Brace yourself! CM readers predict fuel hike in Budget
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EXCLUSIVE
• by Dominic Perry
More than two-thirds of haulage firms believe that Chancellor Gordon Brown will force up diesel prices in the next Budget, according to Commercial Motor'send-of-year survey
However, 79% of those surveyed said that they would pass any fuel price rise onto their customers, seeing it as the only way to stay in business.
There was also strong evidence that the driver shortage is beginning to bite, with 85% of operators saying that they are having to lift their pay rates in order to retain their drivers.
John Burgin, of Sheffieldbased Intake Transport, says: You've got to pay decent wages otherwise you end up getting donkeys. You can't trust someone with £80-90,000 worth of truck if they're useless. There's no use having all the flash gear
when you're let down by your driver."
But many found that they had to take cash from their profits to increase the drivers' wages: 'We had to make that concession to them in order to retain the good drivers we have," says Colin Young, director of Cranleigh Fr-eight Services. "If we hadn't then we would have lost out, but it will have to come off our bottom line."
Last week CM spoke to operators across the country running everything from two trucks to larger transport fleets. Most of those questioned had 10 or more trucks, reflecting the fact that firms at the smaller end of the market are becoming increasingly thin on the ground. Our survey found that hauliers are generally optimistic for the future, with almost three-quarters predicting that their businesses would be the same or better off in 2002.
RESULTS
• The government has introduced concessions on VED and tax breaks on 'green' fuel. Has this made any difference to your bottom line?
Yes: 62% No: 38%
• "Rebates on fuel and tax haven't benefited us because of all the extra fuel we are having to burn sitting in traffic jams. Better roads would improve things—we are reaching a point now where three Lane motorways are a positive disadvantage." Graham Eames, Pulleyn Transport.
• More overall confidence in the economy and marketplace would make a difference to us. Customer ordering patterns have changed, and orders are now placed at the last minute." Suttans &Sons.
• "The tax breaks put a bit of money into our pockets earlier this year—but they could still reduce fuel duty a bit more." Eric Short, Eric Short Transport
• Do you expect fuel prices to go up in the next budget?
Yes: 64% No: 36%
• If fuel prices DO go up next year, will you put your rates up accordingly?
Yes: 79% No: 21%
1E3 • 'if customers don't pay reasonable rates, we won't do the job—it's as simple as that." Peter Little, MD, Meeks of Luton.
• "We have a fuel surcharge in place on all our contracts to take this into account" Bryan Shuns, GW Sissans & Sons.
• 'We always do—and to be honest we cannot afford not to. You don't need me to say how thin the margins are, but if fuel goes up then we have to pass that on—otherwise we go out of business. If people don't want to pay that then they are free to go elsewhere." Peter Bennett, Freight Shepherd.
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• "No—the marketplace governs the price that you can charge. Customers wit go elsewhere if you put your prices up. You have to swallow it or they will leave. We are non-competitive because of our legislation, not our efficiency." Jae McNeil, Goldfinch Transport • "We will try to, but until European harmonisation we have to compete with foreign vehicles with ridiculously cheap fuel. It creates a big divide between comparative running costs." George Brown, G&S International.
• There is a general consensus that better rates of pay are needed to attract drivers into the industry. Are you prepared to increase your pay rates to ensure that you get good quality drivers?
Yes: 85% No: 15%
III "A lot of my drMers have been here for 10 years-plus. If you pay peanuts, you get monkeys. "P Hales, Hales Group.
III "They've just had a £20-a-week rise. We try and be as good to them as we can. You have to be able to induce them to work for you somehow." Robert kurter, Baxter International.
• "We have done and will always continue to do so." Matthew Parry, Frsnni Transport • "You have to do that anyway because there's a lack of good drivers in the market, but one of the things it means is that it's a cost against you that you can't pass on." Joe McNeil, Goldfinch Transport
• Overall do you expect your business to be better off in 2002?
Yes: 35% No: 26% The same: 39%