GXO survey finds fuel costs spur interest in cleaner fleets

GXO Logistics has found that rising fuel costs are pushing 63% of UK transport and supply chain decision-makers towards alternative-fuel vehicles, although only 38% currently operate them.

The company’s latest Future of Transport survey, reported by Logistics Manager, covered more than 1,000 UK supply chain, transport and logistics decision-makers. It found that 87% regard reducing emissions as a key priority.

What happened

Securing investment depends heavily on the commercial case. More than three-quarters of respondents — 76% — said evidence of cost savings or operational improvements was essential to winning funding for lower-emission transport.

Operators are also looking for efficiencies within their existing fleets. Reducing part-loads was the most common measure identified, at 43%, followed by cutting empty running and exploring fleet sharing, both at 41%. Route optimisation was cited by 39%.

Those measures address vehicle utilisation as well as fuel consumption. Fleet availability carries a separate financial burden: the AA puts the cost of van downtime at £1,172 a day, highlighting another operating expense for businesses managing road transport.

The background

The survey comes amid a sharp increase in diesel prices. Department for Energy Security and Net Zero figures cited for the week beginning 12 October put UK diesel at £2.0004 a litre, compared with £1.4299 a year earlier.

Fuel pressures also extend to smaller commercial vehicles. MoneySuperMarket has put the annual increase in van fuel costs at £671, a separate measure of the pressure on businesses dependent on road travel.

The wider spending picture also reflects higher forecourt costs. Barclays reported a 2% rise in September spending as fuel costs climbed.

What people are saying

GXO identified expensive new vehicles, uncertainty about which fuel technologies will prevail and concerns over infrastructure as obstacles to investment in low-carbon transport. These barriers affect the decision to buy vehicles, rather than simply operators’ willingness to reduce emissions.

Carl Hanson, managing director of transport at GXO UK & Ireland, argued that emissions reductions and commercial results need to be pursued together. His position was that operators require workable improvements to today’s operations while retaining the ability to use different fuels in future.

What happens next

Respondents’ expectations for 2028 span several technologies rather than a single replacement for diesel. Gas-powered fleets using liquefied natural gas or compressed natural gas received the strongest backing, with 70% expecting them to be viable and affordable by then.

Electric heavy goods vehicles followed at 68%, ahead of biofuels at 64% and hydrogen at 62%. These figures measure expectations about future affordability and viability, not commitments to purchase vehicles.

Preparations for the supporting energy systems remain at an earlier stage. Only 25% of businesses have begun planning investment in charging or refuelling infrastructure, while 30% have started procurement planning for their future energy needs.

GXO is taking part in the UK’s Zero Emission HGV and Infrastructure Demonstrator programme, which tests electric heavy goods vehicles and associated charging infrastructure in commercial freight operations.

The programme’s first annual report records more than 2.2 million miles travelled by participating HGVs and over 550,000 tonnes of freight transported, providing operational evidence from vehicles already working on commercial routes.