The Growth of UK Road Haulage
The latest statistics from the Department for Transport have confirmed that 2015 was the best year yet for road haulage, continuing a trend that has been ongoing for a number of years now. While more goods were moved – an increase of 12% – the distance lorries travelled only increased by 9%.
According to the Road Haulage Association’s director of policy Jack Semple, “This is a great performance by a big, diverse industry – and the reasons are dynamism and innovation.” Semple credits the use of higher capacity trailers, greater collaboration among hauliers – for example, through the establishment of pallet networks – as well as more efficient routing and scheduling for the relatively smaller increase in miles covered.
The Impact of Brexit
Of course, while figures like these are encouraging, they are by their very nature retrospective, and back in 2015 the country had not yet voted to leave the EU. What will happen over the coming months will perhaps prove to be more indicative of the future of UK road haulage.
Close Brothers Business Barometer is a quarterly survey of over 900 UK SME owners and senior management across a range of sectors and regions. Its latest survey, published this month, looked specifically at the impact of the Brexit vote on SMEs – and the conclusions were a mixed bag.
Overall, more than half the businesses surveyed (56%) said they had felt no impact as yet. Of those who had, results differed greatly by region. The north-east claimed to be least affected (just 20% said they had been impacted), while businesses in Greater London have been more extensively hit – 46% said they had been affected. There was a relatively even split between those businesses that said they had been positively impacted and had seen an increase in business (40%) and those who had been negatively impacted and had seen a downturn in business (43%).
Future Challenges
It’s arguably still early days for the logistics industry to see the full impact of the Brexit vote – as we said in our July blog, any effect in flow-through will likely start to show up from this month on – but it is interesting to note that according to an analysis by Oxford Economics, trade with the EU is already shrinking rapidly as a share of Britain’s global commerce, and could fall to below one-third of the UK’s overseas market in the coming decades.
August’s Close Brothers Business Barometer survey showed that the biggest issue facing hauliers was driver retention. With the cost of recruiting new staff estimated at £25,000 per head for UK SMEs, and an ageing workforce in place, attracting new, younger drivers has to be a priority for the sector – especially as, following Brexit, there is a concern that fewer EU drivers will be available to drive for UK firms.
But let’s end on an optimistic note. Last year was the best year yet for UK road haulage, and the sector has been on an upward trend for several years, so I’m sure the dynamic, innovative nature of the logistics industry will see us rise to meet any challenges the shifting landscape might throw at us. We’d love to get your opinions on this, so please leave a comment below or send us a tweet!