Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA), commented: “The plan to build 300,000 net new homes a year on average by the mid-2020s will bring challenges and opportunities to the logistics industry.
“The occupiers of these new homes will have to be fed and clothed and, presumably, will expect their online orders to be delivered within 24 hours, so it is essential that the needs of the freight and logistics industry are included in the new homes plans.
“The Government must factor-in the need for land to be allocated for the construction of logistics hubs to serve these new consumer communities and, to this end, UKWA was pleased to note that Mr Hammond announced several measures that should help speed up the planning process and reduce the practice of ‘land-banking’ which has been a key factor in exacerbating the lack of suitable warehousing property across the UK.
“Through its various advisory boards, UKWA has already been working to bring the lack of available development land and fit-for-purpose warehousing space in all cities to the Government’s attention and has presented evidence that highlights the potential crisis in prospect if this issue is not addressed.
“We look forward to hearing what the Secretary of State for the Department of Communities and Local Government has to say in the coming days and remain ready to work with the government on all proposals that come forward.
“Overall, I think the budget held few surprises for the logistics sector. While UKWA would have preferred the Chancellor to have cut duty on fuel, Mr Hammond’s announcement that the fuel duty rise scheduled for April 2018 is to be cancelled will be warmly welcomed by UKWA members. It will reduce the cost pressures on UK supply chains and, it is hoped, stimulate growth in the economy”
Fuel duty freeze is a missed opportunity, warns FTA
Elsewhere, the Chancellor’s decision to freeze the rate of duty on fuel is welcomed by the logistics sector, which is already battling inflation at a five year high, but a cut would have done far more to boost the economy, said the Freight Transport Association (FTA).
FTA has been campaigning for a three pence cut in fuel duty, to provide a significant and immediate positive impact on the nation’s economy. Christopher Snelling, FTA’s head of national policy, said the freight industry is disappointed by today’s Budget announcement: he believes the Chancellor could have gone far further to assist the sector which supports all other businesses across the UK:
“At a time when British business is under extreme pressure to prove its credentials and reinforce existing trading relationships, Mr Hammond has missed an opportunity to cut these costs, and make the UK a more competitive place to do business.
“Fuel duty increases would have been the wrong tool to use to address air quality. As logistics operators currently have no practical alternative to diesel it would have produced no change in behaviour, just adding cost to those businesses who are facing the burden of the planned Clean Air Zones.”
FTA research shows the price of diesel accounts for nearly a third of the operating costs for an average 44-tonne truck. Just a one-penny increase in the cost of a litre can add £470 a year to the cost of running one of vehicle. Many FTA members run fleets of hundreds or even thousands of vehicles and the resultant cost of a duty rise can have a significant effect on operating margins and future solvency.
Recent data from the Insolvency Service showed that in the three months up to 30 June 2016, 32 UK road freight companies declared insolvency. A year later, the figure had reached 59.
