Fuel rises tarnish Eddie Stobart performance
A quarter of the revenue increase at Eddie Stobart in the past year was down to the increasing cost of fuel being passed on to customers.
But the rise in rates did not off-set all cost pressures, and the transport and warehousing division of Stobart Group saw profit fall for the period.
For the 12 months ending 29 February turnover rose to £519.5m, from £475.3m a year ago. But profit before tax fell from £34.2m to £27.4m.
Stobart admits that it was hit with cost rises of £4m “which have not been fully recovered through rate increases, mainly due to the increase in our customers' costs”.
During the same period it also closed its depot in Leeds and reduced headcount by 284 in the ambient fleet.
Stobart is also restructuring its chilled operations, with the closure of its Corby and Alcester distribution centres (DCs), transferring to a new site in Manga Park, near Lutterworth in Leicestershire.
The chilled business, despite winning a new contract with Arla Foods it saw a volume decline, equating to a fall of approximately £3m.
Chief executive Andrew Tinkler tells Commercialmotor.com: "It is a tough environment and we are bumping along the bottom. Going forward, and even in the second half of the last financial year, margin improvements have come through.
"Our restructuring will be done by the end of June. Our customers buy into what we are trying to do."
UK facing looming driver shortage
The UK is facing a looming LGV driver shortage with the need to be CPC accredited by September 2014, and and a relatively old workforce, creating very real risks to recovery.
A new report from Skills for Logistics (SfL) titled A looming Driving Shortage? reveals there has been a 31% decline in LGV tests passed (C, C+E, C1, C1+E) during the last four years, with the 2010/11 total standing at to 22,700 according to Department for Transport data.
Worse, not all of these licence holders are becoming professional drivers: just over 12,000 individuals applied for the now mandatory (for all new drivers) Driver Qualification Card, however this includes coach and bus drivers too.
The findings back up CM’s own investigation into the issue (CM, 15 March), which revealed that tests taken (C and C+E) had more than halved from 2005/06 to 2009/10 to just 43,094. Those successfully passed in the same period fell 45% to 21,749.
The shortage will be even more acute for the sector as more than a quarter of LGV drivers are aged 60 or above, while just 1% are under the age of 25. Drivers retiring in the next five years will leave a demand for 48,000 drivers.
While there are 1,545,000 LGV licence holders, just 299,000 drive professionally. SfL estimates there is currently a shortfall of 2.7 million Driver CPC training hours, suggesting many older drivers do not intend to continue working past the September 2014 CPC deadline.
“The driver shortage is not new but its effects were mitigated by the economic downturn,” says Ross Moloney, director at SfL. “Now, as the UK economy recovers, resolving this issue will be critical to avoid holding up growth.”