Future of UK road transport industry uncertain
Haulage
28th June 2010
It is unclear how the UK's road transport sector will fare over the coming year, with a range of factors influencing its potential success or failure. As a result, haulage companies are advised by Giles Insurance Brokers Ltd. to assess their cover requirements and ensure they have policies in place that will allow them to weather storms and take advantage of opportunities.
Conditions for the sector have been difficult over the past 12 months, with the impact of the freezing winter weather on distribution firms and fluctuating fuel costs affecting their profits. As the UK economy shows signs of recovery and retail sales start to pick up, business in the industry looks likely to increase, but growth remains fragile and the Confederation of British Industry recently forecast that growth will be "protracted as urgent action is taken to reduce the budget deficit".
Recent figures from Transporeon and CapGemini suggested demand has increased steadily within the European freight market over the last 12 months, although rates have continued to fall. However, the companies warned in the third edition of their Transport Market Monitor that haulage costs are likely to rise during the second quarter of 2010 as a result of capacity constraints and prices are expected to grow in response.
Meanwhile, the new UK Liberal Democrat-Conservative government has outlined its plans for the future of the transport sector in its coalition agreement, stating that it intends to invest in a high-speed rail network and promote the use of electric vehicles by supporting infrastructure.
In addition, the Road Haulage Association has welcomed recognition by the administration of the current unfairness in the UK system and the proposal for a system of HGV road user charging to be brought in that will provide parity between British and overseas hauliers. However, cuts are taking place in order to reduce the country's record budget deficit and could well impact upon the UK's already congested road network.
Commenting on the prospects for the haulage sector, Sarah Lyons, Group Managing Director of Giles Insurance, said: "With so little certainty within the UK's road transport industry, now is a perfect time for companies to re-examine their insurance needs and prepare themselves for anything the future may hold.
"Predictions by experts range from a strong recovery to a double-dip recession, while exports may be driving some sectors as companies are being urged to reduce road miles and cut their carbon emissions. All these factors must be taken into consideration while good policies can guard against unforeseen problems."
The Freight Transport Association recently reported that lessons should be learned from the bitter winter weather, which saw many UK roads closed because of snow and ice. According to the body, salt supply management needs to be improved and drivers' hour concession arrangements overhauled in order to prevent similar problems occurring in the future. In its response to a Winter Resilience Review, conducted by the government, the organisation also said local authorities' preparations should be strengthened to enable deliveries and collections to be made effectively.
In response to the severe conditions experienced last winter, companies should reassess their risk management and insurance strategies to ensure that disruption to normal operations is minimised as much as possible and any financial penalties are not substantial.
Specific policies that haulage companies might like to speak to a specialist broker about include goods in transit, HGV breakdown, legal expenses cover, commercial vehicle products, public and employers liability, loss of use and fleet protection.
