Over 85% of the UK?s trucking industry leaders believe that current fuel prices are placing their business at risk, according to an international survey of 1,200 trucking industry leaders in the UK, France, US and Canada. The survey, commissioned by GE Capital Solutions – a leading global provider of financing for the commercial trucking industry – also revealed a serious driver shortage in the UK. Half of all UK trucking business leaders state a low availability of drivers, which could impact usual delivery times of goods by over 20%.
?Despite the fact that demand and volumes are growing, with 40% of UK transport businesses seeking new trucks over the next year, external factors are placing real pressure on business performance,? said Sarah Sheppard, a UK Commercial Leader at GE Capital Solutions. ?The trucking industry accounts for over 1.8 billion tonnes of total goods moved on the road in the UK1 and the total market is worth around ?5 billion in equipment sales so is of critical importance to the UK economy. We would urge business leaders to scrutinise their financial operations to ensure that they have the best structures in place to combat these market threats and take advantage of existing growth opportunities.?
Fuel price impact and alternative fuel use
The impact of fuel prices appears to be affecting the UK more severely than other markets such as USA, France and Canada, according to the survey:
85% of UK leaders believe that fuel price is putting their business at risk, only 70% of international trucking business leaders feel the same way
92% of the UK respondents thought that fuel price is likely to increase over the next year.
While fuel prices have eased recently, there is still a need to thwart the impact of rising fuel prices, which already account for more than a third (36%) of UK trucking industry costs. However, the survey shows only eight percent are currently using alternative fuels, compared with 12% in the US ? although only 2% use alternative fuels in the French trucking industry. However, the appetite for alternative fuel use in the trucking industry is strong ? half of all UK businesses would now consider its use. The US was most likely to be receptive to the idea of using alternative fuels (65 percent), while Canadian executives are the least likely (45 percent) to adopt such methods.
1 ? Source: Office of National Statistics
Seven out of ten UK trucking businesses stated that they are looking to offset current and future fuel expenses, however only three in ten (29%) have been able to pass on these costs over the past two years.
Driver shortage putting pressure on delivery times
Trucking industry leaders in the UK are also struggling to keep up with demand for drivers. A fifth (21%) of businesses believed the shortage would impact their ability to deliver goods on time to existing customers. As a result, companies are aggressively seeking ways for attracting and retaining drivers:
More paid leave was cited as the number one recruiting and retention method across the US (49%), Canada (48%) and the UK (41%)
Decision makers in the UK also thought that reducing paperwork (36%) and improving cab facilities (31%) would help retain drivers
Over a quarter of the UK industry felt that better roadside services (28%) and higher quality of trucks (27%) would also help attract and retain drivers.
?With companies in the UK looking to acquire more new trucks for their fleet over the course of 2007, the new cab facilities and quality of trucks will hopefully alleviate some of the driver shortage issues and help retain and attract new drivers into the industry,? Sarah Sheppard continued.
Identifying additional cost savings
Trucking leaders cited maintenance and insurance costs as the best areas for cost savings. Reducing hefty maintenance fees and improving cash flow are driving decisions to lease versus owning trucks. Nearly half of international businesses claim new trucks could greatly reduce business costs and save management time. In fact, 54 percent of international truck businesses intend to acquire new trucks in the next year.