High fuel prices hit Finnish transport industry - bankruptcies feared

Haulage firms want diesel tax lifted from transport professionals

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Finnish road haulage firms are calling for lifting the diesel tax from professional transport companies. Finnish Transport and Logistics (SKAL), the association that represents the country’s haulage companies, warns that the whole sector faces a cash flow crisis and a wave of bankruptcies, because increasing competition makes it difficult for small companies in the business to pass the rising fuel costs onto the transport fees they charge.
      SKAL calculates that the price of diesel fuel has risen by 30% in the past year. Most Finnish truck drivers are independent entrepreneurs whose contracts do not have clauses that would protect against sharp increases in costs. Finnish trucks consume about 1,200 million litres of diesel fuel a year, which means that a 30% rise in the price of fuel brings EUR 360 million in extra costs.
      Markku Maukonen, head of logistics at SKAL, says that fuel costs comprise 21% of total expenses in the field, and in heavy transport, they account for as much as 35%. He also says that many companies are incurring daily losses.
      Tomi Heino, who owns a waste and sewage haulage company in Helsinki, says that in the current situation there is a great temptation to pay wages under the table without taxation. He says that diesel fuel would be a more appropriate target of tax cuts than alcoholic beverages.
      "Finland is a long country, and rubber tyres are needed to keep it operating. The state does not seem to appreciate the need for services to function as much as it does the all-important traffic in booze", he says.
     
The surge in oil prices is reflected in other businesses as well. For instance, passenger fares on ships sailing between Finland and Estonia have been raised by a few euros to compensate for the rising fuel prices.
      The Finnish airline Finnair raised the prices of its business class tickets by 7-10% earlier this month. However, economy class summer discounts were kept unchanged, and prices for certain domestic connecting flights were actually brought down.


Previously in HS International Edition:
  High-speed catamaran service to Tallinn to pick up later this week (12.4.2005)

Helsingin Sanomat