Green shoots or just more weeds
Page 20
Page 21
If you've noticed an error in this article please click here to report it so we can fix it.
July and August have proved to be tough months for small hauliers as liquidations and winding-up petitions hit the headlines leaving some wondering: 'Green shoots? What green shoots?'
Words David Harris
IS THE RECESSION ending or not? It seems to depend where you look, but the lists of companies going bust does not make happy reading for those looking for optimistic signs. For many small hauliers, things have gone from bad to worse this year, with a flurry of liquidations in July and August as some operators found they could no longer carry on trading.
Those who have had to liquidate in the past few weeks include Lincolnbased Geoff Mason & Son, where director Tim Mason says the biggest problem was losing a customer that provided nearly half the company's work to someone who offered a lower rate. Mason is battling on as an independent trader after the liquidation of the original company, so jobs have been preserved for the time being, but there is no doubting the toughness of trading conditions.
In the same week that CM reported the liquidation of Geoff Mason & Son, there were winding-up orders on several other hauliers.
One to go was Cam European, of Royston, Hertfordshire, a haulier with 11 vehicles and 20 trailers on its 0-licence, and which owed an estimated £500,000 to the taxman, as well as a total of it m to 25 other creditors. In addition, winding-up orders were agreed on Logistics GHT of Dover (four vehicles and two trailers on its 0-licence) and Quick Freight UK, of Bradford (four vehicles and four trailers). It has become a sadly familiar story in 2009, which is one reason why any talk of the end of the recession sounds very wide of the mark for some small hauliers, who must find themselves asking: "Green shoots? What green shoots?"
Not getting worse
Kate Gibbs, head of communications at the Road Haulage Association (RHA), does not deny the extent of the hardship, but she is not entirely pessimistic either.
She says: "It is true that a lot of small hauliers have gone, hut there haven't been many reports of things getting any worse. There is a feeling across the industry that we are now bumping along the bottom."
She adds that if you ask a general haulier how it is doing "and it says it is 'OK'. it is probably doing bloody well'.'
What does not help, she argues, are the cost issues that continue to dog the haulage industry, recession or not. The 2p/litre increase in fuel duty — just two days ago — and the continuing downward pressure on already unsustainable rates are not going to help small hauliers to survive.
if the industry was a plasticine then there are a lot of people sticking pins in it," she says.
For the pressure on rates to ease, there probably needs to be an upturn in business that is not yet apparent. There was a 3.5% decline in overall traffic levels between the first quarters of 2008 and 2009, with a 12% decline in heavy goods traffic.
Raise rates
A survey of RHA members found that 70% had seen a downturn in business and most are still reporting pressure on rates,with little expectation of an upturn in 2009, although the RHA is urging hauliers to raise their rates in the light of the latest fuel duty increase, even though they are likely to face objections from their customers.
RHA director of policy Jack Semple says: "The haulage industry knows the difficulties facing many of its customers, but hauliers must have sustainable haulage rates."
In such an atmosphere, one of the difficulties in identifying the first signs of an upturn is that anyone doing a bit better than average won't necessarily be shouting about it from the rooftops. But those that are doing better often seem to be taking advantage of economies of scale: it sometimes seems as if the biggest firms can take more knocks.
There can hardly be a better justification for making the cuts in the first place. One of the lessons learnt from this recession is, whether you are a big or a small haulier, you have to be ruthless enough to make the cuts necessary to adjust to market realities.
Market realities However far off a real recovery might seem to some hauliers, all should start thinking about how they will deal with the upturn when it comes.
The Freight Transport Association (ETA) has expressed fears of a looming skills shortage once the UK does start to climb out of recession, calling for investment now in training enough people to ensure that haulage and the rest of the supply chain is not too weak to cope with recovery.
Nic Allen, FTA general manager for training, says: "The majority of those working within the logistics sector have been men over 40. With widespread redundancies and job losses across the entire sector, we are deeply concerned, as are our members, that we will lose that skills base."
Losing their skills base might not be the first concern in most hauliers' minds at the moment, but the fact that someone is worrying about it at least means there might be some hope for 2010. Even if you can't see any green shoots, let's hope they are under the ground, waiting to poke through. •
FOr.:71"11"EST ,I.111.11,1.15 IT: