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Crane firms consider fuel surcharge

PLANT - Mobile hirers hit by falling hire rates

MOBILE crane hires may add a fuel surcharge to their invoices due to falling hire rates and rising costs.

The idea was pushed by Colin Wood, chief executive of the Construction Plant Hire Association, at a meeting of the CPA's Crane Interest Group last week.

Crane hirers at the meeting said fuel costs had more than doubled since January. A typical mid-size company that operates 40 cranes has seen its fuel costs rise from £90,000 to £200,000.

If mobile cranes are removed from the Excepted Vehicle List, as the Inland Revenue has threatened, the required switch from discounted red diesel to white diesel will double these costs again, they warned Mr Wood urged crane owners to follow the lead of the airlines and impose fuel surcharges but warned that competition rules dictated that the rate could not be set by the CPA. Each company would have to decide its own rate, as the airlines do.

Several crane owners said it would be difficult to get customers to accept such a surcharge.

Bob Francis, owner of Bob Francis Crane Hire, argued that the more fundamental problem was the currently depressed hire rates He said: 'Big companies should lead, but they're the worst.' Martin Ainscough, chairman of the Crane Interest Group, admitted that his company had lowered its rates.

He said: 'It is always a balance between rates and utilisation and we have had some success in getting rates up. But in the past year we have had to get utilisation up.

'I will not deny that we do some stupid prices. It has been a board decision that we will compete on smaller jobs because we were losing volume.' Dave Turnbull, of Hewden Crane Hire, admitted that his company was facing the same pressures. He said: 'We are trying to get our rate structure up. We have got to, or we will not survive.' Mr Marsh blamed the falling rates on manufacturers who, he said, had encouraged oversupply of cranes.