This article appeared in the Press on Wednesday, 20 June, 2007.

A Hard Time for Haulage

Jeremy Oliver Director

A DEADLY combination of red tape and stiff competition from European businesses is threatening to send Yorkshire's haulage industry into decline.

That is the conclusion of a specialist market survey, commissioned by York accountants Garbutt & Elliott, into various aspects of the state of the logistics and distribution industry and its future prospects.

Sixty separate logistics and distribution companies, based in Yorkshire and Humberside, contributed to the findings.

The survey results, released today, reveal many hauliers are fearful about the future, with 62 per cent of respondents citing the burden of Government legislation, high fuel tax, and ever-increasing competition from European businesses as the main reasons for their pessimism.

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.

"Back in 2005, the Burns Report highlighted the fact that the costs for a UK operator of running a 44-tonne artic were 22 per cent higher than for Czech operators, 31 per cent higher than for Polish operators, and 37 per cent higher than for Hungarian operators.

"Nothing suggests that the situation has improved since the Burns Report was issued," he said.

The respondents clearly felt European businesses had unfair competitive advantages, the major bugbear being the differing levels of duty paid on fuel across the EU.

Of the small and medium-sized operators' surveyed, 30 per cent said their main goal for the future was simply to survive.

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. The introduction of congestion charging in other UK cities in addition to London, and digital tachographs, are also likely to have a further impact on the sector."

But it is not all doom and gloom. The Measures For Road Safety Act, at the consultation stage, proposes to give powers to Vehicle And Operator Services Agency (VOSA) inspectors and the police to collect on-the-spot fines from foreign hauliers, and to immobilise vehicles if they discover hours or safety offences, levelling the playing field somewhat.

Mr Oliver said: "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."

THERE should be "disincentives" for foreign hauliers operating in Yorkshire.

That is the view of Derrick Potter, executive chairman of The Potter Group, which has a massive warehouse, road and rail base in Selby.

Mr Potter, who is soon to become chairman of the UK Warehouse Association, said: "The logistics industry is making only about two per cent return, and it is getting worse all the time, as more and more heavy goods vehicles are coming into the country from Europe, where costs of operations are cheaper."

At the moment imports from countries like India and China are arriving in large ships at big ports like Rotterdam which can accommodate them, and the goods are then transported to the UK by road.

But if Europe's hauliers were made to pay the same relatively high road and fuel taxes in Britain, as well as being subjected to the same rigorous road safety checks as in the UK, or restrictions under the Work Time Directive (WTD), then they would be more inclined to bring goods in containers to ports which were being enlarged, like Felixstowe.

"The UK haulage industry would then deliver the goods to their destinations," he said.