Neat summary of the economic state of the industry

UK PROFESSIONAL DRIVERS FORUMS
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Full article (link below) needs a login, but the first few lines tell you as much as you need to know:

Half of all haulage companies that were set up since 2019 have now entered insolvency proceedings or closed down, according to analysis of official figures.

They showed that 49.2% of new road freight companies have closed, with approximately 62,234 out of 125,801 firms having ceased trading.

The department for business and trade said 494 hauliers entered insolvency in 2023 and it estimated 33% of businesses in the sector are deemed maximum risk, up from 22% the year before.

The latest analysis of data from Companies House [ ] showed that companies handling the transport of cargo are the most difficult to run, with a business mortality rate of 54.4%.

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I dont need to tell you of all people that this has always been a cut throat business with too much competition.

That competition is ruthless, and where the ā€˜cut throatā€™ aspect comes in.
Hauliers cutting each otherā€™s throats when trying to win jobs and contracts from each other, then their own throats when struggling to make a profit from the already crap rates they have cut to get said jobā€¦and so it goes on.

Left to deal with part of the outcome are the drivers working for a poor rate of pay.

Then, again as you already know, there are the financial and regulatory hurdles hauliers have to jump to both get in the job, and keep trading within it.

I can never understand how some are still thinking that getting into this game with their own motor, to compete with these sharks, is a good idea, maybe they are actually a high proportion of the failed businesses, those that bit off more than they could chew.

On the other hand if some or any of these firms were cowboy outfits running bent, then in this day and age they deserve itā€¦getting rid of a few ruthless and poor firms who have no regard for the law, not to mention for their drivers is no bad thing.
Road Transport and Haulageā€¦Not a lucrative buisness to get into, except for maybe a few established companies who have a lot of the job sewn up.

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Yes, part of why I posted the article was to direct those who post ā€œIā€™m thinking of going it aloneā€¦ā€ to it, so they can see the reality theyā€™re up against.
And also agree on the cowboys too - ā€œgood riddance to bad rubbishā€

But also within these stats are a decent number of ā€œproper companiesā€, who, though trying to do a decent job, have been beaten down by harsh economic realities.

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In 2023 HGVs did about the same vehicle miles as in 2016. It rose after that date, and then fell in 2020, rose up to 2022, but fell again.

Some of that might be due to more efficiency, and/or less goods being moved, and there are reasons for both,
but,
there is not an expanding market, and hence no need for new players in the road transport game.

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Again, agreed. Again, this needs to be told to the would-be ā€œgo it alone-ersā€

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As with anything there will be a few exceptions, and those exceptions will make YouTubes and get other publicity.
Those YTs where someone buys a truck, and works about 2 days a month are not the real world! They might make some money, but it isnā€™t from transport.

Most of those who fail will not be shouting so loudly.

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I think with a lot of them itā€™s the concept over the actual reality.
They prioritise on realising their dream of seeing themselves posing about in an all singing, all dancing, top range blinged up truck with their name emblazoned on it.

They put themselves in a hell of a lot of debt to get it, and end up pulling trailers for some half arsed stress inducing tipper outfit or something, for average or poor rates, rather than sit down and do their prior homework to get decent work, and buy a more realistic truck to make a go of a business.
Then after a few months reality,.and the effects of that reality kick inā€¦then they realise that they were actually better off as an employed driver.

8

Maybe listened to the advice to just get a loan, if they can find one, or use a credit card to meet the O licence financial standing requirement when they started up.
Cut throat rates but the same fuel, maintenance, purchase and depreciation costs for all.
What could possibly go wrong.

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Ahā€¦ that golden oldie: As I believe Iā€™ve said before, using a personal credit card to meet the FS requirements for a one or two vehicle Owner-Driver set up, does not actually cost anything, you simply have the clear balance available to satisfy the requirement.

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My old boss around 20 years ago, said that he made more money for himself just him and one vehicle then than running more vehicles and employing people.

He was adamant as a solo gig it was doable to have a decent income for yourself but not scaling it with more vehicles and employees.

He did sell his business eventually even though he never had an reason contracts with any companies, just all as hoc word of mouth work, unless things changed in later years after I left working for him. I donā€™t know what he sold the business for but it is still going in name currently.

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Great unless and until you have to draw on it then the excrement hits the fan.Its supposed to be a financial reserve not a debt.

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You draw on it and then replace it, preferably within 28 days.

You cannot run a haulage operation without FS, and if the idea of debt is terrifying, you shouldnā€™t be trying to run a haulage operation, for all of the reasons shown above, and all the reasons described by the guy from Whiteā€™s Transport that I posted in another thread.

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Might have worked 20 years ago, but not these days. I have a client who has just had a major problem (involving the authorities) because of having only a verbal, informal contract with another party.You canā€™t run these days with an old-fashioned notion of ā€œtrustā€ and not end up with the dirty end of the stick.

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Yep that was same with me when I was an owner driverā€¦but that was more years ago than I care to admitā€¦or accept, that I am old enoughā€¦Iā€™m still 30 in my head.
:joy:
I was fine initially as an owner driver, well at least after first 9 or so months when I kicked into touch pulling trailers for another haulier when I got my own direct work from a manufacturing co.
Then I decidedā€¦Buy another motor, make 2x as muchā€¦wrong!
I made the same mistake, again and again to about 6 motors, (stupidly :roll_eyes:) but tbf I was in my very early 20s with the combo of naivety, fearlessness 'optimism, and arrogance that age brings.

I lasted about 10 years in total in 2 buisnesses.
The first one about 9, till the sh hit the fan and the manufacturing co went bang, taking me with themā€¦
But I still continued to look after my drivers by making it a priority to bale them out, beforehandā€¦which I am proud of.:sunglasses:

I salvaged one truck (probably illegally) in my wifes name, and drove it.
Soon after that, and after a series of events after my old bank went digging, and noticed my wife had signed something or another, in my old buisness name, they and others came at me through her, saying it was the same coā€¦or events to that effect .and we lost everything.

A mate of mine was in the same boat, he was more streetwise than me though ,.and better at ducking and diving :grin:, it happened at least 3 or 4 x to him,.and he still kept bouncing back,ā€¦ in fact he only stopped trading a few years ago.:joy:

But I just saidā€¦ Nah ā– ā– ā– ā–  this, Iā€™ve had my fill.

If things had continued as at first, doing very well, ā€¦where I got a brand new house in a very select area, an XJS Jag (the dogā€™s at that time btw) and 2 hols abroad every year, I too would/could have been like your old boss.
I certainly would not be doing what I am now.

But hey not a single regret, (I thinkšŸ˜‚)
At least I had the balls as a young lad to ā€˜have a goā€™, (more than some had who were actually glad to see me on my arse)
It was not easy at first after it failed, but at least my second to none and lovely Mrs stood by me.
Upshot is, as the circumstances are today in the job, and how it has turned out, if I was in my 20s today, I would not even want to be a driver, let alone an owner driver.

ā€˜(The memoirs of Robā€™ :roll_eyes::joy:)

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To be fair he didnā€™t live the lavish lifestyle that people assume all company owners do.

He had an F reg Merc motorhomes then an iveco motorhome he had built when his other one got stolen.

He drove a P reg Volvo estate that had 200 to 300k miles on it when I worked for him. He finally bought a new car a Kia Sedona a few years after. He live in a terraced house in a not so great street.

If he went away it was just him and his wife in the motorhome, they did go to Spain it. And he left me to look after phien and sort the jobs out while he was away but was always at the end of the phone if needed even away on holiday once or twice a year.

One of the best bosses I have ever worked for tbh. He would not expect anyone to do something he wasnā€™t prepared to do it couldnā€™t do.

Iā€™m glad he made some money but he certainly did not live a flash life and have lots of expensive stuff. Well if you discount the hot tub he did have installed in the back garden one year. Probably the most lavish thing I ever saw him spend on.

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Yeah, ok, but that was part of my point.
In those days it was different, I would not say my lifestyle was ā€˜lavishā€™ as such, but I was doing quite well.

I would think nowadays it would be virtually impossible for a young lad with his own motor to get into direct work.
Most is sewn up by the big boys, and the only option is to run for them at a much reduced rate, they will more than likely lead you to believe it is less 10% on their rate, but donā€™t believe it.