Fuel surcharges and open book contracts highlighted as particular obstacles
NEWS RELEASE Stockholm, 27 November 2012: Greater Than welcomes the new study commissioned by the International Council on Clean Transportation (ICCT) on the market barriers to increased efficiency in the European road freight sector, which concludes that the main hurdles impeding the adoption of fuel-saving technologies are technical and financial factors. The research singles out fuel surcharges, ownership patterns and open book contracts as particular obstacles in the adoption of cost-effective fuel-saving technologies. The report also shows that there is a lack of information on the precise benefits of fuel saving technologies as well as a lack of demand for retrofit fuel saving technologies.
Regarding ownership patterns of freight vehicles, the study highlights the situation of third party logistics providers (3PLs) who do not own the vehicles themselves and so are neither inclined nor incentivised to invest in fuel-saving technologies. This also applies to some transport companies who lease trucks rather than purchase them. As 3PLs shape market trends and standards, this suggests to other industry players that fuel efficiency is not important.
The study also shows that many logistics service providers use fuel surcharges to pass on fuel cost increases to buyers, which eliminates the incentives to utilise fuel-saving technologies, as companies which are shielded from fuel price fluctuations tend to neglect fuel efficiency improvements.
Sten Forseke, CEO of Greater Than, commented “We welcome this long-awaited study. There was a real need for an analysis on the limited adoption of cost-effective fuel-saving technologies in the EU. We have been aware of the impediments and market distortion of fuel surcharges and open book contracts for a while. We now urge the European Commission to take this evidence into consideration as it drafts its communication on the EU’s Heavy Duty Vehicles Strategy.”