The transport sector is of great importance to the Dutch economy and is sometimes regarded as the backbone of ever-growing consumer demand. This presents a number of challenges in the areas of international relations, the environment, sustainability and digitalisation. The sector is also closely intertwined with other sectors that require a (logistical) process for the physical movement of goods. Although, for example, the construction sector, with its challenges and opportunities relating to nitrogen and PFAS (read more about this in our previous article), which accounts for approximately 20% of goods transported by road, both the ABN AMRO if the ING slightly positive growth in the sector over the coming years.
Increase in scale
Last Friday, 24 January, Nieuwsblad Transport published a Webinar organised on the topic of “Scaling up in road transport”. This discussion, which included Mark van der Drift (CEO of the Cornelissen Group) and Marten van den Bossche (transport and mobility specialist at Ecorys), addressed the issue of sustainability. A trend towards economies of scale is evident in the transport market, with many SMEs (operating 50–100 units) seeking to expand their transport capacity. This is increasingly being achieved through the acquisition of another carrier’s fleet. Given the slim margins in the sector and the relatively low complexity of transport companies, scaling up mainly takes place through asset-liability transactions.
Synergy
In this way, transport operators are seeking to create synergies. Expanding the fleet can, provided there is a suitable customer base, generate sufficient profit margins to cover overheads geared towards digitalisation and sustainability: ‘the overheads of the future’. Smaller companies are currently being forced to operate according to the ‘lean principle’, as they cannot bear the overheads of the future; the financing requirements are simply too great.
In the coming years, medium-sized SMEs will face a growing need to expand their operations; VWG Corporate Finance can support them throughout these processes from start to finish. For small-scale transport operators, the focus in the coming years will mainly be on continuing to operate ‘lean’, building a strong customer portfolio and, in (small) steps, modernising their vehicle fleets and digitising their processes. Our advice on return on investment can offer a solution here; please contact Coen Peeters for further details.