Trucking Magazine – August 2019

http://www.truckingmag.co.uk August 2019 TRUCKING 7

Europe braces for 10% drop in trailer demand

N

ew data has revealed average

company profit margins for UK road

haulage industry have dropped to

their lowest levels in the last three years.

The latest figures – taken from independent

market analysis of 1600 industries by Plimsoll

Publishing, which is constantly updated with the

latest data from Companies House – show

average company profit margins for haulage firms

in the UK have decreased to 1.9 per cent for the

current year. This is down from an average profit

margin of 2.3 per cent for the previous year.

The figures are the lowest witnessed by the

industry in the three years, with average profit

margins having reached a high of 3.1 per cent

during that time. 

Results by company size (based on sales)

illustrate a consistent decline in average

profit margins across the industry. Data from

France, Italy, Spain and the rest of Europe

reveals a similar picture, with average profit

margins for haulage firms having dropped

across the Continent.

The most significant decline was recorded in

Spain, where average profit margins for haulage

companies fell from 2.6 per cent last year to

2.1 per cent for the current year.

Across associated industries in the UK, the

latest data also reveals a fairly consistent picture

of decline. Average profit margins for cargo

handling services have decreased from 2.5 per

cent last year to two per cent for the current year.

In the courier industry, profit margins have

fallen from 1.5 per cent to 1.3 per cent for the

current year. Average profit margins also

decreased for same-day couriers, tumbling from

1.4 per cent to 0.9 per cent for the current year.

Meanwhile, average profit margins in the

freight-forwarding industry have remained almost

static, increasing slightly from 1.4 per cent last

year to 1.5 per cent for the current year.

Gov consults on older tyre ban in bid to improve road safety

N

ew laws banning older

tyres on large vehicles

to improve road safety

could be introduced later this

year, according to the

government.

Tyres aged 10 years and older

would be banned from use on

trucks, buses, coaches and

minibuses under new proposals,

which have now entered

consultation stage.

If supported, the new rules

could be in force by early 2020.

The consultation follows a

campaign by Frances Molloy,

whose son Michael died in a

coach crash caused by a

19-year-old tyre in 2012. Her

work with the ‘Tyred’ campaign

led to the consultation being

launched in June.

“Our priority is keeping people

safe on our roads, and we are

taking action to reduce the

number of people killed or injured,”

said road safety minister, Michael

Ellis.

“There is increasing evidence

that age affects the safety of tyres,

which is why I think older tyres should

not be used on large vehicles.”

The consultation, which runs for

10 weeks, asks whether older tyres

should be banned on trucks and

other large vehicles, as well as

whether this ban should be

extended to taxis and private hire

vehicles. It follows other measures

the government has put into place

since 2012.

Bus operators have been

advised not to use older tyres at the

front of their vehicles. Inspections of

130,000 buses by DVSA since 2017

showed only 0.06 per cent were in

breach of the guidance.

The DVSA also updated its

guidance on maintaining

roadworthiness to say tyres aged

S

everal West European

economies are bracing for

downgraded 2019/

economic growth forecasts

which will cause a slowdown in

demand for trailers in the region

during this year, according to a

new report.

In the first five months,

trailer demand has fallen by an

estimated two per cent – and a

10 per cent fall is forecast for the

year – based on findings by

industry analyst, CLEAR

International.

Several large West European

countries did see some growth

in the first quarter of 2019,

including the UK, Belgium,

France, Germany and the

Netherlands. With the exception

of France, the amount of growth

was quite small, said CLEAR,

and is expected to turn into a

reduction of trailer demand in the

second quarter.

Spain, Italy, Austria and

Denmark all had falls in trailer

demand in Q1.

A cyclical slowdown (but not a

recession) in European

economies has been on the

cards for some years. The

catch-up demand that has been

pushing the trailer market is now

over, CLEAR said. The trailer

parc is fully replenished, despite

the fact road transport demand

has yet to return to 2006 levels

(ie, pre-global financial crisis).

Furthermore, it is 10 years

since the decimation of the trailer

market in 2009 – and the

market has never gone 10 years

without a slowdown, the analyst

pointed out.

Trailer demand reached a high

level in 2018, rivalled only by

2007 which had unnaturally

healthy trailer sales largely

brought on by the number of

countries that joined the EU in

2004-07. All these factors point

to a fall in demand for new

trailers in 2019, said CLEAR.

But fortunately for the industry,

the fall is likely to be relatively

modest and short-lived.

So should the industry be

panicking over the forecast fall in

the market? Arguably not. From

2017-21, trailer registrations are

forecast to be higher than any

Hauliers suffer three-year low in average profit margins

If approved, laws banning older tyres

could come into force by 2020

five-year period in history – even

though that will include 2019

when demand will be weaker.

The previous record-breaking

five-year period was from 2004

to 2008.

Production of trailers was at

the second highest level on

record in 2018, though well short

of the 2007 figure. The industry is

therefore achieving both high

levels of output and relative

stability in what is traditionally a

volatile sector of the vehicle

market, CLEAR reported.

The trailer parc (fleet size) will

set a new record level every

year to 2023, which serves as

another reason why increased

demand for new trailers is

unlikely in 2019.

10 years and older should not be

used on the front axles of HGVs,

buses and coaches.

A growing body of evidence

includes research, commissioned

by the Department for Transport,

which shows ageing tyres suffer

corrosion which could cause them

to fail (Trucking, issue 428).

The evidence also includes

reports from two fatal crashes –

one involving a coach on the A

in 2012, and another on the M

in 2017, involving a truck.

To take part in the

consultation, head online to

http://bit.ly/Old-tyres-

consultation

ABOVEProfit fall is affecting hauliers across the EU