While 2018 is unlikely to be all plane sailing for road transport, things are looking up says Cato Syverson, CEO of Creditsafe.
Figures from our most recent Creditsafe Watchdog Report show that the UK economic picture is starting to look a little less sluggish. Across 12 business sectors that we track on a quarterly basis, we saw outputs on the rise, with increased UK business sales and debt levels at a record low.
In part, this narrative holds true for the road haulage and freight sector. In the last three months of 2017, total sales filed increased by just over 1% on the previous quarter to more than £36bn, driven by 58,039 active companies, 4,521 more than in Q3. Despite this, the sector saw 602 companies falling into administration in the Q4 of 2017 – a record high for the year and across the wider UK economy.
Stalled or slowing employment was also apparent for the sector, with just a 4.7% increase of drivers and those working in the commercial transport sector over the last 12 months.
The sector also showed a troubling upward trend of increased bad debt or debt owed by road transport companies to their suppliers. Up 5.3% in Q4 2017, the average debt owed stood at £13,679, compared to £11,904 on the previous three months. We know UK businesses are still caught in the spiral of chasing late payments, which directly affects business growth, so the news that the transport sector is part of this poor payment culture is worrying.
The number of County Court Judgments (CCJs) issued at the end of 2017 showed signs of improvement, falling by 15% on the previous quarter across the transport industry. Despite the decline, the total CCJ value stood at £2.2m – 5.9% higher than the previous quarter.
We know that 2018 is unlikely to be plane sailing for the sector, and there are a handful of health warnings attached to the positive financial trends we have seen in the last three months. That said, we are entering the year in better economic health than many would have predicted 12 months ago.
