How Brexit may affect HGV ownership models

Added: 10 February 2020

An executive briefing just released by vehicle specialist Dawsongroup predicts that the traditional acquisition patterns in the haulage industry may be substantially disrupted by Brexit.

The briefing predicts that:

·        Vehicles will inevitably become more expensive

·        The rental market is likely to expand.

·        The leasing market will become more popular with SME fleet operations.

·        Hauliers will see greater benefit in contract hire options which can help them to control spiralling costs.

·        Hauliers will require flexible and specialist vehicle acquisition partners, which can allow fleets to flex assets in a range of ways and with a diverse range of products.

“Hauliers are caught in a perfect storm of economic uncertainty, and an infectious level of uncertainty and caution from freight owners,” said Dawsongroup’s Mark Middleton. “Although the last official figures showed a healthy increase in road freight, Q4 saw much anecdotal evidence of volumes softening across many sectors.  And, of course, the cost of ownership of trucks is likely to increase substantially once the 16% import tariffs are factored in.”

He believes that these factors, plus a host of regulatory pressures including mandatory smart tachographs, Clean Air Zones and ULEZ, will shape buying decisions across the market.

“Traditionally,” he said, “smaller hauliers, with fewer than 30 vehicles have preferred to buy HGVs rather than lease substantial portions of the fleet.  Operating and finance leases have always been at their most popular with the major players in the market.

“However, that could now change.  We think that all logistics companies might find that they are best placed working with a flexible model of ownership, which has the elasticity to meet their needs, allows them to manage credit lines and cash flow, and offers a measure of protection if the market is unexpectedly volatile.”