Many UK distribution hubs and warehouse facilities operated by or on behalf of multinationals could be relocated to mainland Europe if the UK government presses on with plans to increase the cost of fuel, according to one industry leader.
Derrick Potter, founder of UK freight operator Potter Group and chairman of the UK Warehouse Association, told UKWA members at its recent AGM that UK fuel duties threatened not only the trucking business, but sectors further up the supply chain.
"Fuel represents around 36% of an operator's costs and the UK Treasury imposes the highest level of fuel duty in Europe - around 25% more than any other state, " said Potter.
"But logistics isn't just about lorries.
Modern third-party logistics contracts comprise a range of services.
"It has been demonstrated that a lorry refuelled 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."
He added: "Furthermore, with margins already tight, it is becoming increasingly difficult for UK-based operators 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 western European transport firms."
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