A steep increase in the number of road haulage firms filing for insolvency has cast fresh doubt on the health of the logistics sector.

 

 

The second quarter of 2017 generated some worrying figures. Trade bodies, such as the FTA, have expressed concern over what the data indicates, and how it’ll be addressed.

 

 

Between April and June of this year, the number of road transport firms that went bust was almost double that of the same period in 2016. Haulage insolvency has also reached a 5-year high.

 

In those three months in 2016, a total of 32 UK road haulage businesses filed for insolvency. But in June 2017, the figure climbed to 59.

 

After the FTA’s request for a cut in fuel duty was ignored by the Chancellor, the association is again pressing the government to review options for the logistics sector. Indeed – one of the major factor contributing to the industry’s worsening economic position is the rigidity of diesel prices.

 

Research undertaken by the FTA shows that, for the average 44-tonne lorry, fuel costs make up one third of operating expenses.

 

The price of diesel is a source of increasing concern for hauliers, small or large. The association says that an increase of a penny a litre could add £470 to the annual cost of running a single vehicle. When this is scaled up to a 250-truck operation, we can see how this would wreak havoc on the firm’s balance sheet.

 

As for those running under 10 vehicles, such a shift could lay waste to ever-tenuous profit margins.

 

Haulage insolvency is just one of the issues on which the FTA is engaging governments, both British and European.

 

The State has yet to formalize its stance on the matter.