Select Committee on Trade and Industry Minutes of Evidence

Supplementary memorandum submitted by The Road Haulage Association Ltd

  I have been giving the matter of over capacity in the haulage industry some further thought, especially as this issue occupied some time at the recent hearing.

  The DETR have come up with a figure of 20 per cent over capacity but none in the industry know how this figure was arrived at. During my session with the Committee I pointed out that in such a diverse industry as road haulage embracing as it does tippers, bulk carriers, refrigerated vehicles, tankers and general haulage it would be very difficult to identify where endemic over capacity exists. Coupled with the monthly and seasonal cycle of the industry and this makes it even more problematic.

  In discussions with colleagues I believe that if the 20 per cent figure can be substantiated then such a percentage is not really excessive. In any commercial free enterprise activity there is always going to be some degree of over capacity. The airlines, high street supermarkets, the drinks industry, motor manufacturers, all are examples of sectors that have a theoretical over capacity. The railways too suffer from this with excess capacity at off peak times yet they have to be equipped to cater for maximum demand at peak periods.

  There seems to be a growing trend amongst economists that the industry's travails are simply due to over capacity. We do not believe this to be the case. The high price of fuel based upon world oil prices and the highest level of fuel duty has strained the haulage industry's ability to fund supplies. This is the root core of our problem.

6 November 2000

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