Road Haulage - UK - February 2015
"Falling fuel prices in 2014 provided much needed relief for hauliers, whose margins remain thin - if a little healthier than in previous years. Modest economic growth is expected in 2015, but trading conditions will stay highly competitive."
– Ben Harris, Industrial Analyst
This report addresses the following key questions facing road hauliers in the industry:
- What growth strategy is optimal in current market conditions?
- How can hauliers address the shortage of drivers in the industry?
- What is happening to haulage rates and how are they likely to move in 2015?
- What end-use sectors are expected to generate demand in the coming year?
- How has the introduction of the HGV Road User Levy impacted the market?
Falling fuel prices in 2014 provided much needed relief for hauliers, whose margins remain thin - if a little healthier than in previous years. However, the driver shortage that was foreseen a year ago has begun to bite, with rising wages affecting costs. Furthermore, while an improvement in economic conditions has not helped resolve the industry’s difficulties in ensuring prompt payment from customers. Modest economic growth is expected in 2015, but trading conditions will stay highly competitive. By focusing on recruitment, investing in staff retention and improving bid management planning, operators can increase their chances of organic growth in business volume growths.
For the purpose of this report, the following definitions are used.
- Contract distribution, also referred to as logistics, represents the main part of the market. This includes haulage, and often warehousing services, by third party road haulage companies, which can be either contracted by product suppliers or distributors.
- Unlike contract distribution, shared-user distribution involves the provision of facilities to multiple customers rather than dedicated customers. This allows smaller companies access to facilities that may not otherwise be economically viable, while allowing road haulage operators the opportunity to utilise excess capacity, thereby improving productivity.
- Distinction is made between public haulage by a third party and own account where the vehicles are owned by the company whose goods are being transported.
Volumes of goods transported are measured in two ways: goods lifted and goods moved. The goods lifted are measured in the total tonnage of loads carried, while goods moved are quantified in tonne kilometres. This is a measure of freight moved that combines the volume lifted with the distance over which it is hauled. A load of 25 tonnes transported over a distance of 100 kilometres is therefore represented as 2,500 tonne kilometres.
With such a high level of industry fragmentation it is not possible to review all the companies in a report of this type. This report is not a directory of industry participants, and the following provides a synopsis of some of the operators selected as being representative of a cross sample of types of operator rather than necessarily the largest industry participants.
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