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by George Malcolm
Better times ahead . . ?
BETTER TIMES are ahead for road transport? There is a hint that they are in the latest predictions of the Henley Centre, an august body whose main function in life is to forecast the future.
The "better times" hinge on the Centre's forecast that fuel prices are likely to remain the same for some time to come.
The Centre's latest medium/long-term analysis of oil market trends indicates that oil prices are unlikely to rise as sharply over the next five years as was hitherto expected. A more sluggish outlook for world oil demand will, says the Centre, limit the scope for significant increases in oil prices in real terms.
"We now expect the official OPEC market price of 29 dollars a barrel to remain in force until 1985 with a tightening in the oil market towards the latter part of forecast period leading to some modest real price increases," it says. Over the period 1983/88 world crude prices are forecast to decline three per cent per annum in real terms, the Centre adds.
This prediction will not, however, be of much consolation to the many firms in the industry that have gone, or are shortly to go, into liquidation.
The latest report on the motor trades (which includes haulage) from Dun and Bradstreet, which monitors the performance of companies, continues to paint a dismal picture of business failure. The figures concerning company liquidations for the first nine months of 1983 show an increase of 8.5 per cent over the same period of 1982, which itself set records. They totalled 1,205, bankruptcies accounting for 577 of this total.
Not every bankruptcy is caused by bad management, bad luck, or both. Sometimes it is deliberate. The Road Haulage Association has been pressing for something to be done for some time about cowboy hauliers who run up debts as a company, go into liquidation and then start up a company and do the same thing. Quite a number of hauliers have been hit by such manoeuvres.
It was not therefore surprising to find the Association welcoming a statement in The Times of October 8 that the Department of Trade and Industry is thinking of publishing a White Paper in the New Year with a view to legislating on the issue, which was, in fact, raised in the Cork Report on Insolvency.
This would aim to prevent companies being liquidated to avoid their creditors, and the directors setting up in business again (possibly at the same address and even as soon as the next day) with the protection of a new limited liability company, the Association points out.
It adds that it appears that, under the Cork Report's proposals, company directors could be sued for wrongful trading if they behaved irresponsibly, and would thus lose their limited liability.
As the Association says, legislation on these lines would be welcomed by all responsible road haulage operators. The RHA has raised this matter with Secretaries of State for Transport on a number of occasions, as there are continual complaints about undischarged bankrupts being able to enter and leave the haulage industry, seemingly at will, often using bogus names and various other strategems. Such practices, it rightly says, have the effect not only of depressing haulage rates but of undermining public confidence in the industry.
Dun and Bradstreet, however, in the report referred to earlier, like the Henley Centre, gives a cautious hint of brighter things to come, commenting that although business failures are still running at considerable levels, there may be signs that the economy is stabilising.
In contrast with the gloom of the Dun and Bradstreet statistics, however, one of tl transport "big guns" of the country, Mitchell Cotts, has come up with some pretty g results from its transport interests.
For the group as a whole, which has wide interests at home and overseas, it was t improving UK performance helped the company to weal overseas difficulties. And its transport interests contribut strongly to this.
Turnover from the compa transport activities totalled £178,684,000 compared with £160,098,000 in the previous year. Profits from these total £4,142,000, or 32 per cent of total profits, which was, in fa slightly down on the £4,169,000 of 1982 and represented 27 per cent of th total group profits.
This increase in share rest from a fall in turnover (£195,806,000 in 1983 comps with £200,167,000 in 1982) a Mitchell Cotts engineering activities where profits also dipped from the 1982 level o £11,251,000 to £7,051,000 in 1983 (percentage of total pro went down to 55 from 72).
Revenue from general trac went up from one per cent in 1982 when profits of £241,0C were obtained from a turnm. of £27,360,000 to 13 per cent 1983 when turnover was £30,829,000 and profits £1,674,000.
In turning in presentable profits on its transport operations, Mitchell Cotts is doing no more, or less, than other market leaders in road transport. The company's performance follows a patter set by the other well-run mar leaders — like Transport Development Group, United Carriers and Wincanton — wl have all managed to retain th profitability levels in spite of current viciously competitive situation in the haulage indur The most intriguing accour and report are yet to come — those of the National Freight Consortium which has now completed its first financial yi