Search
  • Ricky Shafier

Nearly 50% of UK lorries are not in use. Is it time the government helped the haulage industry?

Logistics plays a huge role within today’s economy. It is estimated that the UK Logistics & Posts Sector is worth £55b to the economy and comprises 5% of the UK GDP. The industry also employs 1.7m people. But recent studies suggest they need more help.



On the 23rd March Boris Johnson declared courier & delivery personnel key staff, however, last week the RHA called on members to help them in asking for additional support from the Government. Since that announcement by the Prime Minister, roughly one third of the food lorries used by supermarkets and foodservice have come off the road, this according to a recent industry survey of 4,500 firms by the Road Haulage Association.


And now industry leaders and professionals have warned that many haulage companies face collapse unless they are helped.


Gavin Newlands, the SNP’s transport spokesman, has written to transport secretary Grant Shapps and chancellor Rishi Sunak warning businesses will be forced to close if they cannot survive a drop in volume caused by the crisis.


He is calling for urgent cash injections in the forms of grants rather than loans, a six-month exemption from vehicle excise duty, and a scheme to allow haulage vehicles to claim back fuel tax duty to stop the industry going bust.


“The Road Haulage Association has a significant number of hauliers operating on razor-thin margins, and the current emergency has left many fearing for the survival of their business,” Mr Newlands said.


“We cannot have a situation where a critical component of national infrastructure disappears in a matter of weeks in the middle of a pandemic – but that is the real danger facing the industry.”


One of the key issues facing haulage companies is the risk from banks and fuel suppliers withdrawing credit. It is an essential part of their business model and without it they would have rug swept from beneath their feet.


Another issue is that Coronavirus Retention Scheme is too inflexible for haulage firms and as such additional support is required.


Recently 6 main industry bodies came together together to write a letter to the Prime Minister detailing what must be done to help save the industry. Within this letter it was suggested that:


  • Almost 50% of haulage companies lorries are not in use currently

  • Average margins are circa 2%

  • Firms which operate with Construction, Waste, Removals, and Retail amongst the worst hit


The bodies suggested 5 key area where haulage companies require support which included:


  • Business rate holidays

  • Allowing weekly (Monday to Sunday) SORN refunds.

  • Cash Injection and Debt Support – In the form of a grant and which recognises an operators’ fixed costs (inc. leasing and running costs of lorries)

  • Essential-user fuel duty rebate for hauliers still operating in critical supply chain areas

  • Moving to a weekly furlough model (Monday to Sunday) which would substantially improve flexibility in the haulage sector.


Given the timescales and difficulties involved for some firms in obtaining additional funding the above would certainly be a welcome relief. Many companies have had to turn to alternative sources of finance as well. Given the government created the Future Fund aimed at supporting UK tech businesses it's not unfathomable to suggest a tailored scheme is created to help a huge industry such as Transport & Haulage.


If you would like any impartial advice or to discuss alternative funding options do not hesitate to call Plexus Finance on 020 3488 4969 or email info@plexusfinance.co.uk.

9 views0 comments