Truck operators like Point 2 Point that service the construction trade are now bracing themselves for the effects on clients of new legislation banning the use of rebated diesel in building equipment.
At the time of writing, the price of oil had just hit a near 10-year high, but long before the dramatic surge in prices Point 2 Point was thinking about the spiralling cost of fuel and how this affects its business.
As for most hauliers, rising diesel prices are a huge worry for Point 2 Point, but it isn’t just thinking about the pump prices because this Redditch-based firm is essentially an own-account operator for West Point Construction, a large building contractor involved in residential homes, retirement living and commercial premises. It’s not simply the price of diesel for its eight-strong truck fleet though, as Michael Monaghan, Point 2 Point asset and service manager, explains: “The biggest concern in construction right now is the end of red diesel. That’s a big disadvantage for West Point. We’re buying 50,000 litres a week. If you look at the cost of running a bulldozer, it’s a lot because they can burn through 2,000 litres a week.”
Announced in the 2020 Budget, tax-rebated red diesel will no longer be allowed in construction equipment from 1 April, a move that is set to cost the sector millions and which has got Monaghan and transport manager Dan Moorman thinking about how they, as the transport side of the business, might play a part in helping to offset this cost. “The new house-buyer is going to pay for this, [increased cost] and it’s going to have a huge knock-on,” Monaghan says. “The next step we might be looking at is a fleet of tankers. They’d be just going around topping up the construction sites. There’s a huge risk with this change; not only will it increase costs, but also the potential for theft. If thieves know there are thousands of pounds sitting in tanks on a building site, they’re going to be all over them. Just looking at the cost of the fuel there’s a lot to lose, and that’s before the damage caused by the theft. So, if we [the industry] go white, we’d maybe be looking at two or three tankers to support the construction company.”
That’s quite an undertaking, but at the time of our interview with Point 2 Point some months before the April Fools’ Day, Monaghan was seriously considering the investment which would allow the company to save a small amount by bulk buying fuel without the added complication of bunkering. Point 2 Point, however, isn’t shy of investing in equipment and last year upgraded most of its fleet replacing 17-plate Scania P-series with a new batch of new generation models in XT trim.
Click here to read the full article in PDF format.