Each year in October the Traffic Commissioners (TCs) produce a report to the Secretary of State for Transport in which they summarise their performance to date and set out their strategic plans for the near future. The report also contains detailed statistics on the operator licensing system and items of concern to the TCs. In this article Richard Smith looks at the state of the industry shown by the data and the issues of concern to TCs with respect to road haulage.
Value of the Haulage Industry
The overview at the start of the report makes plain the reliance of the country on road haulage by UK-registered vehicles: 78% of goods are moved by road, amounting to 147 billion tonne kilometres domestically and 5.4 billion tonne kilometres internationally. Freight transport is the fifth largest employer with 2.54 million people employed in haulage and logistics, including 309 000 drivers. The industry is worth £124 billion in terms of gross value added to the economy.
Shape of the Industry
From the statistics provided in the report it is possible to get a view of the industry and its evolution over time in terms of numbers of O-Licences and vehicles.
Numbers of Licences in decline
The total number of licences in issue fell again in 2019, continuing a decade-long trend. The number now stands at 70,763 for all types of licence, a drop of some 7000 (19%) since 2010–11. Within this total, just over a half are restricted licences for own-account operations, about 12% are international licences and the remainder (just under 40%) are national. This split has remained constant over the decade with falling numbers common to all three licence types.
Vehicles on Licences
While there may be fewer operators, there are more vehicles in use and the total number (373,575) is the highest this decade. Of these, the greatest proportion by far (52%) is on national licences with the remainder split fairly equally between own-account and international hire and reward operations. Comparing the number of vehicles on international licences with the number of authorised copies of Community Licences, however, shows that only 40% of those vehicles are actually being used in international traffic. This is a fall from 47% at the start of the decade and comes from both an increase in the number of vehicles and a decrease in Community Licences.
Vehicles per Licence
From the data it is only possible to calculate an average fleet size and this obviously disguises the fact that there is actually a very large number of small fleets and a small number of large ones. Nevertheless, the average does provide a means of comparing over time. Overall, the average (just over 5) has been rising consistently since 2013, largely due to a significant, and continuing, rise in the average number of vehicles on national licences, from 5.5 to 7.5.
The average vehicles per international licence seems to have topped-out at 10, having also risen, from 8.4 over the period.
The average number of vehicles per restricted licence remains fairly constant.
What Does the trend mean?
Taking number of licences and number of vehicles together it seems that a trend for a reduction in the number, but increase in the size, of fleets is taking place, indicating consolidation in the marketplace with fewer operators running bigger fleets.
This would not be unexpected in a quality licensing environment where the weaker players will fall out of the reckoning and the stronger ones will expand. From the available data, though, we cannot say whether the reduction in licences is caused by undertakings leaving the market altogether or simply retrenching and concentrating on fewer operating centres.
Licences are issued on a Traffic Area basis and one operator with operating centres in three different TAs will have three licences. If that operator closes two operating centres and concentrates all the vehicles at the remaining one that will be recorded as a fall of two licences but the business continues much as before. Certainly the number of five-yearly continuations sought has been increasing for the last two years, as the number of continuations not being sought has reduced significantly. This may well indicate that those operators who came into the market (or continued an existing business) five years ago are more likely to be sticking with it.
The overall fall in licences is due to a fall in numbers of restricted and national licences; the number of international licences barely changes year-on-year and is now actually higher than in 2014–15, although the actual numbers are still relatively small at around 12% of the total.
Although the average number of vehicles on national licences continues to rise, there are still twice as many vehicles per international licence despite that fact that comfortably less than half of them seem actually to be used internationally. This provides a pointer to the number of ECMT permits that might be needed should they become necessary.
TCs have six disciplinary actions available:
disqualification of the licence holder
disqualification of the transport manager.
Use of the six options appears to be split into two groups with the first three options above being used more frequently and the second three options less so. Nevertheless, in 2018–19 all of these rose sharply compared with the previous year.
All of these numbers do tend to vary markedly one way or the other from year to year, perhaps reflecting the timing of public inquiries across the year end but it is still possible to detect general trends from a graphical presentation.
Disqualifications and suspensions
In particular, disqualifications of both transport managers and licence holders were at an all-time high, as were suspensions of licences. Both types of disqualification were already on a rising trend since 2010 and transport manager disqualifications continued the sharp rise seen in the 2017–18. Suspensions had been falling slightly since a peak in 2012–13 but rose again in 2018–19.
Curtailments had been on a generally level trend but the increase this year takes the figure to the highest since 2010. Revocations and formal warnings had been showing a falling trend, but rose sharply in 2018–19, though they remain substantially below the levels seen in the early years of this decade.
Given the tendency for these figures, and particularly those for curtailments, suspensions and formal warnings, to show marked variation from year to year, it remains to be seen whether the latest data represent a significant change in trend or whether they are simply a result of public inquiry timing.
Lessons for Operators
The combined report from the TCs for the English Traffic Areas has a number of lessons for licence holders and transport managers, particularly in view of the comments above on enforcement.
Some years ago, the TCs asked operators to take urgent action to carry out more meaningful testing of braking systems and the recording of results. Although there has been a reduction of almost 10 000 in the number of failures for service brake performance on the annual test the 22 000 failures that did occur means it continues to dominate the reasons for failure. There is therefore still much work to be done to ensure that effective brake tests are carried out, the results recorded properly and, critically, that technicians and operators interpret the results correctly.
Non-compliance issues relating to effective management continue to be a constant at inquiries. Issues identified include:
Ignorance of the fact that an O licence is not transferrable when a company changes its legal form or business name.
Transport managers being left to get on with the job without any checks on their performance or, in the case of external managers, the time spent.
Out of date maintenance report forms continuing to be used and inadequate (or non-existent) driver defect reporting.
Inadequate (or non-existent) downloading and analysis of tachograph records with little or no follow-up of infringements.
Regular checks of drivers’ licences not being made.
Unacceptable number of bridge strikes with route planning seemingly left to drivers with no access to information.
Drivers given “self-employed” status as a means to avoid paying National Insurance and pension contributions.