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Thank God it's Christmas
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The festive period is a vital one for many operators where cash is still king. CM reviews the findings of the latest Trucking Britain Out Of Recession survey.
By Justin Stanton AS CHRISTMAS approaches many in the transport industry are gearing up for the peak.
Anecdotal evidence suggests this peak came late and suddenly last year (19 December). Expectations for this year are mixed.
The latest Trucking Britain Out Of Recession survey reveals that Christmas is either very or fairly important for 52% of the near-300 respondents; just 17% said it was not important at all.The Christmas volumes forecast looks like this: • Up 10% or more on last year — 13%.
• Up 5% on last year — 11%.
• About the same as last year — 36%.
• Down 5% on last year — 19%.
• Down 30% or more on last year —l8% Analysis reveals considerable variances in forecasts: for example, 32% of hire or reward hauliers expect increases, but just 13% of logistics/contract distribution firms share that hope. Larger fleet operators (51 vehicles or more) are almost twice as likely to be expecting growth compared with the smallest fleet operators (up to 10 vehicles): 35% against 18%.
Intriguingly, those most affected by the Christmas peak are not getting carried away: of those serving the agriculture industry only 9% expect a real rise in volumes this year, while 55% expect volumes to be static; and of those serving the retail/wholesale/distribution sector, 31% expect increases, 35% expect the same as last year, and 30% expect a fall.
Cash and the banks
As part of November's survey, we took the opportunity to ask a few questions about cashflow and operators' relationships with banks.
A total of 65% said they were either very or fairly concerned about cashflow. That figure rises to 67% for hire or reward hauliers, while logistics/contract distribution firms and own-account opera
tors are a little more relaxed, with 51% and 54%, respectively, expressing concern.
Reviewing the data by primary operational sector shows operators serving the construction industry are the most concerned (73%). And, to nobody's surprise, the bigger the fleet, the smaller the concern: 70% of the smallest operators are concerned compared to 46% of the largest.
These patterns repeat themselves when analysing responses to "are your clients extending their payment terms?" The overall figure is 62%, but rises to 73% of hire or reward hauliers, and falls to 40% of own-account operators. Operators serving agriculture and construction are suffering the worst (78% and 76%).
These worrying statistics are somewhat offset by the strength of operators' relationships with their banks/lenders.
Asked to describe their relationship with either their bank or lender, respondents said: • Excellent —37%.
• Good — 31%.
• Fair — 18%.
• Poor — 5%.
There were no significant variances, by type, sector served or size.
Nevertheless, the verbatim statements about relationships with banks/lenders naturally leant towards the negative: • "We are in the process of switching banks due to our current bank letting us down."
• "They are treating us like startups when we have been trading with them for 31 years."
• "They need to show a better understanding of the business issues that impact our industry,"
Confidence
Overall, revenue and volumes have not been great in the past three months: 29% and 30% reported revenue and volume growth respectively, while 55% and 51% reported declines. H ut the forecast for the next 12 months shows a strong expectation of real growth returning: overall, 79% are optimistic about their business's prospects.
Hire-or-reward hauliers aren't as optimistic (68%) as logistics/ contract distribution firms and own-account operators (81% and 89% respectively).Optimism grows with fleet size: 70% of smallest operators, increasing to 87% of largest operators, Overall, 25% said they've already emerged from recession. while 50% expect to do so within the next 12 months
• The next Trucking Britain Out Of' Recession survey will he ready at noon on Friday 4 December. Go to vvww.roadtransport.com/britain