That said, this is not the case for removals companies who tend to charge differently. For example, if a removals firm has a set fee for a three-bedroom house, then it won’t matter to them if the seller has had to take a lower bid offer from their buyer to sell it. Although this might affect other professionals in the property sector, it shouldn’t impact so much on removals firms. The same goes for man and van drivers who tend to operate at the smaller end of the market, typically helping with student moves or taking on the relocation work for couples with perhaps just a single-bedroom flat to their name.

It is likely, however, removals companies – large and small – will be affected if the housing market plummets and people simply don’t want to move or – worse still – cannot afford to do so. As such, some removal firms are already planning for the coming year with some sort of housing slump in mind. Although no one really knows exactly how things will pan out in the removals industry, inward investment is currently low and likely to remain so for a few months in 2023 at least. Why? Because of the uncertainty about the housing market in the country more generally, removals firms are tending to economise as much as possible already. This might mean not making an investment decision on the purchase of lifting equipment, new vans or even taking on additional members of staff for the time being. This could be a mistake, however, because what the coming housing market changes may mean is that more people move rather than fewer, at least in the short-term.

So, what is going on and what do the latest indicators from the housing market tell decision-makers in removals firms?

Dropping Asking Prices

According to industry data published by Zoopla, the online property marketing firm, house and flat sellers have already started to lower their expectations when putting their properties up for sale. Although some parts of London – typically the ones that had seen the most growth in house sale prices for the last few years – began to see negative growth much earlier this year, according to Zoopla’s figures, the dropping of asking prices has since become a nationwide phenomenon.

In other words, the expected slump in the housing market that has been widely predicted by economists and government statisticians alike for the coming year is already upon us. Zoopla itself says that average house prices are likely to fall by as much as 5 per cent in the coming year. Other reputable sources say that the drop could be by as much as double that. In just the last few months, sellers have typically had to settle for a house price that was 3 per cent below what they had initially marketed it at.

Of course, there would have been some properties that bucked this trend. Nevertheless, the difference between what sellers thought they could get and what buyers were actually willing to pay was quite marked. No doubt, some sellers refused to drop their prices and their properties remain on the market. So, although the 3 per cent figure might set alarm bells ringing in parts of the property sector more widely, it shouldn’t necessarily worry removals firms.

The reason for this is that – by and large – sellers have been realistic. What they have done is place their property on the market and realised that to get the deal over the line, they’ve needed to acquiesce to their would-be buyer’s demand for a lower sale price. In other words, houses have still been sold and people are still, therefore, continuing to move and to require the services of removals firms on the whole.

According to Zoopla’s data, it is the Southeast of England where the greatest adjustments to sellers’ expectations have been detected. That is not to say that house prices have been stable elsewhere, of course, merely that the phenomenon has been most pronounced in the places with the highest population density. What does this tell us? Firstly, it could indicate that house prices in the Southeast have been over-inflated in recent years, a situation that was not sustainable as it was simply too costly for many young people on average wages to get onto the housing ladder. In addition, it could mean that there is more competition in the more densely populated towns and cities of the Southeast. In other words, where sellers have been competing for the attention of a reduced number of potential buyers, only those who have been willing to adjust their asking prices have gone on to secure sales.

Wider Economic Troubles

Many people have put the shift in the housing market in the country down to the disastrous mini-budget that was announced by the then Chancellor of the Exchequer, Kwasi Kwarteng. Although the government’s announcement led to an increase in state borrowing costs and a significant fall in the value of sterling, the statement Kwarteng made may not be the only factor in what is causing the UK housing market to undergo its current significant changes. This is because there is another factor at play which the government may or may not have made worse depending on your point of view. In a word, this factor is inflation.

Of course, inflation is something that has been reflected in the housing market in the UK for decades. Despite a changing trade position with Europe, the credit crunch and numerous other factors, UK house prices have – more or less – seen sustained growth for 20 years. However, this is coming to an end just as the price of commodities is going up. Of particular note is the cost of fuel, something that disproportionately affects removal companies, of course, given their need to keep vehicles on the road. Therefore, off-setting high fuel costs against lower rental and property prices isn’t likely to work out for most business models.

Worse still, the Bank of England only has one lever it seems willing to pull to stem commodity prices in the country – interest rates rises. The baseline lending rate has risen several times this year already. Of course, this means that mortgage rates have also seen significant hikes, not least for fixed-price mortgages. For many in the property sector, it is the rise in interest rates that is most significant and, what’s more, many predict the Bank of England will push them up still further in 2023.

Past Lessons

It is important to note that interest rates were very high in the mid-1990s, at levels far beyond what most economists predict for the next year, at least. Back then mortgage lenders tended to repossess properties when borrowers fell behind with payments. These days, lenders tend to encourage homeowners to downsize to something more affordable instead so they can pay back their mortgages with a lower level of subsequent debt. This may work out in which case removals firms can expect more and more trades in the housing market to take place even though they might be at a lower overall value. There again, some homeowners with unsustainable mortgage payments may look at a less buoyant rental market and decide that moving into rented accommodation is a more affordable way to live. This might not suit all estate agents but it shouldn’t negatively impact on the way removals firms operate.

What may put more of a brake on moving is when homeowners face negative equity. This will mean they are likely to sit it out until such a time that the housing market recovers making it affordable for them to sell up and be able to pay off their borrowing in one go. Of course, when an individual is in negative equity will depend on when they bought their property, at what price and the current valuation in their locality. Nonetheless, the more house prices drop throughout 2023, the more homeowners will fall into this category. As such, removals firms will need to keep an eye on what the market is looking like in 12 months’ time just as much as they are today with regard to future investment decisions.

In short, some volatility in the housing market – such as we are seeing already – isn’t likely to affect removals firms much in the short term because it will mean people move in order to place their household finances on a more sustainable footing. If there is a sustained downturn in prices or there is a bigger than expected drop in demand for homes than is currently being predicted, then removal companies are likely to feel the need to plan for a harsher period with fewer trades and consequent house moves.

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What is the latest news with respect to shipping and delivery technology today? Read on to find out.

BigCommerce Announces Global Partnership with DHL to Support US Growth Plans

The technology firm BigCommerce, which has developed one of the most widely used open SaaS e-commerce platforms, has said that it has entered a new commercial relationship with one of the world’s leading providers of international express shipping brands, DHL. BigCommerce had previously been viewed as a tech firm that was associated with fast-growing and up-and-coming business-to-consumer and business-to-business firms, so a partnership with a truly established firm like DHL is being viewed as a significant step up by many. The recently announced commercial relationship will be geared toward helping online businesses in the USA initially. The idea is that the owners of such internet-based businesses will be better able to capitalise on opportunities overseas and to expand their portfolio of customers and products globally.

According to the CEO of DHL Express, Greg Hewitt, the logistics provider – which is actually headquartered in Bonn, Germany – was looking forward to working with BigCommerce because it would allow more of their merchant client base in the US to strengthen their reach across the globe. Significantly, Hewitt reckoned that this would be something that was achievable across a variety of industries. “As the requirements of start-ups enterprises – as well as mid-market firms and larger enterprises – evolve and heighten,” he said, “We will be able to further their support.” Hewitt explained that BigCommerce merchants should now expect fast, reliable and expedited shipments through the partnership that would ‘optimise their cross-border potential’.

BigCommerce, as a NASDAQ-listed software services provider, currently has many merchant customers in the United States that rely on its service to run their e-commerce back-room operations. With the new announcement, merchants who join the scheme will be able to access discounted rates from DHL Express. However, the programme is not entirely one of offering lower pricing for global and domestic shipping. Crucially, any merchant that subscribes to the scheme will also gain access to DHL’s logistics and international shipping professionals to help them with both imported and exported goods.

Under the partnership programme, BigCommerce’s clients will also be able to use DHL’s On Demand Delivery tool. According to DHL, this provides their commercial clients with proactive notifications of the progress of shipments as well as giving the option of flexible delivery arrangements across the world. As Russell Klein, chief commercial officer at BigCommerce put it, the partnership with DHL illustrates ‘our commitment’ to providing online retailers in the US access to technologies and service providers of the highest calibre in the logistics sector today. “DHL shares BigCommerce’s ambition to help retailers grow faster and sell more to maximise their commercial success,” he said.

London-Based Zencargo Announces Partnership With Tech Firm Tive for Greater Shipment Visibility

A leading digital freight forwarding firm that operates from the City of London has recently said it is teaming up with shipment tracking solution provider, Tive. The idea is that customers who make use of Zencargo’s freight forwarding expertise will soon be able to track their shipments as they move around the world in real time. The idea is that it will help organisations that rely on international supply chains to make better decisions about their processes as they are able to gain up-to-the-minute information about their deliveries. For its part, Tive describes itself as a ‘visibility solution provider’ which is able to provide critical shipment locational data thanks to sensors that it claims are the best in their class.

Not only does Tive’s solution mean that companies that rely on shipping in parts and components will have a much better idea of when they will arrive but the locational data provided also helps to cut down on unwanted problems like missing shipments and theft to a certain extent. Where temperature-controlled shipments are being made – for food consignments and certain pharmaceutical goods, for example – Tive’s sensors will also be able to provide accurate information directly to Zencargo’s clients. According to Tive, this can be invaluable to certain business models that rely on goods arriving in mint condition for their own quality assurance purposes.

According to a statement made to the press announcing the partnership, the supply chain industry has faced much disruption over the past two years. Therefore, Zencargo wanted to find a way that would mean its clients could better understand the progress of shipments as they happened rather than for them simply to put up with increased costs and longer lead times in the sector. In particular, Zencargo’s executives thought this was crucial for importers of perishable goods, which is why the temperature and condition tracking offered by Tive’s technological solution was so appealing to them.

According to the freight forwarding firm, partnering with Tive will mean that Zencargo can provide its customers with deeper insights into the current location and condition of goods at the very moment such information is needed. Tive already works with some trusted global brands, tracking the real-time shipments of firms like Alpine Fresh, Biocair and OBE Organic, among others. Thanks to its industry-leading and highly accurate trackers, Tive says that it can ensure businesses are able to monitor inventories throughout the entire transportation journeys of goods in transit while meeting quality and regulatory compliance requirements. In the end, Zencargo is betting that this will mean improving the satisfaction of its services among its customers.

Indeed, Tive’s Solo 5G sensor technology matches – to a certain extent – the sort of service offering that Zencargo wants to promote. These sensors have geofencing capabilities and also provide automated notifications to coincide with the arrival and departure times of shipments. Equally, if an unexpected route deviation occurs, Tive’s solution will provide an alert. Given that Zencargo’s business model goes beyond a traditional freight forwarding model by promoting a digital platform through which all stakeholders involved in an intermodal supply chain can liaise with one another, Tive’s technology appears to be a good fit.

Alex Hersham, Zencargo’s Chief Executive Officer said that because of the partnership, his firm would be able to add greater visibility to supply chains that go even further than the current services they offer. “By making sure [our clients]… have all the information they need to to make agile decisions,” he said, “Delays and losses of goods can be prevented.”

Tive’s founder, Krenar Komoni, backed Hersham’s sentiment. He said that the new service would allow Zencargo’s customers to view hyper-accurate condition and location tracking information in real-time. “Looking from within the Zencargo platform to help prevent problems before they rise,” he said that this would help to ensure that goods arrive on time and in full more often.

Enhanced Truckload Capabilities Announced by Banyan Technology

Based in Ohio, Banyan Technology, one of the world’s foremost providers of freight and logistics management software that provides over the road (OTR) shipping solutions, has pre-announced that it will unveil a new truckload service at a logistic trade show in the US later this year. At Connect 2022, which will take place in Cleveland this year, Banyan says it will demonstrate its enhanced truckload system for the first time. Providing real-time access to load boards, this enhanced software solution will allow Banyan’s clients to rate and compare various OTR shipping modes before executing them. Crucially, this will all be possible from a single-screen interface, allowing logistics firms to significantly simplify their shipping operations.

“I am excited to showcase our commitment to our truckload solution,” said Brian Smith, Banyan’s CEO. “[The enhancement will]… make it easier to rate and book truckload shipments via our LIVE platform,” he added. Smith went on to explain that this would function for both direct carrier APIs as well as for the automated management of contracted rates. Deanna Castello, Director of Marketing for Banyan, echoed his CEO’s comments, stating that Connect 2022 constituted the ‘perfect time and place’ to release their newly enhanced service option that will round out all of the tech firm’s OTR modes within a single software platform. Connect 2022 Conference takes place at the start of October and will be attended by over a hundred commercial firms in both the United States and Canada that currently use Banyan’s software systems. According to Banyan Technology, the software firm has access to three times more carriers than any other service provider in North America today.

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Soon after the trouble caused by the pandemic started to fall away, there were international tensions that caused shipping companies additional problems. Of course, the war between Russia and Ukraine – with the attendant rising cost of fuel for container vessels and trucks alike – pushed up the price of moving containers of all sizes from one part of the world to another. Military manoeuvring in the Far East, largely around the disputed island of Taiwan, also added to these shipping headaches. Overall, the container shipping industry has had a lot to contend with for two and half years, at least.

However, new data published by the Port of Valencia has encouraged many in the containerised shipping sector. Located in eastern Spain, this port has long been considered a bellwether in the shipping industry. In other words, what trends and practices are discernible there tend to be repeated soon afterwards in other European ports, particularly those in the Mediterranean. Recently published figures for August 2022 show remarkable improvements for the shipping industry in a number of areas. These are worth looking into a little more closely as they provide analytical data that is likely to help planning and investment in the containerised shipping industry in much of Europe and other locations around the world. Read on to find out more about the traffic indicators and other statistics recorded by officials at the Port of Valencia during the month of August.

Often regarded by international freight commentators as a barometer of the state of international trade, Valenciaport’s announcement about its terminals offered two distinct directions of travel. Compared to August 2021, the port’s owners recorded a drop in transhipment traffic. However, this was more than made up for by new highs in import container traffic. In addition, solid and liquid bulk cargoes as well as cruise passenger numbers saw a significant twelve-month rise. According to the Statistical Bulletin of the Port Authority of Valencia – the body responsible for measuring traffic through the port – during the month of August this year, Valenciaport set two milestones. Firstly, a total of 86,463 containers were unloaded at Valencia, indicating a big upturn in imports. To make that clear, this is a rise of over 21 per cent compared to the same month in 2021. There was also an upturn of around 10 per cent in the unloading of empty containers at the port. Although this is not indicative of import figures, it suggests that the containerised shipping sector is returning to something like pre-pandemic normality.

In related news, the Port of Valencia also said that it had seen the full recovery of its cruise tourism sector. The August figures noted the arrival of over 103,000 passengers. Perhaps of more significance to the haulage industry is that there was a recorded drop of over 5 per cent of outgoing containers year on year. Full containers (FCL shipments) saw the sharpest decrease, the ports figures stated. Nevertheless, the overall picture of container movements at the bellwether port was up – and up significantly – compared to the last few years.

It is also important to note that August was not an outlier when it comes to the increased movements of shipping containers in eastern Spain. According to the latest statistics, the rise in import containers being unloaded in Valencia can be just as easily evidenced by the cumulative number of those being handled throughout 2022 thus far. From January to August, for example, there was an increase of almost 10 per cent compared with the same eight-month period in 2021. That is not bad considering much of this year has been subject to geopolitical complexity, not least in the eastern Mediterranean which has been most impacted by the war being waged in the Black Sea. Given the problems international traders have faced with the increased risks the war in Ukraine has inevitably led to, there have been month-on-month – sometimes week-on-week – fluctuations in international trade.

These ups and downs, however, were evened out when the first eight months of 2022 have been viewed as a whole. To put this in a clearer, more statistical light, some 55.48 million tonnes of goods have been handled by workers at the Port of Valencia since the start of the year. Nevertheless, a note of caution should be sounded. Despite the encouraging figures on container movements at the port, the report made clear that movements of full TEUs – that is to say, standard 20-foot containers that are over six metres in length – saw a fall in 2022 so far. Although modest, a recorded drop of 6.23 per cent in FCL containers dedicated to cargo will raise eyebrows in the industry. Some commentators have already described the decrease in transhipment figures at the Port of Valencia as revealing that the port no longer provides the economy of scale that it once did. Given that more than only 80 per cent of its occupancy rate was being used during peak business days, some shippers have been looking at other, larger ports in the western Mediterranean for their containers. Like many other ports of its size, this could indicate that the Port of Valencia is now being increasingly regarded as too small, something that could indicate a wider trend toward more massive seaport investment.

Furthermore, there has recently been a move by shipping container companies themselves to provide greater economies of scale. Two of the four leading suppliers of insulated container boxes and refrigerated shipping containers – China International Marine Containers and Maersk Container Industry – had announced earlier in the year that they were preparing to merge with one another. However, this would have left the world exposed to very little competition in the sector had the plan gone ahead, something that notably raised the eyebrows of officials in the United States. The Department of Justice there announced an investigation into the proposed sale of Maersk Container Industry to the Chinese-backed firm. In August, it said that following their investigation, China International Marine Containers had decided to pull out of the deal. As such, the company’s attempt to control 90 per cent of the global refrigerated container market is now on hold, perhaps permanently.

Consequently, it seems that the push towards greater economies of scale at both container ports and the manufacturers of shipping containers may be something that does not continue as many have predicted in 2022 and beyond. At some point, the flexibility of mid-sized seaports, like Valencia, may be what the market is looking for, especially if the need for more agile shipments picks up compared to the current trend towards rock bottom pricing competitiveness. Indeed, this very fact may account for why the Port of Valencia has been seen as a lightning rod for the shipping industry over the course of the last couple of decades. With increasing potential for governmental interventions – as the Maersk takeover episode shows – the container shipping sector still needs to remain competitive and, above all, versatile in a rapidly changing world.

After all, few would have predicted in 2021 that there would be such sectorial differences in the figures for imports at the Port of Valencia. Back then – before Russia had invaded Ukraine – the steep rise in the imports of natural gas the port has seen in 2022 wouldn’t have been obvious. And yet, it is worth highlighting the traffic requirements of the energy sector in Valencia, notably with natural gas, would go up by as much as 160 per cent compared with the same period last year. In this sector alone, over 2,668,000 tonnes of natural gas imports have arrived in Spain this year so far, mostly from the USA, but also with significant contributions from Nigeria and Egypt. There again, imports of vehicles and transportation sector parts have also increased, albeit with a less significant margin.

Echoing the overall trend of increased import movements compared to export movements, container traffic in Valencia also saw an upturn in the agri-food industry. Movements of shipping containers with canned food produce rose by some 14 per cent while a similar figure was recorded by the animal feed and fodder sub-sector. Imports of containerised oils and fats also went up but by a slightly lower margin. Many international shipping professionals now expect to see similar figures from other Western European ports although, with post-Brexit trading arrangements still a factor, the pattern in the UK may prove to diverge from other countries in the region. That said, August’s figures for TEUs handled to and from the UK rose by 60 per cent compared to the same period in 2021, according to the Port of Valencia’s latest data.

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According to the current government guidance, the soon-to-be introduced rules will mean changes for any firm or individual who transports goods to, through or within Europe. The changes have come about because of the UK’s deal with the EU – officially known as the Trade and Cooperation Agreement – that was struck in 2020. It is worth bearing in mind that the new rules will not just apply to lorry drivers and people who operate heavy goods vehicles because vans and other light goods vehicles also feature within the changing regulatory framework. This means anyone who operates a European courier service is likely to have to comply. This even includes drivers who transport commercial goods in their cars if they will be making use of a trailer.

In the vast majority of cases, people who are moving goods commercially within Europe will require a vehicle operator licence and a transport manager. So, you won’t only have to declare that you are transporting commercial commodities within the EU – as well as Iceland, Liechtenstein and Norway – but you will have to also – declare when you intend on travelling between two points in the EU. Any firm that has drivers who operate HGVs, vans or trailers will have to log onto an EU portal to say where they are coming from and where they are heading to. Owner-operators will also be expected to make the same declarations prior to driving to a UK port and embarking on a journey into Europe from a roll on-roll off ferry service.

To be clear, the use of the EU portal to make the newly required declaration does not cost the driver or their firm anything. It is simply that one needs to be made or drivers may be turned back at the border. Declaring the details of a journey into Europe will be known as a posting declaration. Although no fees for making a posting declaration will be levied, this constitutes another layer of complexity that drivers who travel from the UK to European destinations must take into consideration. Bear in mind that a posting declaration isn’t just required when leaving the UK for Europe, however. As a British-registered driver, if you pick up goods in Italy and transport them to Denmark, for example, you will also need to make a posting declaration for that sort of job, as well.

To break that down a little, the UK government’s current advice is for drivers of UK-registered vehicles to make a posting declaration if they are undertaking any cabotage work. This would include and jobs which involve loading goods in any EU country – plus Iceland, Liechtenstein and Norway – and then unloading them at another location in the same country. Posting declarations are also advised for cross-trade jobs that involve collecting goods in one of the aforementioned countries and then delivering them to another state within the bloc. The same rules will also apply to drivers who are transporting their own goods from one business address in the EU to another. This would affect larger businesses, for example, those that wish to shift their own stock in a UK-registered vehicle from the Netherlands to Germany and vice-versa. The rules on posting declarations will not apply to drivers who are using EU-registered vehicles, however, even if the firm they are working for is British.

Although the rule changes are likely to make a big difference to owner drivers, house removals firms, freight forwarders and courier companies that operate in continental Europe from time to time, it is important to note that it will also affect those who ply their trade on the island of Ireland, too. In short, declarations of commercial journeys within the Republic of Ireland will need to be made, as well, and this includes vehicle operators who are registered in Northern Ireland. Very few exemptions will apply when the scheme is introduced in May. For example, operators won’t be obliged to declare when their drivers are transporting an empty commercial goods vehicle, only when it is being used to actually deliver consignments. The latest advice that the government has published also states that a posting declaration is not required when a driver will be transporting goods from the UK to a non-European country. However, this will mean that they won’t be permitted to either load or unload any goods while they are en route within Europe.

To them prepare for the rule changes when they come into force, haulage firms and owner-operators can already create an account for themselves on the EU portal. Given that an account must already be created for a company to be able to declare a journey, it is the one of the few practical things that firms can do to ensure they are ready. Once a company account has been created, users can invite other people from their haulage or courier firm to share the same access rights. Further information on how to do this is now available at postingdeclaration.eu where there is a help section that answers most of the common questions about the registration process. There is also a tutorial video that has been prepared in advance of the regulatory change.

Nevertheless, the creation of a posting declaration account is not intended to be a difficult task. According to the UK government, hauliers and couriers will need only basic information about their company, transport manager (if they have one) and their employees. To break that down, the company information that will be needed includes the firm’s name, its address and its country of registration. On top of this users will need to declare an email address they want correspondence to be sent to as well as their VAT number, their company registration number and their UK Licence for the Community number. In terms of transport manager information, similar information is required, such as the name, office address, telephone number and email address of the manager in question. In addition, you will need the transport manager’s CPC certificate number.

Finally, owner-operators will need to enter some personal information about themselves into the system. This includes their full name, their date of birth, their email address and their home address. Other required driver information includes their driving licence number and any internal reference number they may have, such as their employee payroll number, for example. Companies that employ multiple drivers will need to enter this sort of information for all their employees who make journeys from the UK to Europe. Employers will also be required to state how long a driver has been employed under contract with a haulage firm although this will not apply to owner-operators. However, both employed and self-employed drivers will need to produce some form of personal ID. This will usually be their passport’s document number, its issue date, its expiry date and a declaration of where the passport was issued. Without such information being registered on the system already, making a full posting declaration is likely to be delayed and, in the worst cases, not possible at all.

Although the idea of making a posting declaration every time a journey is made in Europe with a UK-registered commercial vehicle is likely to be something couriers and road haulage firms could do without, it will mean that well-run companies will be able to streamline their processes in a way that less well-organised ones might not. Importantly, although making a posting declaration for each individual journey a driver makes in each country might be all that is needed among firms that only make international deliveries from time to time, the rules allow for more frequent drivers to register another way. This is by making a posting declaration that will cover individual drivers for up to six months, covering all journeys he or she will make in each country during that period. In other words, the start and end dates of a posting declaration can be set to a maximum of six months after which point a new declaration will have to be made. Regardless of the length of time that a declaration covers, all drivers will need to have a physical – or digital – copy of their declaration on them for the duration of their journey to present, if requested by the authorities.

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The Overall Profitability of The Freight Economy

Let’s start with the broadest answer to what affects the freight economy. How profitable is it to hire freight trucks over parcel van drivers, trains, planes, drones and so forth? There is an obvious degree of supply and demand involved, but on the whole, will it cost companies less to send things by freight truck than by other transit methods?

Typically, the best prices are paid when demand is higher. New factories, new buildings, urban regeneration, and surges in consumer spending will all benefit the freight truck industry. The USA has an $800 billion dollar freight truck industry because the US economy often has the sorts of peaks and lulls that benefit freight trucks. The USA also has something else that makes trucking a big plus. They have lots of flat land.

An advanced road and motorway system like that of the UK is a big benefit to trucking, but the most desirable element within any country is lots of flat land and straight roads. These offer a very big benefit for any sort of trucking and haulage company.

The Local Terrain and Weather Conditions

Trucking is a big part of the US economy because there is a lot of flat land in the USA. It is far easier to lay and maintain roads than it is to lay train track across vast plains of flat land. As a result, trucking is easily a big part of US commerce. On the other hand, in places like Russia or Canada, things like trains and smaller vehicles are used because road and weather conditions do not suit a strong reliance on trucking. On a similar note, places like China and India rely more on trains because of their uneven terrain and because there are far fewer areas with long stretches of road that would suit a strong reliance on freight trucking.

But wait, doesn’t China have the second-largest freight trucking industry in the world? Yes, it does, and yet it is only half that of what the USA has. In fact, with the modernisation of Chinese train systems and docking systems, trucks are being relied upon less and less in China.

The Supply of Freight Haulage Truck Services

This article touched upon demand for freight trucking, such as when the economy is going through a peak time, or when there are buildings being erected or areas being regenerated. However, supply also has a very strong influence on the profitability of trucking companies. The more trucking companies there are, the less profit freight companies have to make. Yet, there is a weird micro-economy that exists in the haulage industry.

When the economy is booming, haulage companies spring up like weeds in a garden and lots of people make lots of money. The barriers to entry are pretty low because all you need is a commercial trucking license, insurance and a truck, and you can start your own trucking/haulage company.

Yet, when things cool off, the industry seems to shed its poorer performers like the snake moults its outer skin. Running a freight trucking company is very expensive, and most smaller to medium-sized companies cannot last very long during a recession. Where supply is obviously a big issue for freight trucking companies, it is a seemingly short-term (in the moment) concern that probably won’t bother long-established haulage firms very much.

The Economic Demand of Each Country

The GDP (Gross Domestic Product) of a country will have a big impact on how well a freight trucking company does. The two biggest trucking economies in the world, the USA and China are great places for haulage companies for very different reasons. In the USA, there is the infrastructure and plenty of profit to be made. In China, the pay rates are terrible, but the amount of work available is so high that some companies never experience a lull in trade.

Trucking Demand Cycles

Let’s pretend there is a country that only deals with farmed food. They don’t run it through their factories. They don’t even prepare it, they just farm it and ship it out. In that case, the trucking demand cycle sees most of the year where trucks were not needed, with short bursts of high demand as fields are planted and harvested.

Now consider a country that only produces oil. The oil wells have to keep producing oil even if nobody wants to buy it. They can’t just switch off the oil wells. As a result, this country would see a permanent and constant demand for trucking services.

Driver and Truck Capacity

This is another factor in the area of supply. Let’s say that the UK imposed a new law where lorry drivers needed to take a new and more difficult driving test. At that moment, the demand for trucking would far outweigh the supply. On a similar note, if there were a shortage of drivers due to union rules making driver pensions too expensive, then this would create a short supply that would affect the freight trucking economy.

A similar thing happens if there is a shortness of trucks, wagons or suitable equipment. These sorts of things sometimes happen when there are strikes, pandemics, fuel restrictions, or when a large project is being undertaken. For example, trucks were in very short supply after the 9/11 Islamic terrorist attacks on the USA because so many were dealing with cleanup and rebuilding. The number of available trucks went down temporarily as they were tied up with these issues, and this affected the freight haulage industry economy for a short while.

Durable and Non-Durable Goods

If an area has lots of non-durable goods it needs moving, then trucking companies can charge more, especially since they are taking bigger risks because there are plenty of things that can interrupt a delivery. Disruption in non-durable transit for things like fuel and clothing is not so bad, but perishable things like food can result in a complete write-off for the trucking company, which will have to make a claim with its insurance company to recoup its losses.

On the other hand, things like furniture, large appliances and cars are durable goods. If an area is awash with those and it needs them shipping, then trucking companies can charge less but have the added benefit of more optimised loading. Half-empty trucks are far rarer with durable goods, so there is plenty of money to be saved.

Consumer Spending

It is no surprise that the USA has the biggest trucking industry on the planet and that 70% of the GDP of the USA comes from consumer spending. We all know that when people are spending, then warehouses are being filled with goods and trucking companies are in high demand. Interest rates have an effect on how people are spending, but the market itself is the biggest determiner. Consumers may want something, they may have the money for it, but if the market says they can’t have it, then it isn’t going to get shipped.

Industrial Production and Inventories

This is related to the previous point. The funding may be there to create a certain product, but if something is holding up production (such as a missing component), then production slows down and far less gets shipped.

How much stock companies decide to hold, how they intend to release it, and how they manage it, will all affect the freight truck economy. There has always been companies that are so big that if they decide to stockpile or sell off it will directly affect the freight truck economy. However, the planet is now owned by Amazon and its product supplier China. If Amazon decides something is going to be popular, industrial production ramps up, inventories fill, and trucking companies see a lot of business.

Fuel Prices

Yes, we have to mention it, fuel prices do affect the haulage industry as a whole. Still, where fuel prices can push freight truck companies out of business, it is only a short-term problem. The cost of fuel price rises is always passed onto the consumer. The thing about fuel prices is that it is a national problem. When haulage company X has to raise its prices because of fuel costs, then haulage company Y and Z have to raise their prices by the same amount too. The merchants then raise their prices, and the consumer ends up being the only one out of pocket.

Events and Incidents

Fuel strikes, eco-policies affecting trucks, pandemics and global component shortages. Everything from earthquakes to nationwide lockdowns, there are plenty of events and incidents that affect the freight trucking economy. Yet, even though some incidents can have effects that last for years, under most circumstances, these events/incidents only have a temporary effect on the freight/haulage industry. Either things go back to how they were, or the industry adapts as a whole.

How Many Other Factors Exist?

There are too many to count, namely because they vary by company and by country. The factors change over time, they shift, and you have to remember that the haulage/shipping industry is also shifting and evolving over time too. Factors come and go, from technologically advanced trucks that use less fuel, to education systems making it more likely that people will take up a career in trucking. There are many factors that affect the freight trucking economy. The ones listed in this article should give you a fair idea of some factors that can have the biggest impact.

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In the main, shipping goods from the UK into the continental EU has caused some headaches for exporters as they have often needed to upgrade their processes. The only exception to this is in Northern Ireland where goods in transit between the North and the South remain unhindered by the same customs rules. For couriers and owner-drivers, sorting out export paperwork so that goods can get into the EU is not something they have to worry about, generally speaking. However, the knock-on effect of having so many more inspections and paperwork checks taking place close to or at the border has caused significant delays for hauliers of all types – both large and small operators.

To be clear, the numbers of road freight shipments heading to and from the EU over the English Channel hasn’t changed greatly in the last twelve months. What has caused delays, however, has been the number of checks that customs officials have needed to make. And when export documentation hasn’t been quite right, these have not been cursory checks, either. Anyone who has driven from the UK to Europe for work has had to get used to longer than usual queues as often overworked customs officials and port authority workers have struggled to keep road haulage routes operational. However, recent news from the European Parliament may mean that the situation with road haulage and couriered freight may soon get easier – or less costly, at least – for drivers once they have got through the current bottlenecks at Dover, Folkestone, Newhaven and Portsmouth.

In February, the European Parliament approved some proposed rule changes for the way in which road haulage and couriered freight would be allowed to operate within the trading bloc. This will affect all of the owner-driver operators within the EU but also change the way British drivers can access European roads. The approval of the European Parliament does not necessarily mean that the new rules will immediately apply, however, because member states can review them within the next two-year window. That said, many in Brussels now expect road haulage to become a more affordable option within a matter of weeks thanks to the overhaul of the system used to charge road haulage operators and van couriers. So, what are the proposed changes exactly?

Firstly, under the new rules proposed by the European Parliament, road charges for commercial vehicles will move from their current charging system. For some time, this has been a time-based system that is predicated on the concept that the more a vehicle drives, the more it pollutes. However, this does not take into account the distance that might be travelled within a given time frame, something that is especially important to drivers who are held in slow-moving queues as they wait to access ports like Calais or Dunkirk, for example. Instead, during a plenary session of the parliament, a move to a distance-based charging system is now expected to come into force. According to some involved in the discussions, this move will make the polluter pays principle that the EU wants to promote work better in the foreseeable future.

In the last parliamentary session, politicians in Brussels gave the green light to make the necessary legislative changes in an agreement that has been struck with EU governments across the trading bloc. Importantly, the update on the rules – ones that set out exactly what sort of charges member states can impose on road haulage companies and van drivers – could mean alterations to current road tolls by as soon as mid-March 2022. It is not just trucks, lorries and vans that are likely to be affected by the changes as new charging systems are introduced by member states, either. Bus, coach and even passenger car drivers using trans-European transport network roads are all likely to see different and potentially fairer toll charges being applied for accessing the fastest and most economical routes.

As many drivers who make their way through continental Europe will know, some countries, like France, do charge quite high sums to access their autoroute networks while other states levy lower fees and some nothing at all. Under the rule changes, EU member states will not be forced to charge commercial vehicle drivers to access their trunk roads. Nevertheless, once fully ratified, any country within the EU that wishes to introduce such fees – or to change their current charging system – will need to follow the new EU rules based on distances travelled rather than time spent on the road.

In several European Union countries, the current road charging system uses the time-based model, something that tends to be referred to on the continent as ‘vignettes’. The idea behind the move from vignettes to a miles-driven system is not only to better reflect the polluter-pays or the user-pays approach, however. Another idea behind the move is to stop penalising drivers for taking breaks on their journey to access roadside services. Under the vignette system, time was the guiding principle for drivers meaning that, in effect, drivers were economically encouraged to continue driving even if they would be better off taking a break. As such, the shift in charging emphasis is also being hailed by some in the EU as an important safety measure that will not just benefit road haulage companies and couriers but all road users.

Although MEPs have now secured the new rules that mean members states can start making changes to the old vignette system soon, there is no way the Parliament can force changes in the immediate future without a further review. Nevertheless, it is expected that most European countries will start to phase out their vignettes for heavy commercial vehicles, such as trucks, lorries and buses, across the main parts of the trans-European transport network within the next few years. Much of the trans-European transport network that lies in the periphery of Europe is rarely accessed by UK-based drivers anyway. Therefore, the bulk of the expected changes are expected to affect British drivers working in Europe sooner rather than later. For example, the North Sea-Mediterranean corridor is likely to be one of the first major parts of the trans-European transport network to see these changes introduced. In some places, it may be possible for member states to still retain distance-based vignettes for specific parts of the road network. To do so, however, they will have to prove that a new charging method would disproportionately affect their expected income stream, something that is only likely to affect Eastern European haulage routes, according to industry commentators.

Van drivers can expect some different rules to apply depending on where in Europe they are delivering or collecting consignments, too. Under the new regulations, vignettes will still be valid for vans but for shorter periods of time, perhaps one day, one week or even as much as ten days, depending on the location. Some member states are likely to introduce price caps that can be applied to both private van owners and passenger car drivers. The idea here is to try and make sure that occasional drivers are treated fairly throughout the EU and that only frequent commercial users of the road network pay the largest toll fees. Under the new rules, EU states that are willing to charge lighter vehicles – like vans and minibuses – differently from the system for lorries and trucks will still have the option to choose between time-based or distance-based charging models.

According to one MEP involved in the changes, Giuseppe Ferrandino, the elimination of the vignette system for heavy road vehicles, at least, will allow the EU to standardise its system for charging commercial road users that is currently excessively inconsistent and fragmented. Mr Ferrandino went on to say that he thought the changes would encourage the world of road freight to invest in the use of cleaner vehicles with the latest green technologies in the near future. In a similar move, EU countries will soon have to also set different road charging rates for trucks and buses based on their carbon while the environmental performance of vans and minibuses will affect the way they are charged from 2026 onwards.

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