• A mixed review of the Chancellor of the Exchequer’s Autumn Budget has left a feeling of foundations being set but urgently needing building on.
• The headline statement of a 5 pence fuel duty freeze has allieviated some concerns that the industry would be hit harder, but further support has been called for, as the Chartered Institute of Logistics and Transport has stated that while the budget offers hope, it has fallen short for the industry.
• This will apply to the road feeder network and last mile deliveries, contributing to the wider UK air freight sector, but calls have been made to further support logistics infrastructure and deploy policy that increases the industries resilience and ability to generate for the UK economy.

The Chancellor of the Exchequer’s inaugural Budget has left transport and logistics experts feeling it was a mixed bag, and according to the Chartered Institute of Logistics and Transport (CILT UK), urging the Government to further build on positive steps as it has ultimately fallen short of the hope stakeholders had in store for it.

Whilst the freeze to 5 pence fuel duty has alleviated some fears that operators would be further hit by the globally soaring cost of fuel, the Budget has not tackled reducing electricity costs and increasing transport infrastructure support, which CILT UK hoped would also contribute to accelerating the transition to electrification across the sector.

Logistics UK has welcomed this decision. “The government’s decision to retain the 5p per litre cut in Fuel Duty is a wise decision which will help keep trade moving, support growth across the economy and avoid adding further inflationary pressures. We are delighted that that the Chancellor has listened to Logistics UK’s strong case for maintaining the duty cut at a time of global uncertainty and rising costs for businesses and consumers,” Ben Fletcher, CEO of Logistics UK said.

Fuel costs have risen 23 percent year on year, and research from Lambert Smith Hampton has found typical logistics firms have seen a 44 percent rise in operating costs since the Covid-19 pandemic.

“We need to look beyond immediate cost pressures and ensure businesses have the confidence and practical support to invest in sustainable transport. But high electricity costs and limited grid connections continue to make investment in electric vehicles, charging facilities and electric rail services challenging – and most importantly less appealing. If we want a more resilient and sustainable economy, companies and organisations need to be attracted to cleaner energy with the necessary pull factors. The Government should increase support for the electrification of freight transport, across both road and rail, and address the barriers that make this transition. This also includes supporting short-sea ferries and ensuring ports have the affordable electricity and reliable grid connections needed to provide shore power to vessels at berth,” Daniel Parker-Klein, Director of Policy and Communications at CILT UK said.

The fuel duty freeze will apply to the road feeder network and last mile deliveries, contributing to the wider UK air freight sector. The multimodal network is dependent on these measure. Warehousing similarly finds itself in a similar situation, with the UK Warehousing Association describing it as ‘a bullet dodged.’

“After weeks where it seemed almost inevitable that business rates on large properties like warehouses would go up again at the Budget, today was a bullet dodged for our sector. The UKWA has led the charge to persuade the Government that a rise in property taxes for warehouses would inexorably lead to higher costs for business and consumers, and we are pleased our argument has been heeded. However, it is still the case the 7 in 10 large distribution warehouses are being hit by the high value multiplier for business rates, and our members face high costs across the board, including fuel and employment. By extending the Business Rates Transitional Relief Supplement, the Chancellor is maintaining the pressure on businesses outside favoured sectors like high street shops and pubs. Elsewhere in the Budget, £100 million of investment in local apprenticeship services could help employers, alongside the Government’s broader reforms to vocational education. We welcome the commitment to work with the private sector to build up the UK’s defence-industrial base, and our members stand ready to help. The Budget announcement is one day. Over the coming months the Government must speed up improvements to the electricity grid, allowing warehouses to make upgrades including solar panels and electric vehicle charging, and make sure employment law changes take account of the realities of running a business,” Clare Bottle, CEO of the UK Warehousing Association, said.

There is communality across messaging from industry leaders, whether it was ‘a bullet dodged’ or a mixed bag, the Budget didn’t go far enough, but it did offer relief that further costs and taxation were not inbound.

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