWA members at the Associations Annual General Meeting, held recently at the Dorchester Hotel, London.

Derrick Potter said: Fuel represents around 36 per cent of an operators costs and the UK Treasury imposes the highest level of fuel duty throughout whole of Europe around 25 per cent more than any other state. But the logistics industry isnt just about lorries. Modern third party logistics (3PL) contracts comprise a range of services including distribution, storage, packaging etc rolled into one. So, if - as has been demonstrated - a lorry refueled in northern Europe pays over 10,000 a year less than a similar vehicle doing the same mileage that fills up in the UK, it is easy to see why a 3PL might be persuaded to relocate its distribution hubs to mainland Europe.

Potter continued: Furthermore, with margins already tight in the UK 3PL sector, it is becoming increasingly difficult for UK-based operations to compete with their European rivals and I fear more and more blue chip British manufacturers and retailers will choose to outsource their logistics operations to established western European transport firms.

With around 2.3 million people employed in a wide variety of roles within the UK logistics industry, if the Government doesnt do more to bring UK fuel prices closer into line with the rest of Europe, it won t be just the HGV drivers that suffer.

One of the most influential figures in the UK logistics industry, Derrick Potter is founder and executive chairman of The Potter Group, which provides a complete range of logistics services and solutions. He is also a director of the Rail Freight Association, a Chartered Fellow of the Chartered Institute of Logistics and Transport, an Honorary Fellow of the Institute of Transport Administration and a member of the Advisory Forum of the University of Hull Logistics Institute.

Founded in 1944, UKWA has over 600 members providing storage and third party logistics services, and represents the industry to both commerce and government.
www.ukwa.org.uk

 

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