Road haulage – in association with HSBC

Road haulage is the movement of goods by road. If this is done for money, it is known as hire or reward; the distribution of a company's goods by its own vehicles is known as own-account work. Road haulage firms vary from owner-drivers to large logistics outfits such as DHL-Exel and Wincanton.

Statutory requirements of road haulage

Any road transport operator must have an operator’s licence which is granted by a Traffic Commissioner. Operators must demonstrate financial security to cover their costs, good maintenance and safety practices and of course have a driver with the requisite licence. Maintenance and road worthiness and compliance with legislation governing road transport such as the Drivers’ Hours Rules and the Working Time Directive are policed by an agency of the Department for Transport called the Vehicle and Operator Services Agency (VOSA). Time driven is measured by a tachograph. Road freight is a highly legislated sector which demands skill, professionalism and close adherence to domestic and European rules.

Trade associations

Road haulage is represented in the UK by the Road Haulage Association as well as the Freight Transport Association which also represents other modes of freight transport.

Challenges facing road haulage

• Road transport is an extremely challenging industry with average profit margins being 3%. Factors which drive down profits are:
• Road congestion which costs UK business approximately £20bn per year.
• The high price of fuel and in particular the high rates of fuel tax levied in the UK. Fuel is 40% of a haulier’s operating costs.
• Overcapacity in the market. The UK market is saturated in particular sectors and this can lead to rate cutting and the acceptance of unprofitable work. This puts pressure on successful hauliers and has plunged the UK road transport market into a period of consolidation where up to 30% of current firms are expected to fail and have either their contracts or their assets assimilated into other firms.
• Foreign competition. Around port areas in particular, road hauliers can lose out to foreign hauliers whose trucks run on much cheaper diesel. The UK has been losing market share in international work for several years.

Specific sectors within road haulage

• Owner-drivers. Many owner-drivers subcontract for large container businesses such as Maritime Transport or quarrying business such as Hanson Construction Projects. Typically these companies pay by the mile or the load, and often lease the vehicles to the drivers. More profitable work is for those owner-drivers who find themselves a local niche which is unsuitable for larger or national firms, such as solid waste removal.
• Container work. These companies service UK ports such as Teesport or Felixstowe, carrying containers for the deep sea shipping companies. Examples are Maritime Transport, Bulmers Logistics or Hanbury Davies.
• Dry bulk – plastics, grain. An example of this work can be found at Mike Beer Transport.
• Agricultural produce and livestock such as Gordon Gilder Transport. For more examples see the Kellysearch directory.
• Hazardous goods and chemicals including oil, including members of the Hazchem Network.
• Distribution – for instance to supermarkets. See Bibby Distribution.
• Home delivery. This has increased with the advent of internet shopping, eg Amazon, eBay and Tesco Online.
• Other sectors include construction, manufacturing, waste collection and removals.

Why does road haulage dominate freight transport?

In 2005 some 148bn tonne-kilometres of freight was moved in the UK and approximately 90% of this was moved by road haulage. Other forms of commercial freight transport are water (sea and canal systems), rail and air. While there is greater emphasis these days on using a variety of modes to give the most cost-effective and environmentally kind journey, there are significant drawbacks with the other modes. Firstly, road is the only one that delivers to door or shop. Secondly, rail would need substantial investment in the network to allow greater freight capacity. While there are some easy and profitable improvements to be made, overall removing 5% of the freight from UK roads would require a doubling of the rail network.

Movements by water are relatively slow and so only suitable for non-perishable loads that are not time-sensitive. Equally air freight is very expensive both financially and in terms of emissions. For these reasons road haulage has remained the chief method of delivery within the UK and underpins the economy. However there are an increasing number of road haulage companies such as Stobart Ltd which integrate all forms of freight transport.

Are trucks bad for the environment?

Modern trucks are extremely clean with emissions regulated by the Euro emissions standards. There are only 430,000 trucks on UK roads but 26 million cars. It is cars that cause congestion and congestion that leads to inefficient running and high emissions levels. Trucks are essential to our economy – without them shops, schools and hospitals would close within two days. The UK truck fleet is the most efficient in Europe.

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