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The UK Haulage Resilience Report

#industry research

With various new challenges surfacing over the past year, how is the haulage industry staying resilient?

Logistics is one of the UK’s biggest industries, contributing £139 billion gross value added (GVA) to the UK economy1.

In 2021, we surveyed UK haulage companies on the challenges and opportunities of a post-Brexit haulage industry. In only a year since then, we’ve witnessed ongoing HGV driver shortages, new Covid-19 variants, runaway inflation and the Russia-Ukraine war.

All this, combined with the lasting effects of Brexit, has created new challenges for the haulage industry and the sectors that rely upon it.

As the UK’s leading freight exchange platform, we wanted to gain deeper insight into how the industry is battling through the issues it faces. We surveyed employees from 15 of the UK’s top haulage companies, who also operate in the EU. They cited Brexit impacts and other challenges – and outlined some of the solutions being applied.

Key findings

Staying resilient in the face of an economic downturn

To do business and thrive in an environment like the current one, it’s vital that haulage companies are able to adapt. Once again, haulage businesses are showing they have what it takes.

Two in five (40%) of the companies we surveyed are proactively adapting business models so that they can prosper. Almost half (47%) will streamline profit margins to battle through tougher economic times.

One in three (33%) are considering expanded operations in UK markets post-Brexit, while a fifth (20%) are already conducting more work in their local area. UK haulage companies are seeing more opportunity in the UK, shifting focus from international to less complicated domestic logistics.

As a result of the actions they’re taking, almost 9 in 10 (87%) of the haulage companies we asked believe in their ongoing commercial viability: after a challenging year, haulage companies may be becoming more confident in their ability to adapt and survive.

What are the biggest challenges in 2022 and 2023?

With numerous outside pressures building on the industry, we asked hauliers what they see posing the greatest risk to UK haulage companies this year and next year.

Twice as many companies cited increased operating costs as any other factor – only a fifth (20%) of businesses did not name costs as a significant issue. With a recession predicted for the UK, the focus is already falling squarely on reducing costs.

Though rising costs of operating is cited as the most prevalent challenge for the industry, haulage companies are still feeling lingering effects of Brexit – 27% are finding post-Brexit border check delays on EU food and farming imports a challenge.

What effects are hauliers currently experiencing?

Unsurprisingly, almost three-quarters (73%) of hauliers surveyed pointed to fuel prices impacting operations and profits – although prices are now coming down.

27% of companies say they are still being affected by increased waiting times at UK/EU border points, while a fifth (20%) of companies identified this as having a negative impact on operations and profits – more than 18 months after the end of the Brexit transition period. This does show an improvement compared with the 6 month mark after the Brexit transition, when 81% were being impacted by increased border waiting times.

As UK-EU relations become normalised, such issues might be less keenly felt, but hauliers are already adapting by focusing more on UK markets.

How are hauliers confronting industry challenges?

Faced with multiple and wide-ranging issues, haulage companies are seizing the opportunity to become more efficient and evolve with the changing business environment. 

A fifth (20%) have increased wages to attract and retain staff, which is clearly a direct response to the driver shortage. In Q4 2021, the number of HGV drivers in employment had fallen by 49,000 from Q4 2019, to 265,000, making the workforce 15.6% smaller than it was before the start of the pandemic2.

Companies are stepping up, but some pressure is still being felt by staff. Six months after the Brexit transition, 50% of respondents identified increased stress, anxiety and other mental health issues among staff.  And 18 month after the Brexit transition, this has decreased only slightly, with 47% of companies still experiencing similar impacts.

Although hauliers must also tackle problems like these, raising pay is addressing one of the key grievances drivers had. And as well as lifting pay levels, companies have sought greater efficiency through updated systems, with 20% increasing their use of digital technology. While a third are seeking to enhance their bottom lines by passing rising costs onto clients.

The survey results highlight that haulage businesses have various levers they can pull to overcome obstacles – and are proactively doing so.

An industry committed to sustainability

Despite strains on the industry and 93% of companies still being affected by Brexit,  73% of haulage companies remain committed to their focus on environmental/green targets. These objectives remain a priority for the industry, especially with the government’s ‘greenprint’ to decarbonise all modes of domestic transport, including trucks, by 2050.

Some 13% of companies felt that Brexit actually drove them to increase their focus on adapting to environmental/green tech and infrastructure. Green tech is a sector where the UK has always been a leader, and the transport industry now seems intent on capitalising on this existing expertise.

The Logistics Report 2022 (by Logistics UK) also states that decarbonisation progress and the use of new/alternative fuels were both up as of 1 January 2022, when compared with the past two years.

A positive outlook ahead for haulage 

While there are various pressures on the haulage industry, companies and the sector itself are taking action. To address driver shortages, for instance, even the government became involved, such is the importance of the industry.

There is now funding in place to help train new HGV drivers and, in August, it was confirmed that AEB funding for HGV driver training would be extended for a further year3. Also, between 1 January 2022 and 31 March 2022, the DVSA carried out 74% more lorry driving tests, when compared to pre-pandemic levels4. 

While government measures to tackle the driver shortage and other issues are very welcome, it’s clear that longer term planning is also needed and lines of communication between government and the industry must stay open. If all parties involved can continue to work together, haulage can keep moving throughout the uncertain times ahead.

Azad Awan, Sales Manager at Haulage Exchange, says:

“There’s no doubt that the haulage industry has experienced quite a few challenges in the past year – and will face more obstacles in the coming months. But the industry has dealt with everything thrown at it, and will continue to do so. It’s proved itself to be more than resilient.

“This survey highlights how hauliers are looking ahead and already planning how to mitigate potential problems. It’s only natural that when margins are tight and efficiency is called for, businesses turn to technology to provide answers.

“That’s what we’re all about: helping companies do business smoothly and giving them space to grow. If more companies can build time-saving digital solutions into their everyday routines, it will only benefit the industry as a whole.”

References

  1. The Logistics Report Summary 2022, p.5, Logistics UK
  2. The Logistics Report Summary 2022, p.9, Logistics UK
  3. https://www.gov.uk/government/publications/adult-education-budget-aeb-funding-rules-2022-to-2023/adult-education-budget-aeb-funding-rules-2022-to-2023#heavy-goods-vehicle-hgv-driver-training 
  4. https://www.gov.uk/government/news/huge-increase-in-lorry-driving-tests-following-government-action 

In 2022 there will be two lots of changes to road haulage through the EU member states for UK-based hauliers which could affect your business.

The dates for your diary are February 2 and May 21.

Postings Declarations

From February 2, UK operators of HGVs, vans of any size, or cars with trailers traveling within the EU member states, Norway, Iceland and Liechtenstein for commercial purposes will need to register the journey on an online government website.

The information required to register the journey is:

These Postings Declarations are required for any commercial journey between two points within this area. These journeys can include:

Drivers must also ensure they are carrying certain documents in case the EU authorities should ask for them. These include:

Failure to show these documents could end up with a penalty.

Standard International Goods Vehicle Operator Licence

From May 21 UK-based operators who use vans with an authorised mass between 2.5-3.5 tonnes, and cars or vans with trailers amounting to the same weight will now require a standard international goods vehicle operator licence to transport goods for commercial purposes.

This will be applicable to journeys within EU member states, as well as Norway, Iceland, Liechtenstein and Switzerland.

Current operator licence holders can add these vehicles to their current licences. To do this is free if you haven’t already reached your vehicle limit. It will cost £257 to increase the number of vehicles on your licence if the limit is exceeded.

To apply for a new licence will cost £257 and if successful the licence will be a further £401. Then there is a continuation fee every five years of £401 to keep the licence active.

This does not apply to you if you only use your vehicles within the UK or you are transporting for non-commercial purposes.

Drivers will need to carry a copy of the UK Licence for the Community with them on international journeys.

Penalties

There will be legal penalties for UK-based drivers not registering their journeys or for not having the correct operator licence. These could include withdrawing the Community Licence or being issued with a fine.

Next Steps

As the first deadline of February 2nd has already passed, you can check the government website to keep abreast of any changes.

With surging demand for UK haulage in 2021, what industry-specific challenges are being faced by haulage companies?

As we move deeper into 2021 and further away from the 1 January 2021 Brexit transition date, it’s time to assess the current state of the haulage industry. It’s clear that there is an unprecedented need for haulage – caused partly by the pandemic-fuelled rise in internet shopping – with demand in April 2021 120% stronger than in April 2019. 

In the three months from March to May 2021, the uplift in demand for haulage was more than twice what it was for the same period in 2019.

As the UK’s leading haulage return loads platform, we can provide unique, month-on-month insights into load transfer demand, from hauliers up and down the country. With the industry thriving thanks to increased demand and continuing to successfully adapt to ongoing changes, we spoke to those on the front lines of the industry – to explore upcoming challenges and hear their predictions for the future. We surveyed employees from 16 of the UK’s top haulage companies that operate in the UK and Europe, with fascinating results.

demand growth in the UK haulage industry

Key findings:

How are haulage companies adapting to higher demand and Brexit impacts?

Only now are we starting to see a true picture of how Brexit will affect cross-border haulage with the EU. Although full border inspections won’t begin until 1 January 2022, companies continue to adapt to new regulations and prepare for the new-look landscape.

Just as many – both in and outside the industry – predicted, most (81%) haulage companies have faced longer waiting times at the border. Allied to this, 69% have found themselves spending more time on paperwork related to border crossings. Unsurprisingly, many companies have explored alternative routes into the EU, but half of the firms we surveyed say they’ve experienced longer journey times on these routes.                                

Some 56% of hauliers say business has been affected by fewer exports going to the EU, while half say their operations have been impacted by fewer imports coming in. Despite this, demand has not only proved robust, but has increased dramatically.

When asked what challenges Brexit was posing for the industry, 6% of companies say they haven’t seen any impact on their business since Brexit came into force on 1 January 2021.

Changes impacting company operations 2021

By comparing the results of this latest 2021 Post-Brexit Hauliers Survey to the UK Hauliers Brexit Transition Deadline Survey we commissioned just before 1 Jan 2021, we can see that hauliers have a solid understanding of Brexit, their industry and upcoming issues. They are facing unique challenges, but strong growth will help haulage companies to meet them head on. 

Increased waiting times at the border, for example, have affected 6% more respondents than thought they would be impacted. More time doing admin to cross the border was another factor for many companies, with 3% more respondents experiencing this than the 66% who expected it back in December 2020.

Some anticipated issues haven’t materialised for many companies though. Higher tariffs imposed on goods have affected 31% of respondents, but 50% of companies had been expecting those: a drop of 19% in reality versus expectation.

Fewer hauliers have also experienced changing licencing and registration requirements than thought they would. There’s a 29% difference between the amount of respondents expecting that issue and those actually dealing with it after Brexit.

Even at this early stage, it’s clear that Brexit has had a profound effect on the UK’s haulage industry. When we asked hauliers just how Brexit has affected them, 69% said it has caused them to lose business, while 19% are no longer working with EU companies. In addition, a quarter (25%) feel unable to plan properly due to ongoing uncertainty.

What are the wider impacts of Brexit on haulage companies?

One underreported aspect of Brexit’s effect on hauliers is the impact of the transition itself: on people, companies and society. 

An increase in stress, anxiety and other mental health issues were highlighted by 50% of respondents to our survey. Related to this, 13% say staff are working longer hours, while 6% say employees aren’t taking their full annual leave allowance.

Our study also uncovered a reduced focus on environmental targets, with a quarter (25%) of respondents noticing this at their company.

impacts of Brexit on logistic companies

How are haulage companies reacting to changes?

With the haulage industry at the very forefront of Brexit-induced changes, haulage companies have quickly realised the need to adapt the way they work. Representing a potentially seismic shift, our study found that 56% of haulage companies have moved some operations to the EU, or would consider it in the future.

Rising haulage costs will be felt by UK businesses in various industries, with 69% of haulage firms in our survey having already increased costs. The remaining 31% say costs will be rising next year or in the near future.

How have Brexit changes impacted different businesses and industries?

As UK lockdown restrictions ease, many sectors are only just beginning to face staff shortages, but in the haulage industry, demand for drivers has been outstripping supply for some time. According to our data, one in every 8 haulage companies identify skilled driver shortage as a significant risk to the industry in 2021. Research has suggested that as many as 12,000-15,000 have left to find work elsewhere.

The knock-on effect of this driver shortage is that some industries have been unable to find enough hauliers to transport their products. Certain products are also subject to increased checks and admin, creating additional barriers for haulage companies’ transporting such goods.

Almost a third (31%) of respondents to our survey say they would avoid working with food & drinks industry clients due to border and Brexit issues. Other sectors they are reluctant to work with include livestock farming (25%), agricultural farming (25%), gardening supplies (19%) and retail (13%). 

avoiding industries due to Brexit issues

Our study highlights how small businesses are being affected by Brexit’s haulage impact. Some 63% of haulage companies say they do less business going from the UK to the EU with SME companies (with under 100 employees). Going from the EU to the UK, 56% of hauliers say they do less business with SMEs in that direction.

Contrast that with the figures for multinationals (with more than 1,000+ employees): 38% of hauliers do less business exporting from the UK and 25% less business importing into the UK.

What does the future look like for UK hauliers?

We asked hauliers if they believe that it’s sustainable to continue operating with the current Brexit changes to border regulations. Almost a third (31%) say they’re adapting their business model to survive.

With full border checks on EU goods entering the UK on the horizon, we asked hauliers how they’re preparing for this next change and what factors they think will have the biggest impact.

the greaest risks to haulage companies in 2021

According to hauliers themselves then, bureaucracy is the biggest threat to the industry, followed by rising operating costs and COVID-19. Many are also thinking about competition coming from the EU.

Looking ahead to the start of next year, we asked UK hauliers if they foresee further issues when full customs controls on imports come into force.

Negative impacts of full custom border checks

Lyall Cresswell, Founder and CEO at Haulage Exchange, says:

“It’s encouraging that demand for haulage is stronger than ever, and how well companies have adapted to big changes shows the resilience of our industry. We know more changes are coming, but this is an industry used to adapting and has proved extraordinarily successful in dealing with the unexpected.

“It’s clear that haulage companies will have to continue to be flexible, especially with further Brexit changes around the corner, but this is where platforms like ours can help. Our network helps companies to avoid dead mileage or fleets sitting idle. Instead, they can take advantage of the surging demand.

“Companies can use that demand to overcome the challenges ahead and I’m positive about the future of the industry. The issues identified in our survey need to be addressed quickly and decisively. If that happens, I’m confident that the industry will continue to thrive.” 

What new measures are the government proposing to help haulage companies?

On the 20th July 2021, the government announced a series of proposed measures in an attempt to resolve the shortage of haulage drivers. It was stated that they will work to encourage more people into the sector, along with improving the working conditions of current haulage drivers. The proposed measures include:

With days to go until the deadline, how many haulage companies are ready for the transition date on 31st December and what does the industry still need to do? As the UK’s premium freight exchange platform, we thought we would find out.

We asked the owners of 32 exporting UK haulage companies for insights into how Brexit has affected – and will affect – their businesses, and what they need in order to be sufficiently prepared for the changes.

The EU and UK’s haulage industries are deeply connected. With nearly 1 in 4 UK hauliers having already lost business due to Brexit, professionals from across the industry reveal whether they are prepared for what’s next.

Key findings:

Which changes will have the biggest impact from 1st January 2021?

Talk of delays and tailbacks at the border has dominated news coverage of Brexit negotiations for several years, and it seems people working in the logistics industry share exactly the same concerns. Increased waiting times at the border (75%) and more time spent on pre-crossing admin (66%) are the changes that most people expect to have an impact day-to-day.

Half of respondents expect to be impacted the most by higher tariffs imposed on goods, while just 6% do not believe that they will be impacted by Brexit at all.

Will customs changes still affect businesses after the transition period?

Customs remains a huge sticking point for most people in the industry. A significant majority (72%) of haulage companies believe that they will be negatively impacted by customs changes following the end of the transition period.

62% feel that they need to be more prepared for changes to customs checks when exporting and importing goods to and from the EU, and of these, 28% are ‘not at all’ prepared.

How prepared are businesses for customs changes?

Uncertainty across haulage businesses continues to be a problem as the end of the transition period approaches – just 12% of respondents are sufficiently prepared, thanks to 9% of these having invested heavily to make sure they understand the customs changes.

When it comes to completing Safety and Security Declarations, only 13% of haulage respondents have trained their hauliers and couriers to fill them in themselves. Another 13% will have staff filling them in on behalf of hauliers, and 9% have implemented software which can fill them in automatically.

What do companies want ahead of the deadline date?

Clear guidance is by far the biggest thing missing from the Brexit transition process where most hauliers are concerned. 84% want more clarity on changes to border legislation, while almost half (47%) want more time to get the necessary admin done.

Perhaps the biggest indication of all as to where things stand, with just days to go before the transition period ends, is the fact that only 3% of hauliers surveyed believe they are totally prepared and don’t need anything.

Additional findings: Have opinions towards Brexit changed since the 2016 referendum vote?

The years between the 2016 vote and the day of departing the EU has allowed for many to reflect on whether their opinions have changed. A significant proportion of hauliers would stick to their decision to remain – 1 in 3 hauliers say they voted remain and would do so again. Despite concerns about the transition being held by the majority of hauliers, 16% say they voted leave and would vote leave again.

Additional findings: What changes for logistics businesses have been caused by Brexit?

It is clear that Brexit has made an impact on logistics businesses, with around 1 in 5 hauliers stating that they have lost business, and 15% say they have had to make redundancies. 9% of hauliers have increased their staff numbers, whilst 15% have seen an increase in demand.

Sam Wilkinson, Chief Revenue Officer at Transport Exchange Group, says:

“With the upcoming Brexit transition deadline, our focus is to ensure users of our market-leading Freight Exchange platforms, Courier Exchange and Haulage Exchange, can continue to carry goods to and from the EU without disruption.

According to our survey, delays at ports and paperwork are front of mind for carriers. To ensure they can be prepared and avoid delays we are working with industry experts to provide educational content that will be signposted directly from within our platform. 

Post-transition period, freight will continue to move and Transport Exchange Group will continue to lead the way for UK Freight Exchange platforms.”

The latest producer to start testing electric haulage vehicles is MAN. They have sent a shiny fleet of fully electric-powered HGVs out into the world this month and are waiting to discover their customer’s opinions after they try out the new models.

Trials Begin for Electric HGVs

The last couple of years have seen a lot of talk about the potential of electric vehicles to replace those powered by fossil fuels. There is no doubt that these modern trucks will be better for the environment, a key consideration in this day and age. However, many people are – perhaps righty – cynical about whether the technology in these new drives is good enough. In other words, can they really compete?

MAN is the latest producer to start seriously testing the capacity of alternative-fuel vehicles on the roads. By getting companies to carry out their day-to-day delivery contracts using these vehicles, MAN will determine whether the new drives are ready to hit the market.

Who is MAN?

If you’re not familiar with the company, MAN is a supplier of commercial trucks and vans, operating internationally. They have a huge range on offer for customers already, and this move into more eco-focused products is in response to the needs of the logistics industry.

Using alternative fuel vans and trucks to fulfil delivery contracts solves a lot of problems with regards to lowering emissions and reducing fuel consumption. Governments across Europe are encouraging haulage companies to address environmental issues and MAN’s trucks could be a solution.

Who is Trialling the Trucks?

At the handover a few weeks ago, MAN’s HGVs were given to Spar, Quehenberger Logistics and Hofter (Aldi in Austria). A tractor was given to Magna Steyr, the plant equipment haulier. There are only nine eTGMs and each will be thoroughly tested.

Getting Technical

Each MAN has an electric motor in the centre of the frame and lithium-ion batteries below the cab. There are 6×2 and 4×2 configurations available, including reefer and swap bodies. The larger 6×2, 26-tonne model has twelve batteries and can run to 120 miles per charge. The smaller 4×2 model has just eight batteries and a lower range of eighty miles.

It remains to be seen whether these fully-electric MANs will be a satisfactory replacement for ordinary trucks. Either way, it looks like we are getting closer to electric trucks being the norm on the motorways of the UK. In the meantime, our Freight Exchange platform can help you subcontract loads, increasing your profit, growing your company and maybe helping you save up for an electric HGV.

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