The UK economy has continued to make uncertain progress since we last addressed rates 12 months ago. GDP grew in the 1st quarter of 2024 by 0.6% after 3 prior quarters of nil or negative growth. Interest rates remain high at 5.25% and investment remains uncertain.
Fortunately, inflation has fallen – it declined from a peak of 11.1% in October 2022 to 2% in May 2024 and is forecast to remain low and relatively stable in the mid-term. The pressure on input costs remains, however, with high borrowing rates and wage inflation continuing ahead of prices – and we have seen transport business failures continue throughout the latter half of 2023 and the first half of 2024.
To give some balance we also see many Palletforce members growing and reporting stronger financial results and predicting a better outlook for 2025.
We said a year ago that we would look to avoid any in-year increases where at all possible, so that members did not need to re-address customer rates, that was achieved. Now we need to look forward to 2025.
Given the positive signs of recovery, seen in our own member pallet volumes, we are reminded of the need to strike a balance between staying competitive for inputting customers and to also make some small adjustments where necessary for specific postcodes to assist delivery. Therefore, we are implementing this change that gives every delivering member a deserved and necessary increase, allowing the opportunity to pass manageable rate increases on to customers.
From 30th September 2024 UK postcode IDTs will increase overall by 2.9%. This includes a very small number of necessary individual band and postcode changes. The impact will vary by your own requesting profile. Details of those changes are now available in the Member area of our website.
Mainland Europe IDTs will rise by an average of 2.5% with no change to customs clearance charges. A completely new IDT for Republic of Ireland in line with the relaunch of our Irish service is also available in the member’s area of our website.
Additionally, we have taken the decision to increase the Saturday surcharge to £50 per consignment, all other surcharges remain unchanged.
Central Charges
Like members, Palletforce is also impacted by cost increases, and we also need to ensure that we continue to invest in our people, to recruit and retain the best, particularly our FLT drivers, so we will also be making necessary changes to central charges. We will continue to work alongside our members to ensure we remain the best service provider in the pallet sector.
From 30th September 2024 the base network hub fee will increase to £7.37, and the network IT fee will increase by £0.01 to £0.22 per pallet input and delivered.
The market remains uncertain notwithstanding the potential of a change in government and policy. In our sector in particular we continue to see business failures and associated bad debts. Palletforce will continue to ensure we have measures in place to protect the interests of our membership through these difficult periods.
As with recent annual announcements, we will review the IDT and central fees again in March 2025, and respond accordingly should the economic situation dictate.
Regards, David
David Breeze
Network Development Director
