The latest business survey by Transport and Logistics Netherlands shows that transport operators are busier than ever this year. The economic upturn has been one of the factors contributing to the increased activity in the sector. The sub-markets benefiting most from economic growth are the ornamental horticulture sector and the transport of building materials. Volume growth is also expected again in 2018 (3-5%). However, in addition to volume growth, the transport sector has more to look forward to in the future. In this article, we would like to share five key developments with you.
Staff shortages
The buoyancy in the transport sector has left many transport operators feeling optimistic. The third quarter of 2017, for example, saw a 5.4% increase in turnover compared with the same period a year earlier. However, this boom also has a downside. Around 40% of transport companies reported staff shortages in the second quarter of 2017. The number of unfilled vacancies is currently at its highest level in the past ten years.
Labour cost trends
Over the next three years, transport workers’ wages will be increased by 10 per cent. The transport sector currently employs around 130,000 people. The two collective agreements that were in force – the KNV collective agreement and the TLN collective agreement – will be merged, and wages will then be increased in stages. Of all cost items, labour costs account for the largest share of the total cost of transport. For this reason, an increase in labour costs will therefore have a significant impact on operating profits within this sector, where margins are already under pressure. VWGNijhof supports this by making profitability transparent and actionable.
Automation
The sector already had a number of frontrunners in the field of automation, but now it is time for the rest of the sector to move with the times. This is because the sector is facing ever-increasing demands in terms of speed and costs. High-quality ICT and automation are therefore now an absolute must. Sustainability and improving efficiency are key priorities for 2018 and beyond. Using our method for improving returns, VWGNijhof can assess the financial implications of these changes.
Tighter monitoring of creditworthiness
Although creditworthiness used to be officially assessed only once every five years, this monitoring has become stricter in recent years. It will therefore become increasingly important in future to maintain a good credit rating at all times. Companies can improve their creditworthiness by keeping their solvency ratios in order and maintaining a sound payment record.
Ageing population
In no other sector of the Dutch economy is the ageing trend more pronounced than in transport and logistics. The ageing of the workforce is particularly evident in commercial goods transport, inland waterway transport, and passenger transport by road and rail. The proportion of workers aged 50 and over is set to rise from 26% in 2010 to 45% in 2020. The consequences of an ageing workforce are lower productivity and higher sickness absence. This has adverse effects on performance and profitability within the sector. The sector is in need of rejuvenation, and VWGNijhof can help you respond effectively to this challenge.
VWGNijhof takes care of everything
Would you like to capitalise on these developments? If so, please get in touch with Sjoerd Verheijen AA. VWGNijhof is happy to take care of everything for you.