Industry Analysis
Road Haulage

It�s getting tougher to keep on trucking

Professional advisers with clients in the road haulage or associated sectors need to recognise more than ever before the challenges facing their clients as a result of the pressures created by the recent significant fuel price rises. According to John Hancox, chairman of the Road Haulage Association�s Business Information Panel, "Fuel now represents, on average, 30% of an operator�s costs. All areas of an operator's costs have risen but fuel still remains the key issue.�

As if this weren�t enough, the sector is also challenged by the biggest changes in driver management in the last 40 years with changes affecting how drivers are rostered and how working hours are recorded. Add to this the potential EU changes to drivers� hours which could affect a driver�s ability to work six day weeks and you start to realise how bleak the picture is for the sector.

But this isn�t the only threat that clients face from Europe. A recent report commissioned by the Road Haulage Association and the Freight Transport Association (FTA) says that over the next 14 years foreign trucks will cost the UK haulage industry around �3 billion in lost revenue and the UK government �2.73 billion in worn out roads.

There are up to 10,000 foreign vehicles working in the UK every day. Unlike UK vehicles travelling to mainland Europe, foreign vehicles in the UK are not subject to any road tolls or other charges (with very few exceptions), and because they bring all of their diesel with them, often in 1500 litre tanks, they enjoy a free ride in the UK for up to a week at a time.

FTA Chief Executive Richard Turner says, �Lorries more than pay for the road wear they cause via UK fuel and vehicle duties - in 2005 they will collectively pay over �4 billion. For the largest lorry, typical of those foreign lorries coming to the UK, a UK operator pays �25,000 a year to the Treasury. Foreign vehicles make zero contribution.�

On the home front, the news is not much better. The down turn in the retail sector is having a dramatic negative affect on the logistic sector and it is doubtful whether the seasonal Christmas uplift will be sufficient to see many businesses through after the New Year.

All in all, the sector is on a knife�s edge. If you are advising clients in the road haulage or associated sectors do watch out for the warning signs of insolvency and contact Cranfield Recovery if any of your clients need the support of professional insolvency practitioners.

Call Cranfield Recovery on 01926 450414.

A local garden centre business, despite the best efforts of the two partners and a substantial investment, found it very difficult to compete with the large multi-national operations and ceased to trade in January 2005.

The two partners concerned were referred to Cranfield Recovery as not only had the garden centre ceased to trade but because they were a partnership, the outstanding liabilities were the personal responsibility of the individual partners.

Cranfield Recovery formulated a strategy which involved firstly the advertising and promotion of a special offer weekend at the centre to the general public to sell the stock. So successful was the weekend that on occasion the doors had to be closed because of the customer numbers. Following the sale we found new tenants to take over the prime frontage leasehold premises thereby minimising the liability of the landlord.

The next step was to work with the two partners to prepare proposals to be put to the creditors using interlocking Individual Voluntary Arrangements. The approval of the combined Voluntary Arrangements enabled creditors to receive a significantly better dividend than they would have received had the partnership been wound up and the individual partners made bankrupt.

According to one of the partners, �We were faced with a very difficult decision to stop trading and close the Garden Centre we were running. With the help of the advice given to us by Cranfield Recovery and the strategy they implemented, they handled the orderly winding down of the Centre on our behalf and minimised the stress of the whole situation. We didn�t think there was any possibility of being able to have a fresh start to build a future but the help given by Cranfield Recovery has given us that opportunity.�

Meet the Cranfield Team
Brett Barton

The Cranfield Recovery team includes professionals operating across the corporate, business and personal insolvency markets. Amongst the business team is Brett Barton. Brett began his insolvency career in March 1995 working for a small firm on the South coast specialising in personal insolvency and liquidations. Keen to expand his knowledge, he relocated to Birmingham in November 1998 to work for a top ten national practice. During his time in Birmingham, Brett gained experience in all aspects of insolvency, dealing with many large administrations in sectors such as the automotive, engineering, clothing and agricultural industries.

Brett joined Cranfield Recovery Limited in October 2004 to manage the insolvency team and help develop the business. Brett has ten years experience advising directors on their responsibilities and giving best advice if their companies are facing financial problems. Feel free to telephone Brett with any issues you have involving your clients.

Business in the Dark According to a recent PwC survey only 12% of UK business is of aware of the Enterprise Act. With its focus on assisting ailing businesses to survive, rather than forcing asset sales, you would have thought this was something the business world would take more note of.

Warwickshire Early Bird Golf Society The golf society is taking a rest over the winter but will be back for the first session on 16th March 2006. For more details visit our website.