Excess haulage capacity forecast in gloomy survey
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by CM repor WIDESPREAD excess capacity in the haulage industry will emerge in the next 12 months. This is one of the gloomy predictions of a business survey carried out by one of Britain's biggest road haulage groups. Slackening in demand for freight transport will result in the further intensification in competition, additional pressure to cut rates and an increasing number of firms ceasing to trade. "More than ever the customer is king," says the survey report.
The experience gained by managements in operating in a highly inflationary environment during the past 12 months will be useful in the period ahead. Although prompt implementation of price rises to meet cost increases is essential, the report says that "market conditions are likely to make it difficult to obtain rate increases sufficient to offset all cost increases in full." However, the authors of the report feel that the achievement of higher productivity will be equally as important as rate increases in maintaining profitability in the anticipated market conditions.
Underlining the grim future facing general haulage, the survey does not anticipate any upturn in business before mid1976. Contract hire, however, is not expected to share the decline of the freight ma: as a whole. There is no ind tion of any reversal in the duction of the smalls parcels sector, and there been a sharp down-turn certain areas of the chen industry resulting in a diffi market for spot tanker I Only in household remo does the survey see any provement, with the mew in business likely to last t the next year.