Transport and logistics experts are urging the Chancellor to use the Autumn Budget to accelerate investment in cleaner transport, making electricity more affordable and accessible for businesses investing in electrification and sustainable transport solutions, while maintaining existing support to help operators manage rising fuel costs.
Ahead of the Autumn Budget on 28 October, The Chartered Institute of Logistics and Transport (CILT (UK)) warns that rising fuel and electricity costs are putting pressure on transport operators, logistics businesses and supply chains. The Institute is calling for measures to control costs, keep goods moving and support investment in sustainable transport, helping the sector transition to cleaner and more resilient operations.
Fuel remains a major cost for road freight, logistics and delivery companies. Rising prices are already putting pressure on the sector, with the potential to push up costs for consumers and have a wider knock-on effect on the economy. Maintaining the existing 5p-per-litre fuel duty cut remains an important consideration while oil prices are high, as any reduction in this support could add to the financial pressures operators are already facing. However, alongside managing these immediate challenges, the Government must focus on creating the conditions for businesses to invest in cleaner alternatives.
Daniel Parker-Klein, Director of Policy and Communications at CILT (UK), said: “Fuel costs are not just a concern for motorists. They directly affect the cost of keeping supply chains and public transport moving. The sector is already feeling the strain of rising costs, and maintaining the existing 5p fuel duty cut is an important consideration while world oil prices remain high. But we also need to look beyond immediate cost pressures and ensure businesses have the confidence and practical support to invest in cleaner transport.”
High electricity costs and limited grid connections make investment in electric vehicles, charging facilities and electric rail services more challenging. Some electrified rail routes also lack sufficient power to operate all the services that could potentially use them, meaning freight trains must continue to rely on diesel.
He added: “The Government should increase support for the electrification of freight transport, across both road and rail, and address the barriers that make the transition more difficult. This includes supporting short-sea ferries and ensuring ports have the affordable electricity and reliable grid connections needed to provide shore power to vessels at berth. The Autumn Budget is an opportunity to provide practical support for cleaner transport while recognising the essential role logistics play in the UK economy.
“European countries are already using lower electricity taxes to encourage the uptake of electric transport. The UK should learn from these approaches to make plugging in more attractive and support the shift towards cleaner transport across road, rail and maritime sectors. Businesses need the right conditions to invest, including affordable electricity, reliable grid connections and infrastructure that supports the transition.”
Ports and short-sea ferry services offer clear examples of where targeted investment could make a difference. Making electricity more affordable for vessels at berth would encourage ships and ferries to use shore power rather than run onboard engines, provided the necessary grid connections are available. Investment in port electricity infrastructure and improved grid access would help enable this transition, supporting cleaner port operations and reducing emissions from maritime activity.
CILT (UK) also believes the Budget should support essential road infrastructure alongside rail. Reliable road connections remain vital to supply chains, and reported cancellations of major schemes, such as the A127 Corridor for Growth scheme in Essex, raises concerns about the infrastructure needed to support economic growth.
The Institute is calling on the Chancellor to:
Make electricity more affordable by reviewing taxes and levies affecting businesses using or investing in electric commercial vehicles, rail equipment and maritime electrification, helping make cleaner transport a more viable investment.
Improve access to the electricity grid to expand vehicle charging infrastructure, strengthen power supplies to the rail network and provide shore power for ships and short-sea ferries.
Accelerate investment in cleaner transport by supporting the electrification of road and rail freight, alongside short-sea ferry services and shore power infrastructure at ports and removing practical barriers that prevent businesses from adopting lower-emission alternatives.
Invest in key rail freight routes — particularly connections between container ports, quarries, distribution centres, manufacturing sites and areas earmarked for development. This would help move goods and construction materials more efficiently.
Back rail freight growth targets with funding and practical measures, including the Government's stated ambitions for 40% growth by 2040 and 75% by 2050.
Maintain the existing 5p-per-litre fuel duty cut in the short term while world oil prices remain high, recognising that transport-dependent businesses are already under pressure from rising fuel costs and that removing this support could intensify those pressures.
The Institute is urging the Government to link Budget decisions to its wider priorities, including housebuilding, trade, infrastructure development and rail freight growth. These ambitions require realistic policies, investment and funding, alongside a clear commitment to making cleaner transport solutions more accessible and affordable.
CILT (UK) recognises that fuel duty and electricity taxation must be considered alongside wider financial and environmental goals. However, the transport sector needs a balanced approach that addresses immediate affordability pressures while encouraging investment in electrification, sustainable fuels and other lower-emission solutions. The priority should be to create the conditions for businesses to make the transition to cleaner transport without undermining the resilience of the supply chains on which the UK economy depends.
Daniel concluded: “We urge the Chancellor to recognise the essential role logistics play in the UK economy when making decisions in the Autumn Budget. The sector needs support to manage the cost pressures it faces today, but we must also look ahead. Making electricity more affordable, improving grid access and investing in the infrastructure needed for cleaner transport will help businesses make the transition to more sustainable operations. The Government must ensure that businesses have the confidence and practical support to invest in cleaner options for the future.”
Other concerns to consider in the Budget:
Air Passenger Duty (APD)
APD could be raised as an additional Budget concern. It is scheduled to increase by 3.2% in April 2027, so the Institute will monitor whether the Chancellor proposes further increases or changes to its structure. APD raises approximately £4.6 billion annually, and its impact on air travel costs will need further consideration.