Revenue is expected to grow as the economy slowly picks up.
London, UK (PRWEB) May 31, 2013
Firms in the Freight Road Transport industry operate on the most extensive transport network of all freight modes, providing much-needed flexibility and the convenience of door-to-door delivery. The industry has also historically offered shorter and more reliable delivery times, and less damage to goods transported than other freight methods. These competitive advantages resulted in huge growth in the share of goods transported by road in the years through 2008-09. The total freight task has increased by about 148% since the 1950s and the percentage of this freight carried by road has approximately doubled in the same time. Today, roughly 60% of all freight goods moved within the United Kingdom is transported by road.
Nonetheless, the industry has faced significant challenges in the five years since 2008-09, including rising fuel prices, lower demand and more stringent regulation. As a result, industry revenue is estimated to contract at a compound annual rate of 4.6% over the five years through 2013-14. High fuel prices created structural upheaval in the industry and the subsequent recession brought lower freight volumes as demand dropped across all major markets. According to IBISWorld industry analyst Andrew Johnson, “after contracting for three consecutive years, the industry returned to growth in 2011-12 as businesses began to restock their inventories." However, despite the gains made in 2011-12, the recovery has stuttered. Revenue is expected to grow by 1.3% in 2013-14 but the industry has not recouped earlier losses. In 2013-14, the industry is forecast to generate revenue of £23 billion, compared with £29.2 billion five years earlier.
The industry will continue to face a number of structural challenges over the five years through 2018-19 as road freight's share of the total freight task declines. Johnson adds, “as both the government and businesses strive to minimise carbon emissions, the industry is likely to suffer." Industry revenue is expected to remain below the 2007-08 peak, but return to modest growth over the five years through 2018-19.
The Freight Road Transport industry has a low level of market share concentration, as the three largest companies are estimated to control just 16.2% of the market. The majority of industry operators are small players. In 2012, the Office for National Statistics estimated that 89.5% of businesses in the industry had fewer than 10 employees, compared to just 0.6% with more than 100. Many operators are owner-operators who serve local niche markets or work as subcontractors. It is generally small businesses that provide short-distance transport services and larger companies that serve long-distance supply chains. DHL Supply Chain Limited is the only major player in the industry.
For more information on the Freight Road Transport industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Industry firms transport all sorts of freight by road. This includes bulk, stock and heavy haulage; refrigerated and liquid haulage; and the transport of cars, waste and waste materials. Packing activities and the operation of freight terminals are not covered.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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