Tuesday, June 2, 2020

Survey Reveals One in Six Road Haulage Operators Fear Insolvency in Less Than a Month

Cost of Virus on the Sector Exposed as Calls Come for More Government Help
Shipping News Feature

UK – A survey by the Road Haulage Association (RHA) shows that the vast majority of hauliers are still struggling after pandemic lockdown measures have seen volumes collapse with 16% of the 600 freight firms responding claiming they could be insolvent within four weeks, despite government furlough payments and bounce back loans offering a temporary reprieve.

The survey ‘The Impact of Covid-19 on the Haulage Industry’ shows over half responded with a call for government to offer a weekly furlough model to service inconsistent workloads, and many urge the Treasury for help with business rates and standing costs. Operators are also concerned about their vehicles being safe to drive as they prepare to get trucks back on the road. 30% fear they will struggle to secure MOTs as testing is still suspended.

The RHA has urged the Government to delegate the function to non-DVSA staff and reopen authorised testing facilities to start clearing a backlog that stands at around 100,000 trucks. Meanwhile RHA chief executive, Richard Burnett said financial packages have helped keep firms afloat but the industry needs more support to pull through the crisis and kick start recovery, saying:

“Hauliers have made it clear that ministers must pledge more help and remove the obstacles that will hamper firms’ efforts to get back on the road. Furlough scheme payments and bounce back loans have plugged some gaps but they won’t be enough to sustain cash-strapped businesses beyond the very short term. Debt support, flexible furlough rules and a DVSA commitment to quickly expedite the MOT backlog would boost the industry as it gears up for recovery.”

Key findings from the survey, which the RHA undertook on behalf of the Department for Transport from both member and non-member operators, include:

  • 69% of firms have successfully applied for furlough scheme funding
  • 18% have secured a bounce back loan - a further 13% await a decision and 2% have been unsuccessful
  • 16% of firms predict they could face insolvency and cease trading in the next four weeks
  • 85% of hauliers who believe they could be gone in the next four weeks blame a drop in volumes
  • 57% of firms say a weekly furlough scheme is vital to help firms emerge from the crisis
  • 30% of firms fear a lack of roadworthiness testing availability will restrict their ability to recover from the crisis
  • Access to finance is a concern for 27% and 17% are worried about driver health
  • 42% say a new scheme to contribute to standing costs for parked up/SORNed trucks is crucial