The decision to abolish an administrative relief from all goods
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into the UK from the Channel Islands has had a profound effect on freight movements, according to an island-based haulier.
Martyn Langlois, general manager at Ferryspeed, which runs 40 vans and lorries in Guernsey and is also based in Jersey and Portsmouth, said all the major firms that were based on the islands, including HMV and 7dayshop, left following an announcement that the Low Value Consignment Relief (LVCR) would no longer apply to goods imported into the UK.
HMRC said LVCR had been used "on an increasingly large scale" to sell low-value goods to customers VAT-free. Its removal in April 2012 was intended to level the playing field between UK firms and those on the islands.
However, it also led to the collapse of Condor Logistics last year (CM 11 October 2012). In a statement, the company said the volume of shipment between the mainland and the Channel Islands declined substantially after the loss of the LVCR and, coupled with the recession, the business was forced to close down in December.
"We are refocusing the business on our core activities operating lifeline ferry and shipping services and these are not affected by this announcement," said Condor group director Ken Soar.
Langlois said Ferryspeed snapped up some of Condor Logistics' business that was worth keeping. "There are small mail order firms still persevering in Guernsey, and they may continue at the current level," he said.
"We looked at our costs, but in the freight industry other companies are probably in a worse position than ourselves. One of them was Condor Logistics. What I would hope we have now is more of a sustainable transport industry, which has settled down to the levels they now are. We react far quicker to customers' requirements and demands and that sets us in good stead."