Logistics UK is calling on the government to provide a support package for the sector in a bid to curb rising inflation due to the ongoing conflict in the Middle East.
The chief executive of the lobbying group Ben Fletcher has urged the government to reconsider its plans to increase fuel duty from September and to support the logistics sector with rising electricity costs and decarbonisation by including the sector in the British Industrial Competitiveness Scheme.
“Logistics businesses operate on very narrow margins, but are facing spiralling costs, most notably the price of fuel, with the cost of filling up a large HGV having risen by 30% to nearly £1,000 between February 23 and April 6. Around half of the businesses we’ve surveyed say they are passing on a lot of this cost, meaning higher prices on the shelves, and the other half are unable to, creating severe cash-flow issues.”
“The pressures on our sector are unsustainable, and risk pushing up inflation, weakening growth and creating severe cash-flow issues for those who are responsible for keeping our shops stocked with food, our hospitals with medicines and our homes with access to the goods we rely on every day,” he added.
“What our members need is an urgent package of support from the government to help weather the storm. The policies we have proposed would also support logistics businesses to switch to net zero technologies over time, increasing the UK’s energy independence.”
“The government’s energy support for businesses is focused on manufacturers,” he continued, “but no sector can succeed without the logistics businesses that underpin them, and many parts of our industry, from chilled warehouses to electric HGVs, are facing higher electricity bills due to the conflict.
“Not only are these increasing costs for our members and across the economy, but it is also making it harder to switch to electric vehicles and support the UK’s energy independence. Reducing the duty on liquid low-carbon fuels would also be a welcome step towards decarbonisation and away from dependence on the Gulf.”
Logistics UK’s intervention comes as world commodity markets continue to see-saw with the seemingly ever-changing situation in the Middle East and the Strait of Hormuz.
Crude oil prices have yo-yoed in the last few days, after the seemingly positive news of a ceasefire being agreed between the US and Iran last week was thrown into doubt over the weekend.
Global oil prices skyrocketed again this morning after the announcement by president Donald Trump that the US Navy had intercepted and seized an Iranian ship overnight.
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