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Crunch Time for Ireland's Hauliers
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A luke-warm economy and rising operating costs are contributing to a grim outlook for the Irish road transport industry in 2008, with 82 per cent of fleet operators having little or no confidence that they will meet their revenue and profit targets for the year ahead.
These stark findings were revealed as part of the joint Fleet Transport and Michelin ‘Transport Barometer’ – a monthly survey undertaken with top owners and managers in the road transport industry.
A cooling housing market and consumer caution are potential drivers of modest slower economic growth in 2008, having a knock-on effect on the road transport industry. From January – December 2007, 31 per cent of those questioned saw turnover decrease by between one and 10 per cent, whilst for 26 per cent it remained the same.
Jarlath Sweeney, Fleet Transport’s Editor says: “The last year has been one of the hardest the industry has had to endure. Labour costs rose, the price of diesel fluctuated and many operators have found it difficult to compete in the marketplace against overseas operators and larger companies.”
Almost half of those surveyed (48 per cent) reported an average trading year in 2007, yet 56 per cent experienced growth in volumes of goods transported. The overall industry picture shows that volumes will grow by about 10 per cent, but rates are being slashed as large hauliers cut costs in an attempt to grow market share.
Jarlath adds: “There are operators hanging up their keys because customers are telling them to reduce rates and run their business at a loss. Under-pricing, dwindling profits and overall costs rising pose serious threats to the industry in the months ahead.”
With little room for margin growth, 63 per cent of those surveyed predict their rates will remain static during the next 12 months as the industry looks to preserve existing custom rather than prospect new business.
“The road transport industry needs to be more prepared than ever for the changing cost of diesel and the risk of some contracts going elsewhere, operators need to stand their ground and if necessary look at other areas within the industry,” concludes Jarlath.
Front line managers currently list the top four issues affecting their industry as being unprofitable rates (58 per cent), rising fuel costs (49 per cent), increases in operating costs (44 per cent) and tolls (32 per cent).
The full results are available in the February edition of Fleet Transport, which was published on 01.02. 2008.
A cooling housing market and consumer caution are potential drivers of modest slower economic growth in 2008, having a knock-on effect on the road transport industry. From January – December 2007, 31 per cent of those questioned saw turnover decrease by between one and 10 per cent, whilst for 26 per cent it remained the same.
Jarlath Sweeney, Fleet Transport’s Editor says: “The last year has been one of the hardest the industry has had to endure. Labour costs rose, the price of diesel fluctuated and many operators have found it difficult to compete in the marketplace against overseas operators and larger companies.”
Almost half of those surveyed (48 per cent) reported an average trading year in 2007, yet 56 per cent experienced growth in volumes of goods transported. The overall industry picture shows that volumes will grow by about 10 per cent, but rates are being slashed as large hauliers cut costs in an attempt to grow market share.
Jarlath adds: “There are operators hanging up their keys because customers are telling them to reduce rates and run their business at a loss. Under-pricing, dwindling profits and overall costs rising pose serious threats to the industry in the months ahead.”
With little room for margin growth, 63 per cent of those surveyed predict their rates will remain static during the next 12 months as the industry looks to preserve existing custom rather than prospect new business.
“The road transport industry needs to be more prepared than ever for the changing cost of diesel and the risk of some contracts going elsewhere, operators need to stand their ground and if necessary look at other areas within the industry,” concludes Jarlath.
Front line managers currently list the top four issues affecting their industry as being unprofitable rates (58 per cent), rising fuel costs (49 per cent), increases in operating costs (44 per cent) and tolls (32 per cent).
The full results are available in the February edition of Fleet Transport, which was published on 01.02. 2008.
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