Brexit Brings Warning For Hauliers From FTA Over Fall In Value Of Pound

The FTA has told road hauliers that they will have to demonstrate “greater financial reserves” in order to operate legally in the UK.

According to an article published in Commercial Fleet, financial standing requirements - for standard operator licence holders, are stated in European law in Euros, and are reassessed every year according to the exchange rate on the first working day of October, but come into force on January 1.

It is said that the FTA anticipates that the sums will change from £6,650 to around £7,800 for the first vehicle, and from £3,700 to around £4,300 for each subsequent vehicle.

Ed Shepherd, head of member advice at the FTA, told the publication: “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 news brings the need for fresh attention on areas that hauliers are able to cut costs whilst being able to maintain the level of safety needed to meet regulatory requirements.

Shepherd went on to say: “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.”

Thankfully, there are ways that fleet managers can decrease fuel expenditure, insurance costs and vehicle wear and tear. 

Of course, there is no quick fix, but with the adoption, implementation and utilisation of a fleet tracking system, managers can still save.

The more information you can get on daily operations you can - if acted upon correctly - make your fleet more efficient.

Our fleet expert goes into more detail in the video below: