Textile recyclers have seen a significant increase in collections costs due to high fuel prices, with some reporting a rise of between 18% and 30%.
Over recent weeks the price of oil has increased rapidly, pushed up by political tensions in Egypt and Libya. The current price of crude oil is $115 a barrel.
I&G Cohen financial director Phil Geller said: “The high fuel costs affect everybody. It’s a big issue and we’ve seen collection costs go up by 30%. All collections we do, have to be done by road - because we collect from banks and door steps, we can’t use rail, so it has a major impact. Generally, we can’t pass the costs on because we collect in partnership with charities and local authorities.”
Geller explains that I&G Cohen runs its own fleet of vehicles alongside an external haulier fleet so it can achieve the best logistics rate possible by swapping between the two.
JMP Wilcox explained that it uses around 20,000 litres of fuel each week. It has seen a year on year increase of £3,500 per week in fuel costs in 2011.Director Martin Wilcox said: “We try to be as efficient with the fuel as possible by vehicle tracking our trucks and being sensible with our logistics. We also run Smartbanks which use technology to tell us when they are full and so we know exactly when to empty them. But trucks don’t do many miles to the gallon, so it’s expensive whatever you are transporting, whether it’s food or textiles.
“For us the volume of textiles per kilometre travelled is the key measure, as the higher the volume, the better the coverage of kilometres. We don’t pass the cost of fuel on because we need to remain commercially competitive.”
The Government recently announced in the Budget that it would cut fuel duty by 1p per litre and defer the 2011-2012 increase until 1 January 2012 instead of its original scheduled date in April 2011.