The calm before the storm
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justin.stantorarbi.co.uk THE THIRD QUARTER of 2010 was a positive one for many transport operators, according to the latest Trucking Britain Out Of Recession survey. More than half enjoyed an increase in volumes and nearly half were buoyed by a boost in profit.
A total of 52% said volumes either increased a little or a lot in 03 compared with 02 and 37% said that volumes were better than expected.
Furthermore, 41% said profit had increased either a little or a lot in Q3 compared with 02 and 33% said that profit was better than expected.
Confirmation of the economy's bounceback in Q3 can be found in analysis of the volume data: hire and reward hauliers were more likely to have experienced an increase in volumes59% of them said they enjoyed a boost, compared with 58% of logistics and contract distribution firms and 45% of own-account operators.
Indeed, that volume increase was better than expected for 39% of hire and reward hauliers. Not only did 41% of them say that profit increased in 03 2010 compared with Q3 2009, but also 36% said that the increase was better than expected.
Agriculture and manufacturing were the sectors that experienced the most growth in volumes and profit: 63% and 55% respectively for the first sector, and 68% and 51% respectively for the latter sector. In both sectors, either a majority or a significant minority of respondents said the increases in both volumes and profit were better than expected.
Unsurprisingly, nearly half of all respondents (47%) expect volumes in the current fourth quarter to be better than in Q4 2009, and 40% expect a profit boost.
However, it should be noted that the research was carried out before the government unveiled the full scale of its spending cuts in the Comprehensive Spending Review, so one might make the educated guess that those expectations will be modified now.
For the record though, operators in the retail and wholesale distribution sector are the most positive about 04, with 62% expecting an increase in volumes and 53% predicting a boost in profit.
Diminishing rivalry
While we have speculated that a great number of operators have ultimately coped with the recession by 'right-sizing' their business, it would he foolish to fail to acknowledge the number of company collapses we continue to report, businesses that for one reason or another have not been able to cope with the recession's impact.
We asked respondents if more of their rivals and peers had entered administration this year than in 2009: 45% said yes. Those who felt this most keenly were, not unexpectedly, hire and reward hauliers: 54% answered yes. In contrast, 40% of logistics and contract distribution firms and 32% of own-account operators offered the same answer.
Optimism setback
Following two heady months in the summer, optimism about the future suffered a little. A total of 73% of respondents said they were either very optimistic or fairly optimistic about their company's prospects for the next 12 months — down from September's record of 81%. Given that 24% said they were either not very optimistic or not at all optimistic, the optimism index score for October is +49,
clearly down on September's +64 and August's +55, hut at least above July's +42.
Those that were most optimistic were logistics and contract distribution firms (88% ), operators serving the retail and wholesale sector (86%), and those businesses with more than 51 trucks (86%).
The slight setback in optimism is reflected by the number of respondents stating that their business has already recovered from the recession: 43%, down from the record 49% posted in both August and September. A further 26% expect their business to recover from recession within the next 12 months. •
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