3PL migration warning
1 min read
The Government's failure to reduce the high cost of fuel in Britain could lead many companies to relocate their major UK-based warehouses and distribution centre hubs to mainland Europe with many hundreds of jobs lost as a result.
That was the message from Derrick Potter (pictured), National Chairman of the United Kingdom Warehousing Association (UKWA) in his address to UKWA members at the Association's Annual General Meeting in London.
Derrick Potter said: "Fuel represents around 36 per cent of an operator's costs and the UK Treasury imposes the highest level of fuel duty throughout whole of Europe – around 25 per cent more than any other state.
"But the logistics industry isn't just about lorries. Modern third party logistics (3PL) contracts comprise a range of services – including distribution, storage, packaging etc –rolled into one. So, if – as has been demonstrated – a lorry refueled 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.
"Furthermore, with margins already tight in the UK 3PL sector, it is becoming increasingly difficult for UK-based operations 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 established western European transport firms."
"With around 2.3 million people employed in a wide variety of roles within the UK logistics industry, if the Government doesn't do more to bring UK fuel prices closer into line with the rest of Europe, it won' t be just the HGV drivers that suffer."
