Road Haulage Faces Tough Year Ahead
(Reported in Coventry Evening Telegraph, December 2005)
A business expert has warned that the haulage industry is facing its toughest ever year in 2006 – and could be a “forgotten victim” of the retail downturn.
The haulage sector has suffered a harsh 2005 with the rise in fuel prices and Tony Mitchell, chief executive of Cranfield Recovery, says the industry could see several victims next year.
“The rise in fuel prices has brought great pressure on the sector and it has been a very hard year,” said Mr Mitchell.
“Fuel represents around 30 per cent of an operator’s costs so it has had a huge impact. Statuary changes in working hours and driver management have added to the problems.
“To top that, the influx of foreign lorries is also having a huge impact. There are 10,000 foreign vehicles working in the UK every day and they are, with the odd exception, exempt from charges and taxes because they bring their fuel with them.
“Hauliers, large and small, play a huge role in the logistics operation of high street stores and I am concerned that the downturn in retail – which is forecast to see several high profile victims once the sales have finished – will be very bad news for haulage industry.”
Dylan Kent, managing director of leading Warwickshire haulage and warehousing firm, Draycote Continentale, said the sector was facing more pressures than before.
“We run 37 vehicles travelling across the UK and Europe and there is no question that it will be a tough year for the industry.
“We pay higher fuel prices than any other European country because of the amount of tax which is levied by the Government and that means when other factors come into play, UK operators are hit more than most.
“We are fortunate because we are in a strong position but we know of others who are not so well placed and 2006 will be especially testing for them.”
“The true cost of the Road Transport Directive, or Working Time Directive as some would know it, has not yet been fully realised, and that will see a greater demand for driving staff, which are already in short supply.
“Foreign competition will not be the only area of pressure on costs. As work becomes more scarce, UK operators themselves will be bidding against each other for work, and that too will see slim margins cut still further, and ultimately, some businesses will close rather than continue to compete for whatever work remains.
“Big organisations will also dictate what they are prepared to spend on transport and use foreign operators rates as a negotiating tool. Look at the supermarket chain Lidl, that contract has gone to a foreign operator rather than a UK based haulier.”
Cranfield Recovery employs 10 people and is based in Warwick. It was founded in 2001 and deals with all aspects of corporate, business and personal financial problems.
Tony Mitchell is a Licensed Insolvency Practitioner, a fellow of the Association of Chartered Certified Accountants and a member of the Midlands’ Regional Committee of the Association of Business Recovery Professionals.
