International haulage: UK market share hits all-time low

The Freight Transport Association says that the market share of UK-based carriers hit a new all-time low of just 24.9 per cent in the first quarter of 2007, according to new provisional data from the Department for Transport.

Provisional figures in 'Road Goods Vehicles Travelling to Mainland Europe: Q1 2007' shows the number of UK registered trucks fell to an eighteen month low in the first quarter of 2007, while foreign vehicle numbers rose to an all-time high.

In 1996 UK carriers were regularly achieving a 50 per cent market share of the international road haulage market. This has been steadily eroded by Sterling's persistent strength against the Euro and a consistently higher economic growth rate in the UK than in many West European countries. Since 2004 the competitive position and overall market share of UK carriers has been further weakened by the presence of low-cost operators from the accession states. These carriers benefit from low labour costs, low-taxed diesel and a significant trade flow imbalance in favour of imports from Eastern Europe. The number of hgvs entering Great Britain from the new member states has tripled since the beginning of 2004. These operators currently have a 12 per cent share of the cross-Channel international haulage market, compared to 4 per cent in 2004.

FTA's Chief Economist, Simon Chapman said, 'The Department for Transport's latest figures make for depressing reading for UK hauliers. International haulage has become a business that is right on the margins of profitability for UK-based carriers. The influx of cheap foreign haulage capacity into the UK is also having a destabilising effect on some parts of the domestic haulage market, particularly long-distance trunking journeys which foreign carriers can compete for under cabotage rules.

'A competitive road transport market is good news for business and the economy, as carriers are kept on their toes and are constantly striving for more efficient working practices. However, when competing with foreign operators, UK hauliers face the twin handicaps of sky-high diesel prices compared to continental Europe and meeting tougher safety standards. Tired drivers, overloaded vehicles and sub-standard vehicle maintenance is unacceptable in the UK road transport industry. Foreign carriers and drivers who insist on playing fast and loose with road safety laws in order to reduce their costs further must be rooted out.

'Last week's decision by the European Commission to push ahead with plans for enforcement authorities across the EU to share data on operators' compliance records is good news for the law-abiding majority of operators. However, the 2010 introduction date is a long way off. The Department for Transport must therefore make early progress in developing a database to target foreign carriers in the UK which regularly flout the law. This was a key output from the joint Government/Haulage Industry Task Group which met last year.

'Intelligence led targeting must also be backed up by effective sanctions. Enforceable fines and penalties need to hit rogue foreign hauliers where it hurts - in their pockets.'