It’s been a difficult year for the road transport industry, but our annual survey of company performance highlights the professionalism and tenacity of operators in facing up to the challenges.
There’s no doubt that the past year has been a tough one for the transport industry. After a recovery from the impact of Covid, the industry has had to deal with low growth in both retail and manufacturing combined with soaring inflation.
The success of many companies in responding to these challenges can be seen in the Profit Growth table led by operators such as Culina and Turners of Soham.
However, the overall performance of the industry, as shown in the Key Averages table, is noticeably down on the previous year. A major component of this decline is the parcel sector. During the Covid crisis parcel operators were beneficiaries of the rapid growth in home shopping as well as delivery of Covid kits. Not surprisingly, the end of Covid saw something of a decline that not even a stellar performer like DPD could totally compensate for.
Not only that, the strikes at Royal Mail which pushed the business into a £436m loss last year, have left sector profits looking unexpectedly thin.
At first sight, the one parcel company that appears to have bucked the trend is Yodel, but it is worth noting that is has not yet released results for last year. Yodel is owned by the Barclay family which has been struggling with a mountain of debt, and there has been speculation in the financial press that Yodel will be sold as soon as a suitable buyer is found. As things stand, Yodel has extended its financial year from June to December. This means it is obliged to publish figures for 2022 by the end of this year.
The year has also seen the demise of some famous names. Tuffnells, the big green parcel machine, called in administrators in June blaming the impact of Covid, inflation and increasing competition. A number of the depots have been taken over by rivals such as DX.
Another well known operator, KNP Logistics was pushed into administration in September following a cyber attack.
Overall, smaller operators have proved to be remarkably resilient in the face of tough trading conditions. Of the 42 companies with turnovers of less than £50m, 22 have seen profits grow. That is a feat achieve by only six of the 15 companies with turnovers of more than £500m.
And there is evidence that companies are continuing to invest. According to the Logistics Confidence Index, published in October by Barclays and BDO, some seven out of 10 logistics leaders say “significant capital spending is likely or very likely” over the next 12 months.
Although there are still headwinds to be faced in the coming year, there is evidence that the domestic economy, at least, is calming. Inflation is easing, and worries of a deep recession have largely gone away with modest growth forecast for the coming year. The ingredients are there for the industry to see a resurgence in performance.
The MT Top 100 explained
The rankings were finalised using information available as of 23rd October 2023. The data was compiled from accounts filed at Companies House.
The table lists the company in regard to its official registered name at Companies House, which is not always the same at the company’s trading name.
Turnover: As far as possible we have used figures generated solely or primarily from UK road transport and warehousing activities, unless otherwise stated below.
Employees: predominantly those employed solely or primarily in the UK.
Return on capital employed: calculated as Operating Profit / (Total Assets – Current Liabilities) expressed as a percentage.
Profit growth: minus (-) signs have been changed so they always mean worse.
For example, Carlson Vehicle Transfer made a smaller loss in 2022 than in 2021. The calculation gives a growth figure of -5.8% (because the loss is smaller) but because the column is called “Profit Growth”, intuitively that seems wrong. Consequently, we have changed the sign to 5.8% to reflect the fact that it is actually better.
Advanced Supply Chain: figures reflect the performance of Advanced Supply Chain Group, excluding the results of its Advanced Forwarding international freight forwarding business. 2021 figures are for 13 months.
BCA Automotive: comprises Walon, Paragon Automotive Logistics and Sensible Automotive, which are all subsidiaries of BCA Marketplace.
Culina Group: comprises Culina Logistics, Eddie Stobart Logistics, Great Bear Distribution, Integrated Packing Services, Morgan McLernon, CML F&L (Telford), Fowler Welch, iForce, and Warrens Warehousing & Distribution (Midlands).
DHL: comprises DHL Supply Chain, DHL Parcel UK, Tradeteam, DHL International UK, and Exel UK. The company is consolidating logistics contracts into DHL Supply Chain as they are renewed from Exel. Employees in DHL Supply Chain and Exel are employed through DHL Services. DHL’s freight forwarding business is excluded from our figures.
DPD: comprises DPDgroup UK and DPDLocal (formerly Interlink Express). The pre-tax profit figure has been adjusted to reflect a £90m dividend paid by DPDlocal to DPDgroup.
FedEx: comprises FedEx UK and FedEx UK Transportation Ltd (formerly TNT UK).
Gefco: was sold to CMA CGM by former parent RZD (Russian railways) in July 2022, and has been incorporated into Ceva Logistics. The two are included separately in the main table. The impact of the takeover is shown in a separate table.
Gist: was acquired by Marks & Spencer in July 2022.
GXO Logistics: created when XPO spun off its contract logistics business in August 2021. GXO Logistics UK II is the new name for Clipper Logistics which became part of GXO in June 2022. 2022 figures are for 8 months. We have shown the two separately in the main table, while the impact of the takeover is shown in a separate table.
Kinaxia: the main entry is for Kinaxia Ltd. We have included a separate table to show the figures for the constituent companies. The AKW Global Warehousing business has been renamed Kinaxia Logistics & Fulfilment.
Knowles Logistics: New name for Knowles Transport following acquisition of Masters Logistical Services in October 2022.
Kuehne+Nagel: for 2021, turnover is derived from its contract logistics business (as reported by Kuehne + Nagel Ltd). Turnover from its freight forwarding business is excluded to reflect the domestic road freight related contributions to the business. However, as K+N does not split the two divisions into legal entities, we were unable to break down pre-tax profit, capital employed and employee numbers in the same way. Therefore profit and employee figures include the international freight forwarding business.
Lenham Storage: Comprises Lenham Storage and Lenham Storage Southern.
McBurney Holdings: comprises McBurney Transport and Bondelivery Northern Ireland.
Pentalver: Comprises Pentalver Transport and Pentalver Cannock
Royal Mail: Parent company renamed International Distribution Services. It only gives return on capital figures for the whole group, not just UK operations. Parcels accounted for £3.9bn of domestic revenue in the year to March 2023, while letters accounted for £3.5bn. GLS, the international parcels business accounted for £4.6bn of revenue.
XPO: comprises XPO Transport Solutions UK and XPO Bulk UK. We have excludes XPO Global Forwarding and XPO Maintenance UK to reflect turnover and profit derived from domestic road freight.
Yodel: comprises Yodel Delivery Network and Arrow XL. Accounting period extended from 30 June 2022 to 31 December 2022.