Logistics UK partners with Portland to tackle fuel price volatility

Logistics operators continue to face financial challenges since the Middle East conflict began, with analysis from business group Logistics UK showing the price of diesel at the pumps in May was 30% higher than it was in February, while the cost of filling a large HGV rose to around £1,000 a tank.

While prices have since fallen, fuel price volatility remains high according to Logistics UK. To help its members manage the challenges of future price fluctuation, the group is partnering with Portland, a leading fuel hedging and risk management provider to give Logistics UK members access to Portland’s financial fuel hedging expertise to fix the price they pay for fuel. The partnership was launched today (9 July) at Logistics UK’s Finance Forum, held at Hallam Conference Centre in London.

“The Middle East conflict is a stark reminder that it is impossible to predict the future, which makes budgetary planning for logistics businesses particularly challenging,” says Logistics UK Director of Partnerships & Digital Services Jemma James. “The new alliance with Portland will help our members protect their margins, operations and levels of service by fixing the price they pay for fuel.

“During the conflict, the cost of filling an HGV rose to almost £1,000 a tank. Such a sharp increase in the cost base would be difficult for any business to absorb, let alone those that operate on margins in the range of 2%-3%, as many logistics operators do. Disruption to the fuel supply chain is expected to persist even once shipping resumes through the Straits of Hormuz, so fixing fuel prices provides businesses with budgetary certainty that helps shield them from the impact of global fuel price volatility.”

The new Fuel Hedging Service will enable Logistics UK members to secure a guaranteed fixed fuel price, and is designed to provide greater stability and predictability while helping to protect businesses from market fluctuations without requiring a fuel supplier change.

Mike Johnson, Group Marketing Director at Portland, added, “We are delighted to continue our long-standing relationship with Logistics UK and to expand it through this exciting new partnership. The freight and logistics sector continues to face significant challenges caused by fuel price volatility, making effective fuel risk management more important than ever.

“By making our fixed pricing products available to Logistics UK members through the Fuel Hedging Service, we look forward to helping more businesses manage their exposure to fluctuating fuel prices, improve cost and margin certainty, and gain greater confidence when setting budgets.”

For more information on Logistics UK’s Fuel Hedging Service and how it can provide greater price stability and predictability, visit Fuel Hedging Service (https://logistics.org.uk/services/affinity-services/fuel-hedging-service) or contact the Logistics UK team at [email protected]. And for more information on Portland’s fixed price solutions, visit Portland (https://portland-fuel.com).

Logistics UK is one of the UK’s biggest business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, please visit logistics.org.uk

Portland offers a range of risk management and supply chain services to commercial fuel users across a variety of sectors, including transport and logistics, bus and coach and fuel distribution.  Set up in 2009 as a specialist hedging provider, Portland’s range of offerings now includes fuel supply and trading, consultancy, AdBlue and AUS production and supply, and operational services for the transport and agricultural sectors. Headquartered in York, UK, the business also has operations in Germany (Essen) and Canada (Hamilton and Calgary).