Road hauliers could face tough consequences due to fall in pound value
The Freight Transport Association has warned that road hauliers will need to commit to tougher financial reserves in order to operate legally in the UK due to the drop in value of the pound
For standard operator licence holders, there are financial standing requirements in place, stated in Euros by European law. These are reassessed each year on October 1 in accordance to the current exchange rate and then come into force on new year’s day.
Financial standing does not have to be paid, but instead is an indication that a company has reserves readily available if needed.
The FTA expects that the requirements will rise from £6,650 to £7,800 for the first vehicle, and from £3,700 to £4,300 for each vehicle after that.
Last year these figures actually dropped from £7,000 to £6,650 for the first and from £3,900 to £3,700 for each subsequent vehicle
A head of member advice at the FTA, Es Shepherd said “The potential hike may create difficulties for hauliers as they now need to demonstrate to the traffic commissioners – the industry regulator, that they have over 15% greater reserves available.
“The financial standing requirements exist to demonstrate to the Traffic Commissioner that a commercial vehicle operation is solvent, and ostensibly to show that they don’t need to start cutting corners in vehicle maintenance and safety in order to save costs.”
The financial standing rates for restricted operators do not usually changes year-to-year and are currently £3,100 for the first vehicle and £1,700 for each vehicle after that.
Shepherd added: “The increase would come as a sudden shock to operators who will need to demonstrate these extra reserves by the New Year.
“While ‘cash at the bank’ is the most straightforward way of demonstrating compliance, other methods permitted by the Traffic Commissioners include joint and several guarantees, overdraft facilities, credit facilities and invoice finance agreements.”