The haulage industry faces a crisis as Covid exposed critical weaknesses, leading to significant business collapses.
- Graham Lackey of Brit European believes government support delayed necessary restructuring in the sector.
- Leveraged business models and unsustainable lending practices have contributed to a rise in insolvencies.
- The shift to electric fleets poses commercial challenges, despite investments in carbon neutrality.
- Sector recovery is hindered by economic uncertainties and insufficient government infrastructure support.
The haulage sector is undergoing a profound transformation, as the effects of Covid-19 have brought underlying vulnerabilities to the forefront. Many companies that were previously propped up by government support such as furlough schemes and bounce-back loans are now facing insolvency as these aids have ended. Chief Executive Graham Lackey of Brit European emphasises that these businesses should have been allowed to fail in 2020, suggesting that the government’s intervention only postponed the inevitable restructuring of the industry.
The reliance on leveraged business strategies has been a significant factor in the recent string of company failures. Lackey points out that such practices are unsustainable in the long run, as they eventually lead to financial instability. Brit European, by contrast, has maintained a conservative approach, avoiding the pitfalls of overleveraging and focusing on sustainable growth instead.
Despite operating a carbon-neutral facility, Lackey remains sceptical about the immediate viability of transitioning to an electric fleet. Practical challenges, such as the lack of charging infrastructure and the high costs associated with electric vehicles, make the switch unfeasible for many logistics companies at present. He notes that while the environmental benefits are clear, clients are not willing to pay the premium for electric transport solutions.
The recovery of the haulage sector is also being hampered by broader economic factors. Rising interest rates and fluctuating economic conditions have tempered demand in industries such as construction and automotive, where Brit European has significant interests. Additionally, the availability of skilled labour, particularly qualified drivers and mechanics, remains a pressing issue, further complicating recovery efforts.
Lackey also highlights the challenge of meeting government net zero emissions targets, citing inadequate infrastructure as a key obstacle. He argues that the National Grid must be improved to support widespread electrification of fleets, a sentiment echoed by industry stakeholders who are cautious about the pace of technological advancements in truck design and battery efficiency.
The haulage industry’s path to recovery requires strategic restructuring and substantial infrastructure investment to meet future demands.
