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Barloworld addresses effect of fuel tax increases on the transport industry

How is the UK’s road freight industry to survive the latest round of fuel tax increases? In his inevitably heavily criticised 2009 budget, Chancellor Alistair Darling introduced the 2p per litre fuel duty that had been widely expected. It will be introduced in September, followed by additional annual hikes thereafter.

The Road Haulage Association and the Freight Transport Association, who together represent the bulk of the UK’s heavy freight road hauliers, had already sounded ominous warnings on such increases before the budget was announced, saying the increases could ‘push the logistics sector to the brink’, by placing an additional £810m burden on logistics businesses, which are already trying to deal with the steep fall-off in volumes of trade and goods resulting from the economic crisis. Latest figures show that the number of Heavy Goods Vehicle drivers seeking unemployment benefits increased by 365% in the year to March 2009.

It is clear that freight owners will need to devise urgent measures to address rising costs and falling volumes if they are to survive the crisis. A cost-effective and long-term solution is a careful analysis of how distribution networks serviced by heavy haulage trucks are planned and implemented. Logistics and supply chain service providers who specialise in distribution network optimisation, such as Barloworld Logistics, can reduce costs hugely by planning and implementing a more efficient and effective distribution network for their clients.

John van Wyk, CEO Barloworld Logistics Europe says "In the current climate, with fuel costs set to escalate steadily over the next few years, it’s imperative for cargo owners to minimise their costs and maximise the effectiveness of their current fleets. By planning distribution routes and centres more optimally, miles on the road can be slashed, trucks can be moving more full loads, and capital investment in distribution centres, warehouses and trucks themselves can be reduced. There is no longer a choice in the current climate – companies will have to be smarter if they are to survive. Distribution network planning and optimisation is just such a smart move – that will also have longer-term competitive benefits."

Log onto www.barloworld-logistics.com for more information

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