In common with much of the north of England, trucking and haulage is a major industry throughout Yorkshire. As a whole the north is known as a ‘super region’ when it comes to freight as it accounts for around 1/3 the UK’s road, rail, distribution and port activity. The Port of Hull plays a key part in this, handling around 10,783,000 tonnes of goods annually according to Associate British Ports (ABP) data. With ABP having announced a £50m investment in the port in April 2017 with the aim of doubling its container capacity, the future for this essential industry looks extremely bright and this should lead to greater workloads for the area’s truck and haulage sectors. Our experience certainly bears that out, as we’ve seen a marked rise in the number of truck insurance quotes over the last year or so.
Underlying this mood of cautious optimism there are, however, concerns; concerns over the effects of Brexit, questions as to why truck insurance premiums have risen and what the impact of the increasing pressure on diesels will mean for the industry. In this latest blog from Coversure Hull, the truck insurance specialists, we’ll look at these issues in turn and consider what the next few years may hold.
Not a day goes by that we don’t hear more about Brexit. As the government moves into trade talks and our future relationship starts to become clearer (or so we hope!), so we’ll see if the 58% of Yorkshire’s, and 66% of Hull’s, residents who voted leave in the expectation of a brighter future will see their hopes realised. For the haulage industry, our relationship with Europe matters hugely: after all our exports to the EU are valued by the City of London Corporation at £148bn per year – an absolute truckload in anyone’s view.
Obviously, any loss of access to that market post-leaving could prove costly – especially if firms are to be hit by long waits in customs once we leave the Customs Union. There is a great deal of optimism though that post March 2018 things will be even better. ABP’s investment decision was made long after the referendum and was based on the recent growth at its northern ports – Hull and Immingham have grown by 41% since 2013 – and if we are to look to markets beyond Europe, especially to India and China, then ports such as these will be invaluable.
One other area of concern that Brexit has already affected is the lack of qualified drivers. The Traffic Commission estimates that there’s a shortage of around 45,000 drivers in the UK, and that figure is rising at a rate of 50 per day. Add in to that the fact that there are 60,000 foreign drivers working for UK haulage firms and that EU national migration hit a decade-high in February 2018 and we could have an even more serious driver shortage.
Given the value of trucking and haulage, £124bn according to the Road Haulage Association, it seems unlikely that the government will sit back and do nothing. Calls are already being made to reduce the training and licensing fees from their current levels of around £3,000 and for the government to invest £3.5m into apprenticeships, an investment that would save £30m in the long-term.
As with so much with Brexit, a lot is still open to speculation. But given the industry’s importance to the UK economy, its importance the idea of the Northern Powerhouse project, and the government’s stated aim to make the UK a leader in global trade, surely this is a sector they will seek to support.
If you drive any sort of vehicle you’ll have noticed that during the past year that your insurance quotes may have been on the rise. Truck insurance premiums have been no different and there are several reasons for this, including uncertainty over Brexit, the falling pound and rising inflation rates, but the single biggest cause has been changes in the Ogden Rate.
Pre-February 2017 most people had never head of the Ogden Rate. Even people in insurance circles were only vaguely aware of what it was and what it did, but when the government announced it was changing it from 2.5% to -0.75%, anyone insuring a vehicle learned what it was as their insurers tried to explain the hikes in their premiums.
So, what is it? Well, simply put the Ogden Rate is the method by which the level of compensation a person who suffers personal injury receives over their lifetime is calculated. The massive change the government made spooked insurers as they saw the amount of compensation they were liable to pay rise sharply, so they increased premiums to protect themselves and up went motor insurance quotes.
The change kicked up a massive storm and they were forced into a partial U-turn, one that means the rate will be reviewed at least every three years and with a predicted rate rise to 0% – 1% as the investment risk is revised. This should mean that in the coming years insurance quotes, including truck insurance quotes, will fall again.
The Death Of Diesels?
Diesel vehicles of all kinds have come under huge pressure since the VW emissions scandal. As the government battles to fulfil its commitment to clean air and to usher in a low-carbon economy so diesel vehicles have become the target of higher fuel duties, plans to ban them from city centres including London, Oxford and Nottingham by the early 2020s and an outright ban on new vehicles being produced by 2040. With the average 4 tonne truck producing over 150 times the emissions of a standard car, lorries and HGVs have been right in the firing line.
Diesel is, of course, the standard fuel for trucks and any sustained increase on already high fuel costs or a restriction on where they can operate is not good news. Car drivers can avoid these issues by simply choosing a petrol, hybrid or electric vehicle, but it’s not so simple for hauliers. While Tesla, Daimler and a few other manufacturers have electric trucks on the market, these aren’t mainstream yet and questions around range and the number of charging points remain.
Significant as the issue of air pollution is, this looks like another area where the government is going to have make allowances for hauliers. As we’ve said they can’t simply switch and given that the Society of Motor Manufactures And Traders (SMMT) recently reported a rise in emissions for the first time in 10 years owing to car buyers shunning new, clean diesels in favour of keeping older models on the road as of costs, it may well be that a re-think is on the way.
Trucking In Yorkshire: A Bright Future?
While there’s uncertainty and challenges ahead, we believe that trucking and haulage in Hull, Yorkshire and indeed the rest of the north is looking good. ABP’s investment, Siemen’s new £200m rail factory and the possibility of vast new export markets post-Brexit giving all of Yorkshire’s ports a huge boost.
Like Some More Help?
If you would like to know more about getting truck insurance cover or would like some help getting the truck insurance that’s right for you, then please contact us. You can call us free on 0800 977 6037, email us by clicking here or get a no-obligation truck insurance quote here.