The driver shortage becoming more acute drove CM Downton’s profit down in the 2016/17 financial year, and the operator said it’s having its “most difficult commercial conversations” with clients to date as it moves to increase fees.
MD Andy Downton told MT that its 9% pre-tax profit drop to £5.1m in the year ended 30 June 2017 was “symptomatic of increased driver costs and increased agency costs” but that the business had the situation in hand.
He said: “The driver shortage has really become more acute in the last 12 months. And as a result of that we’ve had to respond by increasing driver pay.
“And we’ve made a big investment in driver recruitment and the way we run the apprenticeships. We’re trying to combat the driver shortage in every way we can.”
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The operator has been running its apprenticeship scheme since 2014, and hired 22 young divers in its first two years. But in 2018 alone, the operator is planning to take on 25 new candidates.
And with turnover up 5% to £116.8m and more contract wins in the pipeline, Downton said that the market is hardening and he’s “feeling upbeat” about the current year.
“Sales are strong, our order book is full, there’s plenty of new contract wins coming through in the next 12 months.
“We’re very upbeat and the market is strengthening and clients are starting to realise that they want to lock in capacity. So the smart clients are locking hauliers like ourselves at long term contracts at rates that are sustainable.”
“We’re having more difficult commercial conversations with clients than ever before, but clients are understanding. They understand we have to have a sustainable industry - it’s only right for the economy.”
