Hope on the horizon

Hope on the horizon

Road haulage is a barometer for the economy and has had a torrid time, but there are encouraging signs as Peter Jackson finds talking to Alan Ferguson.

It’s a mixed picture for the haulage industry, depending in which sector it operates according to Alan Ferguson, executive chairman of Fergusons Transport.

Fortunately for his company, it is a major supplier for the region’s automotive sector, which is one area of the UK economy which is thriving, with increased investment and burgeoning overseas sales.

During the downturn the company saw its annual turnover fall from £25m to £20m and profits have fallen from £1m to £100,000 over the past four years. But it has bought a 100,000sq ft unit in Washington to cope with Nissan’s growing inter-site deliveries and `just in time’ and sequential delivery demands

It expects to handle more components for the Japanese manufacturer as it begins production of its new Juke model and the start of production of electric vehicles in 2013. On the back of the booming car sector Fergusons hopes to grow its 300-strong workforce by a tenth in the next 12 months.

“The automotive sector seems to be one sector that’s doing okay,’’ says Ferguson. “The construction sector is more difficult. We work in both but more in the automotive. We are all just very nervous about Europe.

“The main thing is that we have remained profitable throughout [the downturn] and that’s much more important than turnover, you need to have a bottom line.’’

Fergusons Transport was established by Matthew Ferguson in Blyth in 1926. Since then it has grown to be a national company with strategically placed depots, traffic and warehousing around the UK with a portfolio of regional, national and international customers.

Over the years it has diversified into warehousing, logistics, removals, contract hire and business unit rentals.

It has about 120 vehicles and 300 staff. It is looking to develop its £20m property portfolio, which includes Northumberland Business Park West where its HQ is based, as well as 50-acre and 15-acre sites in Sleekburn.

It has also opened a 50-truck lock up off the A19 in Cramlington and a £3m investment in its self-storage arm. In these difficult economic times Ferguson welcomes a recent government move – an announcement by newly appointed Transport Secretary Patrick McLoughlin of a new annual charge for all trucks driving on British roads.

While UK drivers will also pay this levy they will receive a corresponding road tax cut which will leave them no worse off so ending the disparity whereby UK hauliers paid to use roads on the Continent while their European competitors enjoyed free use of the UK’s highways network.

“It’s something we have been asking for for some years just to level the playing field a bit,’’ says Ferguson.

“What we were really asking for was some form of road user charge which is effectively what they are trying to put in.’’

He points to the French system where motorway use is charged but fuel taxed less heavily. I think that’s a much fairer way of doing it,’’ he says.

Fuel prices and duty still remain a big problem for the haulage industry. With lorries achieving perhaps nine or 10 miles to the gallon the cost of running a fleet can be millions of pounds a year.

The problem is worse in the North East which is further from the larger markets in the South and the North East Chamber of Commerce has estimated the region has an extra £85 fuel tax burden. Fuel accounts for about 41.5% of Fergusons’ total costs.

“In Europe diesel is recognised as being essential for business and there has just been a report out saying how much less damage diesel does to the environment than petrol. Wherever you go on the Continent diesel is cheaper than petrol and that’s purely a taxation issue.

“My suggestion would be to put up the VAT on fuel and reduce the duty so the price at the pump would be the same for the general public but business users could reclaim the VAT,’’ Ferguson adds.

He resents the fact that the duty paid by truck users in the UK more than covers the building and maintenance of roads.

“They collect an awful lot of money out of people using the roads and we’d like to see a bit more spent on the roads and I think it’s absolutely scandalous that there still isn’t a motorway connecting London to Edinburgh, our two capital cities.

“For some reason, once they get to Newcastle they think the world has come to a stop. “Even if they said they were going to do it over the next 20 years, they could do a little bit at a time.

“At the moment we don’t even have a dual carriageway.’’ There is, however, a simpler and cheaper move the government could also make to assist his industry, he believes.

“On the single carriageway of the A1 and every other single carriageway in the UK all trucks legally are only supposed to do 40mph. The technology and braking and everything else has come on leaps and bounds in the decades since that law was set and that should be lifted to 50mph.

“Then every car stuck behind a truck on the road would be burning less fuel than if it was doing 40mph so it would be positively beneficial for the environment and there would be fewer accidents from people not overtaking when they shouldn’t.

“It’s a no-brainer and it would be zero cost for the government but of great benefit to the country,” he says. “The government should recognise the benefit we bring to the country by keeping goods moving and keeping the economy going. Rather than trying to get money out of us they should be trying to help us.’’