Fuel Blamed For European Truck Failures

A recent report by ICC Credit in the United Kingdom indicated bankruptcies and liquidations among motor carriers in the UK rose substantially in 2005 and are on track for another difficult year. Motor carrier bankruptcies now account for 2% of the total UK bankruptcies and liquidations, according to Matthew Debbage, head of product and marketing for ICC Credit. The ICC report cited comments by the Road Haulage Association that the rising price of fuel is one of the key factors in the rise of business failures among carriers.

ICC Credit reported that 807 motor carriers had filed for administration or liquidation in 2005, up from 744 the prior year. The number of companies filing in 2006 had already reached 346 in the first quarter.

The motor carrier association pointed out that while each one-pence ($0.07) rise in fuel translates to approximately 50 pence ($0.94) of additional cost on a tank of fuel for the average motorist, that same increase costs the motor carrier about $18.86 on a tank of fuel or $980.72 per year on each vehicle. Fuel is approximately 30% of motor carriers’ operating costs, the association continued.

John Manners-Bell, chief analyst for Transport Intelligence, called fuel costs the “final straw” for many companies. He said The Netherlands government had also released data showing a record number of bankruptcies in the transport sector. The number of companies that failed in 2005 rose 25%, according to the Dutch figures. Over 80% of the bankruptcies in The Netherlands involved companies employing 20 or fewer people.

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