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Executive Summary

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EXECUTIVE SUMMARY

In 1998, it is estimated that the volume of goods moved by road in the UK reached 160 billion tonne kilometres. This represented an increase of less than 2 percent on the volume of goods moved in 1997, a somewhat lower rate of growth than in previous years and primarily a function of the slowing domestic economy. As a result, trading conditions for the majority of road transport operators -- which were difficult even in times of relative prosperity -- have deteriorated further.
The evolution of road haulage companies into fully-fledged supply chain management service providers, continues to be one of the defining characteristics of the industry. Amongst the more ambitious operators, the emphasis is now on providing a wide range of ancillary services such as warehousing and stock control. With pure trucking activities generally earning low rates of return, the provision of these added-value services allows operators to improve operating margins. The increasing sophistication of the industry also reflects the growing popularity amongst customers of outsourcing distribution operations.
Another key feature of the industry is the increasing importance of technological change. Developments such as electronic data interchange (EDI), which allows the tracking of consignments through the supply chain, are now becoming relatively commonplace within the industry. Of particular significance, however, is the fact that technological advances are leading to greater differentiation amongst service providers. Inevitably, this tends to favour larger companies, which are both willing and more financially able to make the requisite capital investment.
With congestion on the UK's roads becoming a subject of increasing public concern, the attitude of the Labour Government to transport matters remains high on the industry's agenda. Issues such as higher levels of fuel duty and the threatened introduction of some form of `congestion charging' have put the industry very much on the defensive at present. Against this background, a resurgence in the popularity of rail freight would seem probable. However, with technical difficulties continuing and customers sceptical, the much-vaunted recovery of the rail freight sector remains largely illusory.
The immediate trading outlook for road haulage operators is difficult. Its prospects are tied closely to the domestic economy and, with gross domestic product (GDP) growth slowing, activity in the industry is likely to be depressed. Problems are likely to be exacerbated by competitive pressures in the food retailing and car manufacturing sectors, both of which are major end-use customers. In the home removals sector, the slowdown in the property market will keep business levels low. Against this background, margin pressure in the industry will remain intense, fostering corporate activity and higher industry concentration.

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TABLE OF CONTENTS

Executive Summary

Market Definition

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: Freight Transported by Mode (billion tonne kilometres, million tonnes and percent), 1993-1998

Table 2: Freight Transport by Goods Vehicles Over 3.5 Tonnes by Mode of Working (million tonne kilometres), 1993-1998

Table 3: Number of Licensed Goods Vehicles Over 3.5 Tonnes (000), 1988-1998

Table 4: Freight Transport by Length of Haul by Goods Vehicles Over 3.5 Tonnes (million tonnes, billion tonnes kilometres, kilometres and percent), 1993-1998

Market Size

THE TOTAL MARKET

THE INTERNATIONAL MARKET

Table 5: Freight Transported by Road (billion tonne kilometres), 1993-1998

Table 6: Freight Transport by Commodity (billion tonne kilometres), 1994-1998

Table 7: International Road Haulage as a Share of Total Freight Market (billion tonne kilometres and percent), 1993-1997

Table 8: International Road Haulage by UK-Registered Vehicles Over 3.5 Tonnes by Outward Journey (000 tonnes, million tonne kilometres and percent), 1997

Table 9: International Road Haulage by UK-Registered Vehicles Over 3.5 Tonnes by Inward Journey (000 tonnes, million tonne kilometres and percent), 1997

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION/FRAGMENTATION

EMPLOYMENT

TRADE ASSOCIATIONS

Table 10: Number of Transport and Distribution Businesses by Size of Turnover (£000), 1998

Table 11: Employment in Transport and Related Industries in the UK (000), March 1994-1998

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS AND THEIR BRANDS

Table 12: The UK's 15 Largest Distribution Companies by Turnover (£m), 1997/1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CUSTOMER PROFILE

Outside Suppliers to the Industry

INTRODUCTION

THE VEHICLE MANUFACTURING INDUSTRY

WAREHOUSING

INFORMATION TECHNOLOGY

Current Issues

FUEL DUTY

WORKING TIME DIRECTIVE

CONGESTION AND ROAD CHARGING

PAN-EUROPEAN HAULIERS

OTHER COMPANY NEWS

Table 13: Local Authority Capital Expenditure on Roads (£m), 1993/1994-1997/1998

Forecasts

FUTURE PROSPECTS

FORECASTS 1999 TO 2003

GROWTH OF RAILFREIGHT

ENVIRONMENTAL CONCERNS

Table 14: Market Forecasts by Volume for Road Haulage by Vehicles Over 3.5 Tonnes (billion tonne kilometres), 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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Last updated by Jacob van Eldik 24th January 2000