UK haulage: trouble on the highways
New figures show that UK international hauliers had a terrible 2001.
Figures released this week show that the UK international road haulage industry is in crisis. It is unable to cope with competition from low cost foreign haulers. With an increase in fuel tax expected in the annual Budget, this imbalance is likely to widen, leading to a swathe of job losses and company failures.
Figures released this week by the Freight Transport Association (FTA) show that the UK international haulage industry suffered its worst year since 1995, even though the market actually grew significantly by 6%. Whereas cross channel trips by UK haulers fell 7% in 2001, volumes by foreign haulers increased on the same routes by 13%. In Q4 2001, non-UK companies accounted for 72% of journeys – the lowest level ever.
There are many reasons for this deterioration of the industry (only five years ago, UK companies commanded over 50% of the market). The strength of sterling and the imbalance of trade flows are undoubtedly two of the main causal factors. However, fundamentally the problems stem from the high cost base of the industry, brought about by high fuel and employee costs. These mean that UK haulers are unable to compete effectively with foreign-based companies offering cheap reloads.
Although there is little that the UK government can do directly about the balance of trade deficit or the strength of the currency, plainly it is in a position to affect the weight of the tax and social legislation that is destroying a once vibrant industry. With tax on fuel likely to be increased in the Budget, the perilous financial state of the industry will tip many more hauliers into bankruptcy as the difference in costs widen.
Datamonitor
