Grangemouth Refinery Strike Sparks Fuel Panic in Scotland
Quietly raging away in Scotland for the past few weeks has been a standoff between workers and INEOS, and the impact of this dispute is likely to be felt across the whole of Scotland, and Northern England for several weeks.
Employees at Grangemouth have voted for Strike action, and the 2 day stoppage is due to start next Sunday. For Health & Safety reasons this will result in a complete shut down of the Grangemouth refinery. The shut down started today, and after the stoppage it is anticipated that it could take up to a month to re-start operations. Potentially leaving Scotland and Northern England without fuel for up to a month.
INEOS operates the Grangemouth Fuel Refinery, which is only Crude Oil refinery plant in Scotland. Employees voted for strike action when pension dispute escalated. INEOS took over Grangemouth from BP in 2005, and secured a £40m pension pot as part of these arrangements. Unions are claiming that the pension pot has been stripped,and that INEOS is planning to close the final salary pension scheme to new entrants and reducing provision for existing members. INEOS says that the new scheme is still very generous, but that along with most other UK workers, employees will now have to make their own contributions to the scheme.
The impact of this strike could be felt for weeks. Panic buying of fuel started today as these stories hit the headlines, despite urges from Fuel Retailers, and reassurances from Scots and UK Governments about contingency measures which have already been initiated.
This is another worry for the Courier and Haulage industry of the UK. There are many couriers and haulage companies that do not have either the facilities or finances to buy in bulk tanks of fuel which would be necessary to keep them going through the stoppage, and the subsequent re-start period necessary to get fuel supplies back to normal.
There are guidelines to ensure that fuel purchases get prioritised to emergency services and utility companies, but this gives little comfort the Scottish Courier and Haulage companies. Stuart McKinnon of the FSB in Scotland said; "It's dreadful news for Scotland, which depends on fuel. We would urge all parties concerned to resolve this matter for the good of Scotland!
(Article posted 20th April 2008)
Rising Fuel Costs Contribute to UK Haulier's demise
Ramage Distribution is one of the larger UK hauliers, employing over 390 people and turning over last year £30m. Operating on a much larger scale than most of the UK Courier companies, but within the same marketplace, and facing the same challenges as couriers.
This week saw Ramage Distribution enter receivership, with trading factors, and notably the rising cost of fuel, being listed as primary factors in the downfall of the business.
Almost everything that everyone in the UK buys, wears or eats has been delivered. The costs of delivery and haulage impact on every single person's lives, but it is an issue that the average man in the street doesn't perceive as having a direct impact on them. When the price of fuel goes up people tend to think about the price of a tank of petrol, not that that's going to increase the price of a loaf of bread, a bag of potatoes, or even the price of a plant from a garden centre.
UK Couriers & hauliers are operating in one of the most challenging market places. Their customers are either the large businesses who are able to impose their delivery prices on the couriers, or smaller businesses fighting to keep their delivery costs as low as possible to compete with the big boys. The large haulage businesses, supplying the largest retailers in the UK frequently are unable to pass on the rising fuel prices, and end up with their profit margins getting squeezed more on every fuel price increase.
And the costs of operating a courier business in the UK just keep on increasing too. With tolls, expanding congestion charging zones, increasing insurance costs, and of course, fuel. Couriers face price conscious customers, who look to shave every pound possible off their rates, but couriers also have to take into consideration the cost of running a half empty van, And this results in a trade off, the loss of which is usually the profit margin.
Couriers give their customers contract rates, so that the customer knows where they stand, and can make informed decisions about the pricing and sales strategy of their goods. But with the fuel price increasing on almost a weekly basis, this leaves the courier absorbing the loss.
And a few pennies on the price of a litre, or a couple of pounds on the price of a tank, can equate to over a hundred pounds a day for a firm of couriers running 40 vehicles. They can't go back to the customer and ask for a top up, you can't renegotiate prices every week.
So who is it that takes the hit of these fuel price increases?
We know. And the industry will not be able to continue to do so for much longer, and Ramage is a warning light.
(Article posted Wednesday 16th April)
We will shortly be running topical debates here on boxby where you can have your say on the factors influencing the UK courier and delivery industry.
