With 'freight-intensive' industries still in decline and the driver shortage continuing to bite, it's not all rosy for road haulage - at least according to the latest FTA survey.
Driver shortage
The shortage of truck drivers in the UK is easing, but it remains a challenge for a quarter of all operators, according the latest Freight Transport Association (FTA) quarterly survey. The survey, published at the end of June, found that this year 25% of FTA members asked were unable to find new drivers or experienced long delays in doing so. At the same time last year the figure was 27%, indicating a slight improvement.
But drivers are not the only challenge for operators. Warehouse staff, fitters and transport managers are all even harder to recruit, says the survey. The driver shortage is also an issue in other European countries. The survey indicated "anecdotal evidence" that even in Eastern Europe LGV driving is becoming a less attractive profession "since manufacturing jobs are plentiful and allow more sociable working hours".
International haulage
The long-standing decline in the amount of international business conducted by UK hauliers has continued to reverse, says the survey. International road haulage activity rose by an average 3.5% per year between 2004 and 2006, after a catastrophic four years during which market share of UK-based international haulage fell from 39% to 26%. Despite the rise in absolute volumes the market share remains static at 25%, although it has stopped falling.
One reason for the relative improvement, suggests the FTA, is that the sterling/euro exchange rate has remained fairly stable since 2004. Improving economic performance in the key UK export markets of Germany, Italy and France has also helped. The survey says: "The rebalancing of economic growth rates across Western Europe has led to import and export volumes out of the UK growing at similar rates. This has helped UK-based international hauliers stabilise their market share despite rapid growth in the presence of low-cost hauliers from 2004 accession states."
Domestic haulage
Despite the decline in industries that give hauliers lots of work, including so-called 'freight-intensive' activities such as mining and quarrying, operators still believe road freight will continue to grow. While there were drops in GDP for mining and agriculture in the first quarter of 2007 compared to the same quarter last year, most other sectors showed growth. This includes manufacturing, construction, wholesale and retail. The challenge for hauliers is that the fastest-growing sectors are 'freight-light' businesses such as hotels, business services and finance, which went up between 2% and 10% compared to the same quarter in 2006.
The regions
This year has shown a marked difference in operators' business optimism depending on the part of the country they operate in. Operators in the Midlands came out as the most optimistic, followed by those in London and the South-East, with those in the North of England most pessimistic about business levels. In Scotland and Northern Ireland, the average operator expects business to remain flat.
The roads
Faith in the UK roads network continues to crumble. Nearly half (49%) of respondents report that road network reliability in 2007 is worse than it was a year ago. The rate of deterioration for trunk roads and motorways was slightly less than for roads in built-up areas. Rail users of bulk and conventional freight were also unhappy, with 20% reporting poorer service than this time last year. Opinions on intermodal services remain largely unchanged.
Buying new trucks
Operators say they still feel under pressure to buy new vehicles, but this is not being translated into increased LGV registrations. The FTA believes this is because of two separate peaks in truck registrations in 2006, triggered by the introduction of digital tachographs and the introduction of Euro-4 standards. In both cases it appears that operators brought forward truck purchases - with tachographs so they could delay switching to digital tachos a little longer, and with Euro-4 so they could take advantage of VED discounts of £500 on Euro-4 trucks registered before these cleaner vehicles became mandatory.
Climate change
The survey indicates that it is not just ethical environmentalism that makes hauliers become greener - it usually saves them money as well. Around 90% of hauliers say they monitor the amount of fuel their trucks use, and around 80% regularly review their vehicles' routes in order to minimise empty running. Both measures make economic as well as environmental sense. In general terms the FTA survey points out that rising world oil prices mean fuel is now up to a third of the operating cost of a truck, which has already led to hauliers looking for fuel-efficient vehicles and giving their drivers training in fuel-efficient driving. Competitive pressure also means hauliers are increasingly seeking to run vehicles at night and avoid congested periods of the day, when fuel consumption increases and journey times are unpredictable.
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