Kent Connection has collapsed into administration after its customers refused to accept a fuel surcharge, and campaign group FairFuelUK warns other hauliers are heading for the same fate.
FairFuelUK, which is petitioning for the government to abandon the planned 1ppl fuel duty increase in April, says it has been contacted by a number of hauliers who say their customers are unwilling to accept a fuel surcharge clause.
Blaydon, Tyne & Wear-based Kent Connection, which has an O-licence for 40 vehicles and 50 trailers, appointed Daryl Warwick of Armstrong Watson as administrator of the business on 21 January.
Warwick tells MT that a large percentage of the haulier's customers were not willing to accept any bill increases and rejected a fuel duty escalator. The company could not afford to soak up any diesel hikes and two of Kent Connection's largest customers also recently reduced their requirements.
Warwick says that an attempt to sell the company as a going concern was made, but proved unsuccessful.
Potential buyers are being deterred from investing in a business where customers are reluctant to accept a fuel duty escalator, MT understands.
A FairFuelUK spokeswoman says: "Those who manage to get fuel duty escalators in their contracts are fearful that their customers won't be able to keep up with payments because of diesel price fluctuations. The government must put a hold on any further rises."
Kate Gibbs, RHA head of communications, agrees. "Hauliers can't afford to absorb diesel rises because they are on such low margins as it is. But we are seeing increasing numbers of transport customers who can't accept a fuel surcharge. Any more fuel duty rises are bad news for the whole distribution chain."
Gateshead-based Lescost Transport, which operates 27 vehicles, says its relationships with customers has been jeopardised following its re-introduction of a fuel surcharge.
FairFuelUK campaign update:
- 28,489 signatures as of 28 January.
- 600 letters sent to MPs highlighting the need for a fair deal on fuel.
