The HGV annual test model has failed to demonstrate resilience during the pandemic, prompting Logistics UK to call for a review of the system.

In a report about the impact of Covid-19 on logistics, the trade association highlighted how the light vehicle MOT scheme continued operating through 2020, enabling van operators to maintain their pre-pandemic testing schedules.

But it said that “in stark contrast”, the HGV annual test delivery model did not show resilience, which it was now taking up with the government.

Logistics UK pointed to how the former scheme operates through accredited independent testers, as opposed to government agency employees in the case of lorries.

The report said: “While we were successful in agreeing temporary arrangements with the Department for Transport and the DVSA, we have called for a review of the HGV testing system as a priority.”

The report also highlighted other effects of the coronavirus on transport and logistics during 2020, including the significant reduction in UK diesel prices, as the price of a barrel of oil plummeted by 66% to $18 in March, affecting businesses' operating costs.

It also said that by September, there were 287,000 HGV drivers in employment in the UK, with only 130 claiming jobseeker’s allowance: “This presents a very different picture to the height of the last recession when unemployment for HGV drivers soared to a peak of 14,028 in Q2 2009,” it said.

Read more

“As the economy began to recover in 2013, there were not enough drivers to meet demand; the situation has worsened since then.”

However, the report found that businesses with large HGV fleets were less likely to experience poor financial health last year, with no companies operating fleets of more than 100 HGVs reporting a financial health rating below 5 in August, September and October 2020.

By contrast, in September, 19.4% of firms with between one to nine HGVs were reporting poor financial health.

In addition, between July and September there were 2,672 company insolvencies – a reduction of 9% on the previous quarter and 39% down on the same period during 2019.

The report said this was likely to be partly driven by government measures in response to Covid-19, including the reduced operational running of the courts and HMRC enforcement activity and temporary restrictions on the use of statutory demands and certain winding-up petitions, as well as government financial support.

The report added: “In Q3 2020, Red Flag Alert research recorded 557,000 businesses in ‘significant distress’ after the largest quarterly leap in financially distressed companies since 2017.

“This 6% increase (from 527,000 in Q2 2020 and 9% increase since Q1) in Q3 2020 comes despite a backlog of court action preventing many County Court Judgments and winding up petitions being issued.

“Begbies Traynor warns there could be a flood of insolvencies when the courts do get back to anywhere near normal capacity and attempt to clear the backlog of pending cases.”