This article appeared in the Yorkshire Post on Thursday, 14 June, 2007

Hauliers facing an uphill struggle

Jeremy Oliver Director

The region’s haulage industry is facing a double attack in the battle for profitability, says a new survey.

The combination of red tape and stiff competition from European businesses is threatening to send Yorkshire and the Humber’s haulage industry into decline, new research has claimed.

According to the survey of 60 regional logistics and distribution companies, many hauliers are fearful about their futures. Respondents cited the burden of government legislation, high fuel tax and ever increasing competition from European businesses as the main reasons for their pessimism.

The research commissioned by Yorkshire accountants Garbutt & Elliott looked at various aspects of the current state of the logistics and distribution industry and its future prospects.

Jeremy Oliver, a director of Garbutt & Elliott, said: “It is not surprising that the region’s logistics businesses are suffering pressure from European competition.

“It is estimated that foreign lorries constitute one in seven of the heaviest vehicles on our roads and back in 2005 the Burns report highlighted the fact that the costs for a UK operator of running a 44-tonne artic were 22% higher than for Czech operators, 31% higher than for Polish operators and 37% higher than for Hungarian operators.

Nothing suggests that the situation has improved since the Burns report was issued.”

Respondents said a proportion of the competitive advantage afforded to European businesses was unfair, with the major bugbear being in relation to the differing levels of duty paid on fuel across the European Union. Almost a third (30%) of the small and medium operators surveyed said their main goal for the future was to keep trading and there was a strong sentiment that the best opportunities for the future lay in diversification or development of a niche or specialist offering within the market.

Mr Oliver said: “Rising interest rates, lack of investment in the road infrastructure, and the Working Time Directive restricting drivers’ hours are also increasing the strain on the region’s hauliers and the UK sector as a whole.”

He said the introduction of congestion charging in other UK cities in addition to London, digital tachographs were also likely to have an impact on the sector”.

However Mr Oliver added: “ Although the survey paints a picture of a sector unhappy with its current position and pessimistic for the future, with over half of the respondents believing that the sector is facing decline, the potential to operate successfully in the UK market still exists through implementing such measures as partnership type arrangements with customers, offering high service levels and maintaining tight cost control.

“Another option for the operator is to grow the business either organically or through acquisition and there has certainly been a significant amount of consolidation in recent years.

For further information, please contact Jeremy Oliver of Garbutt & Elliott on 01904 464100 to view a PDF of the Survey Report please click here.