Phil MeekinView Profile
It is generally accepted the haulage industry is a good indicator of the economic state of the nation – a barometer industry. When the economy is healthy and expanding, the hauliers are busy. Conversely, when a country moves into recession and its total level of production is shrinking, it is bad news for haulage.
The same numbers of operators are chasing fewer jobs and with supply well exceeding demand for their services, prices are driven down. Large companies find themselves having to cut back by reducing over-capacity. Sounds easy but off-loading vehicles in a depressed market and finding the cash to meet redundancy payments can push companies over the edge. 85% of hauliers are small – running fleets of between two and five vehicles and less than ten staff, so the capacity for cost cutting is hardly an option.
Other very significant factors which crop up and can have a devastating impact –fuel prices, duty and legislation – all of which are outside the control of the operators.
So, if you are a business owner and perhaps have just learnt that one of your major customers has ceased trading you could well find yourself:
· Facing a large bad debt – will your own company survive?
· Having too many vehicles and staff, standing idle
· Not generating enough cash to meet on-going overheads – the situation is deteriorating week by week
· The bank having reached the limit of its assistance and not prepared to increase your overdraft even on a short term basis
Each situation is unique and your company’s circumstances will dictate the best way forward. There are a number of options which may be open to you, which could include:
· Alternative forms of raising money other than the High Street banks, including factoring, re-financing fixed assets or possibly attracting private investors
· Insolvency procedures such as a CVA – Company Voluntary Arrangement, which is a formal way to buy time with your suppliers
Often it is a combination of solutions, tailor-made to suit your specific needs. The best way forward is to seek advice without delay.