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Light at the end of the tunnel?
Page 20
Page 21
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With the recession hitting road transport hard, some hauliers are taking more of a blow than others. CM Looks at how tanker specialists are weathering the storm.
Words: David Harris
THE RECESSION has affected most hauliers, but not in equal measure. This is not only true across different sectors of the industry, but also in the various sub-divisions across those sectors.
Take tanker operators. Most concede they have probably been less affected than most.
The widespread drop in demand has seen volumes fall across the board but many acknowledge they haven't been quite so battered as general hauliers. However, those tanker operators supplying petrol stations, have also seen volumes fall.
Peter Lamer, managing director of fuel tanker specialist Suckling Transport, estimates that volumes were down about 10% over the past year. But compared to other sectors, he says: "We are probably one of the more fortunate ones." He adds: suppose you have someone like us at one end of the spectrum and hauliers involved in construction at the other, who must be suffering badly."
But dig a little deeper into tanker operations and things become a bit more complicated. Suckling has battled the recession reasonably well, but a completely different picture emerges if you look at those companies with a broader operational base. A good example is TDG. Colin Rutherford, the company's bulk operations director, is clear the recession has affected different markets to different degrees.
Like Lamer, he estimates that routine fuel deliveries have fallen by about 10%, which is in line with the general economic trend. But commercial fuel deliveries — to hauliers, for example — have dropped substantially more.
Chemicals are even more complex. Polyolefins, one of the chemicals transported by TDG, are used to manufacture various components for the food industry, including cling film and plastic food trays. Here, their use has held up well, but they are also used in the construction industry (plastic pipes and UPVC windows) and for car components — industries that are doing particularly bad this year. The overall result is that polyolefin volumes have fallen by around 30%.
Another chemical used in cars is polypropylene. Rutherford says: -Unless you drive a car with a walnut dashboard, most of the inside is likely to be made out of chemicals. We work for firms that supply the chemicals that make the plastics, and customers of our customers are finding volumes are down. We are all affected, and it is this fall in volumes that has forced us and other firms into making redundancies."
Rutherford estimates that for tanker operators, volumes carried are down by between 10% and 30% since the end of last year, depending on the type of business.
Fleet reduction
Lancaster-based Kidds Transport, whose tanker business is dependent on carrying some of the ingredients used in cement, has been hit just as hard as the construction industry that uses the end product.
Managing director Martin Park estimates that business has been approximately 70% down, which has resulted in the firm cutting its fleet. This has been done not by selling vehicles (you won't get much for second-hand trucks, says Park), but by mothballing them in the yard, so they can be used again once the recovery begins.
Kidds has not laid off any staff, but has cut the workforce through natural wastage of staff retiring and leaving the company for their own reasons.
For tanker operators generally, the fall in business has not been so severe. Nick Deal, Road Haulage Association (RHA) manager for logistics development, says that a 10% fall in business was widely reported by members of the tanker group at its last meeting, even by companies whose businesses are holding up reasonably well.
He is waiting for a meeting to get a clearer idea of whether this situation has changed.
In the meantime, a survey on fuel usage carried out by Deal in April confirmed the average 10% fall in deliveries to petrol stations. But again, there were significant qualifications, not least in the amount of fuel used by hauliers. It was suggested this had fallen by 20% in the first quarter, indicating that haulage, generally, was taking a hit rather harder than 10%.
This seems to add up to a picture where tanker and hazardous cargo operators may, in some cases, be holding up against the recession better than hauliers generally.
Degree of hope
This is not universally true, and, for some of the bigger tanker operators, it tends to vary between different types of business. The only invariable truth appears to be that hauliers' fortunes are more dependent on those of their clients. If the customer is surviving the recession relatively well, then it is likely the haulier that serves them will do so, too.
This variation between markets was confirmed by another tanker operator reporting to the RHA,which revealed that liquid bulk business had held up better than dry bulk.
Liquid volumes have fallen by 15%20% against 28% for dry bulk.
But the same haulier has a message that might send operators into the second half of the year with a degree of hope. In the first half of May. it reported rises in volumes in both liquid and dry bulk "that we have not seen since the middle of last year': It may be a blip, of course, but hauliers are fixing their eyes on any light at the end of tunnel.
Should you start reading stories about a recovery in the construction or car businesses, you can probably infer that tanker hauliers have clearly got there first. •