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Freight demand in 2007 good news for Scotland and Northern Ireland

The domestic road freight market remains buoyant so far this year after the busiest festive season since the Freight Transport Association's quarterly market trends survey began in 1996. All regions of the UK are seeing increased demand for freight services with most optimism reported in Scotland and Northern Ireland. All sectors anticipate further growth for Q1 2007, with the exception of manufacturing. The market for third party freight services (hauliers, contract hire and contract distribution) is also seeing steady demand growth in response to increased business activity.

January's QTAS survey also sought to establish the extent to which FTA members had been affected by problems caused by satellite navigation equipment fitted in their commercial vehicles.
It was found that HGVs are more likely to be fitted with sat-navs than vans, with a third of operators surveyed having at least one hgv in their fleet fitted with a sat-nav while only 22 per cent of operators had at least one van fitted with the equipment.
Of the vehicles fitted with the equipment, just over half reported no problems, but for the rest the most common problem experienced was inappropriate route selection (ie road too narrow for the size of the vehicle) which affected just over one-fifth of vehicles fitted. FTA's Economics and Cost Analyst Liz Leroy said, 'Sat-navs are clearly being increasingly used as a valuable operational aid by lorry operators and drivers. However, the number of inappropriate route selections is a worry for the industry and for local residents. Suppliers must clearly work hard to reduce these problems.'

UK-based international hauliers report that the improvement in business conditions which emerged in the second half of 2006 is persisting. The more buoyant market reflects a stabilisation of Sterling against the Euro in a band of EUR1.45-EUR1.47 as well as a steady improvement in the economic growth performance of the major Eurozone economies (although the balance of trade continues to be skewed towards imports, placing foreign hauliers who are on-hand to take on this work at a commercial advantage).

Rail freight operators are also positive about volumes in the early part of 2007, with further increases anticipated in intermodal container traffic as a result of the UK economy's continued reliance on imported goods.

Shippers reported weak demand on all deep sea and air freight routes, especially on the export side. However, freight volumes on import routes from the Far East remain the strongest and fastest growing part of the market.

Skill shortages for drivers and warehouse staff continue to ease. January's survey sought to establish what measures operators had taken over the last one to two years to mitigate this once well-documented problem within the road freight industry. Although the number of migrant workers in the road freight sector has increased since 2000, FTA's October 2006 survey reported that foreign workers still represent a small proportion of the labour market (less than 10 per cent of the total for both drivers and warehouse staff).

Training existing staff as drivers has been the most widespread measure taken by companies, followed by action to retain existing drivers. Where this course of action was taken, the majority of respondents used enhanced levels of pay and more attractive terms and conditions of employment for drivers. Measures taken included paying salaries rather than hourly wages, enhanced overtime rates, more holiday and steady work rather than short term contracts.

The latest FTA Quarterly Transport Activity Survey covering expectations for the first quarter of 2007 is available from http://www.fta.co.uk/information/otherissues/trends/index.htm

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