Day: 30 January 2020

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

The company reports that it has already seen growth levels in rental enquiries up to 75% above the same period in the previous year, and that it expects this to continue.

Furthermore, argues head of sales, Dawsongroup Truck and Trailer, Mark Middleton, even allowing for the 11-month transition period, 2020 is likely to see unpredictable freight volumes, and equally unpredictable new vehicle registrations.

“Hauliers are caught in a perfect storm of economic uncertainty, and an infectious level of uncertainty and caution from freight owners,” he says. “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 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,” he says.

Middleton also notes that the cost of ownership could change radically if the purported import tariffs are introduced, meaning the purchasing power of large buyers such as Dawsongroup will be more important than ever in controlling the overall cost of ownership for SMEs. The pound is substantially down against the Euro compared to June 2016, which makes imports more costly.

“If the price of imported vehicles increases by 16%, and we have a weak pound, that could change the whole model for cost of ownership,” says Middleton. “Leasing and contract hire will become not only more affordable, but also more practical and protective than outright purchase.”

Dawsongroup bought more than 460 extra vehicles in Q3 and Q4 of 2019, over and above its normal acquisition cycle, in order to protect its customers from any post-Brexit price spikes. It has also seen a 27% growth in its contract hire business.

The briefing concludes that:

–          The rental market is likely to expand as evidenced in 2019

–          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

–          Vehicles will inevitably become more expensive and Dawsongroup’s economy of scale can help to mitigate this

–          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.

–          Dawsongroup’s strength in vehicle provision is that, unlike many rental and leasing operations, it does not only produce standard and homogenous units, but also creates bespoke vehicle solutions and tailored contracts.

 

The brief is available to download at: https://dawsonrentalstruckandtrailer.co.uk/index/news/vehicle-specialist-says-brexit-may-reform-our-hgv-ownership-models.html

Toyota Industries Corporation (TICO) has been selected for the A-list, the maximum score, in surveys conducted by CDP on climate change for the second year in a row now. Toyota Material Handling Europe, its European operations of the material handling division, has completed activities to reduce greenhouse gas emissions and climate change.

Toyota Material Handling Europe has been continuously contributing to achieve Toyota Industries Corporation’s CO2 targets. One example being the use of carbon-neutral biogas at Toyota Material Handling Manufacturing Sweden in Mjölby, who achieved zero carbon emissions in 2019. The factory is the first of the TICO Group to achieve this, and has been awarded by Tekniska Verken as sustainable company of the year for the many initiatives they have been driving.

Toyota Material Handling Europe hereby demonstrates how low-carbon technology can be both available and affordable for customer companies that are willing to innovate. Receiving the highest rating for the second year in a row shows that these initiatives have been recognised.

“Within our 2019 Sustainability Report, we reported that CO2 emissions from internal operations (factories and sales companies) in Europe have grown by zero % since 2012. At the same time revenues have grown by 54% over the same period, and we are continuing to work towards further reductions. For example, we are committed to buy 100% electricity from renewable resources from 2020 onwards. This will further reduce emissions by 15%,” says Tom Schalenbourg, Sustainable Development Director at Toyota Material Handling Europe.

Toyota Industries´s Sixth Environmental Action Plan

Toyota Industries Group formulated its ‘Ideal state in 2050’ in March 2016 and consolidated its activities for the five years from FY2017 to FY2021 in its ‘Sixth Environmental Action Plan’, which it is currently implementing.

The company is driving the following initiatives based on the above plan:
1. Reduction of CO2 emissions by 10% by FY2021 compared to FY2006 (Toyota Industries)
2. Reduction of the CO2 basic unit for emission by 26% by FY2021 compared to FY2006 (Toyota Industries Group)
3. Understanding and reducing risks related to water resources at each production site

In the future, Toyota Industries Group will continue to respond to climate change as a key issue. Furthermore, the company will contribute to the realisation of a sustainable society through global environmental conservation activities.

CDP (formerly the Carbon Disclosure Project) is a global not-for-profit charity launched in the U.K. in 2000 that promotes reduction of greenhouse gas emissions, and protection of water resources and forests by companies and governments.

The four-way EPAL 7 Half pallet measuring 800 x 600 mm has been developed as a real alternative to the “Düsseldorfer” pallet, according to the European Pallet Association (EPAL).

Designed for a high safe working load of over 500 kg and weighing in at under 10 kg, it is produced in accordance with EPAL’s standards and independently quality tested which makes it extremely durable. In addition, the EPAL 7 is accessible on all sides, thus offering the best conditions for handling with forklift trucks. Six 3-mm thick steel spacers provide the EPAL 7 with additional stability and protect the four-way pallet against damage in daily use. Suitable for automated warehouses, the EPAL 7 Half pallet complies with the ISPM 15 standard and is marked with the “EPAL in oval” logo on the steel spacers. The latest version of the quality-tested EPAL 7 has now been fitted with round central blocks, which substantially improves handling of the Half pallet.

This enhancement of the EPAL 7 resulted from collaboration with EPAL Polska and is in use in many successful test runs with large Polish retailers. Dino Polska, one of the biggest Polish supermarket chains, has already ordered “a large number” while its suppliers are, it is claimed, also interested in the EPAL 7 pallet.

The industrial sector out-performed all other UK property asset classes, partly driven by very strong rental growth in London and key South East locations, according to Colliers International’s annual Industrial and Logistics report. As a result, strong market fundamentals are expected to push the sector forward in 2020 as occupiers focus on streamlining supply chains, it claims.

The report reveals that the sector has witnessed strong rental growth for several years now and, consequently, this is expected to moderate in 2020, although logistics units located in densely populated areas will reach above average returns.

Andrea Ferranti, Head of Industrial and Logistics Research at Colliers International commented: “Supply has increased and now stands at around 36 million sq ft. However, looking at 2019, in which 9 million sq ft of new-build space was completed, the market remains well-balanced in terms of supply and demand, with developers seemingly unfazed by the current economic jitters. In this respect, Colliers’ records show that around 5.6 million sq ft of new supply is currently under construction in January 2020.”

Demand for Industrial & Logistics space in 2019 remained strong with take-up reaching 30 million sq ft for the year, exceeding the 10 year annual average by 17 per cent, but 14 per cent below the record breaking 2018.
In terms of take-up by type of unit, design and build accounted for a 53 per cent share of total, followed by second-hand units at 27 per cent, the lowest share on record, with take-up for speculative distribution warehouses at 20 per cent.

When analysing take-up by deal count and size band, most deals occurred within the 100,000-199,000 sq ft size band. However, over the past three years, we’ve seen the return of the mega box as active retailers and 3PLs seek to capitalise on the growth of ecommerce while reaching greater economies of scale. There has been eight large distribution warehouses in excess of 500,000 sq ft speculatively delivered, or under construction since 2017 and this trend is set to persist.

Based on current market dynamics, total space under offer, and the wider consumer and technological landscape, Colliers predicts that 2020 will witness the release of pent up demand which could translate into a total take-up close to the record-breaking activity of 34.6m sq ft witnessed in 2018.

Len Rosso, Head of Industrial and Logistics at Colliers International said: “2019 was a very challenging year for business planning. Political uncertainty and exchange rate volatility made it extremely difficult for businesses to commit to large capital expenditures. Nevertheless, the sector has been supported by strong occupational demand driven by retail occupier’s requirements to future-proof supply chain operations. In this regard, provisional take-up figures for large distribution warehouses greater than 100,000 sq ft topped 30m sq ft, in line with the five-year average.”

Andrea Ferranti, Head of Industrial and Logistics Research at Colliers International added: “Looking forward, investors will continue to search for yields in a low-rate environment, driving further capital growth for the sector in 2020. We expect London assets to capture most of this upside and the market will see more UK wide portfolio transactions as international buyers look for ways to enter the UK industrial sector.”