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New year, new outlook
Ill1T Mien MGdIrati 2009 is over, so CM's Trucking Britain
Out Of Recession survey reveaLs RV IMMHZ your hopes and fears for 2010.
By Justin Stanton SO 2009 is done with, welcome 2010. The latest Trucking Britain Out Of Recession survey reflects the turning of the year. Many of the questions we asked in December related to the outlook for 2010 and that outlook is mixed.
We asked about revenue expectations for 2010 compared with 2009. The data looks like this: • 10% or more increase 10% • 1% to 9% increase 20% • The same -26% • 1% to 9% decrease 23% • 10% or more decrease 17% The picture is little different fOr profitability:
• 10% or more increase 10% 1% to 9% increase 23%
• The same 27% • 1% to 9% decrease 18% • 10% or more decrease 18% Analysis of this data shows that operators serving the construction industry are least confident about 2010. Only 28% expect any rise in revenue (against 30% overall) and only 26% predict a boost in profit (against 33% overall), while 45% expect a drop in revenue (against 40% overall) and 43% a fall in profit (against 36% overall).
The most confident arc those serving the manufacturing sector. 40% expect an increase in revenue (30% overall) and 49% predict a boost in profit (33% overall), while just 28% expect a drop in revenue (40% overall) and only 13% expect a fall in profit (36% overall).
Asked if they expect any of their rivals to go out of business this year, 66% said either 'yes definitely' or 'yes probably! Among hire-and-reward hauliers, the corn
bined total for those two answers was 72%. Fully 78% of operators in the service industry expect rivals logo out of business this year, with high figures of 73% and 71% also registered by operators serving the retail/wholesale distribution sector and construction industry respectively.
Expectations of rival collapses was noticeably higher among medium-sized fleets 78% compared with 59% among small fleets and 64% among large fleets.
2010's big headaches
The behaviour of rivals specifically tendering at suicidal rates figured highly among the list of operators' concerns for 2010. Of the quarter of respondents that mentioned rates, one outlined this worry: "Haulage companies selling below cost, and undercutting companies that know their costs, which causes a false market value in the eyes of the customer."
Predictably,the most widespread concerns relate to any operator's single greatest operating cost the price of fuel.
A third of respondents cited fuel prices as their primary worry.
A quarter of respondents mentioned a combination of cash flow, late payment and bad debt as their biggest worry.
A handful are worried about customer loyalty, especially given rivals' low rates, while a few others are concerned about the economy in general, particularly the fear of a double-dip recession.
No concerns were expressed about a change of government. while one respondent confessed to a carefree 2010: -We have no major concerns because we are increasing our market share."
Staff and vehicles
The employment forecast is predictably mixed, as 11% expect to employ more staff this year than in 2009, while 57% expect to employ the same number, but 32% expect to employ fewer.
Hauliers serving the agriculture sector are the least likely to take on more staff this year (just 5% expect to do so), hut the highest response to employing fewer staff this year — 32% — came from operators in the service industry.
Analysing the responses from major fleets reveals some vicious swings, with 18% expecting to employ more staff, 48% expecting to employ the same number. but 35% expecting to employ fewer. Responses from small and medium-sized fleets are much closer to the overall survey results This picture of consolidation is repeated when vehicle purchasing for this year is considered.
A total of 41% of respondents to the survey said they do not expect to acquire any new vehicles this year. while 63% said they do not expect to acquire any used vehicles this year.
However, 36% do expect to acquire between one and 10 new vehicles, while 11% expect to acquire between 11 and 25 new vehicles, and 4% expect to acquire more than 51 new vehicles. In the used market, 30% expect to acquire between one and 10 vehicles, while 1% expect to acquire between 11 and 25 vehicles.
Analysis shows that logistics/ contract distribution specialists are most likely to purchase new vehicles this year. as 69% said they plan to do so. The figures for ownaccount operators and hire-andreward hauliers were 63% and 44% respectively,
Sector analysis shows operators in the service industry, are most likely to acquire new vehicles (64%), while those in construction are least likely (43%).
Predictably, fleet size analysis reveals that just 10% of major fleets do not plan to acquire any new vehicles this year, and that the smaller the fleet, the less likely unv vehicles would be purchased.
Recent performance
A third of respondents said their revenues rose in the last quarter, 20% reported they had stayed the same, and 45% declared a fail. Freight volumes map closely with these figures: 37% up, 23% the same, and 38% down.
The construction industry suffered worst for revenue: 59% of operators in that sector reported a fall. But volumes were worst hit in agriculture: 59% down. But, confidence is still high: 65% of respondents are optimistic about the next quarter, while 77% are optimistic about the next 12 months.
The only sector with lower levels of confidence is construction. More than 60% are optimistic about the next quarter, and 73% are optimistic about the next 12 months — but those are clearly still significant majorities.
A total of 29% said their business has already recovered from the recession, while 45% expect to recover in the next 12 months.
• The next Trucking Britain Out Of Recession survey will be available online from Monday 11 January. To take part, log on to www.roadtransport.com/britain
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