Interview with Tony Shally. M.D Espace Europe, a European road freight specialist.
Question : How did you feel now 5 months on from the Brexit referendum.
Tony : As the owner of a European road freight company, we rely on the free movement of goods within Europe and a strong Pound to keep our haulage costs down. The 24th June was a very grim day for me, my staff and for the majority of people working in our industry. I feel a bit more positive now. Well I couldn’t feel any worse than I did that day. We have weathered a difficult 5 months and still hit our targets but I know there are tough times ahead.
Question : What’s happened in the European road freight industry since Brexit and how has it affected Espace?
Tony : Our customers have told us that they have been getting more enquiries from their European customers and from new prospective customers. They sent out a lot of quotes and seen some small short term increases in export business.
In the 5 months since Brexit, we have seen a 7% increase in export shipment numbers compared to the 5 months before Brexit. There’s been a very small fall in import shipment numbers for us. We are mostly export driven.
As we pay over half our suppliers in Euros, we have seen our European haulage costs rise dramatically due to the 10% reduction in the value of the Pound against the Euro. We hedged our Euro currency purchases well the day before Brexit, but we have now pretty much used up this pre-bought currency.
Many forwarders did not hedge and within a few weeks had Currency Adjustment charges in place. We currently have a range of CAFs from our suppliers between 6 and 10%. Even though we hedged well, our margin has dropped by over 3% as a result of the weak Pound.
We’ve been speaking to some of our customers to see if they can now pay us in Euros. A few have agreed but most don’t hold an excess of Euros each month so have asked to stay with a Sterling charge from us.
We are now also speaking to some of our customers to try to implement a currency surcharge. Most are sympathetic, but it does not stop some going out on the market to look for cheaper solutions. It’s even worse for our import customers. Their goods are costing them 10% more now to import and we are asking them for increases to cover the increases in our import haulage costs. With import charges approximately double or even triple the export cost, these surcharges can mount into the £100s per import full load.
Question : How optimistic are you about the future for European road freight and how do you think it is going to be affected if we leave the Single market?
Tony : Espace and our competitors are all in the same boat. Companies will still need to get their goods to and from Europe by road. If we lose the free movement of goods, we are all going to get bogged down again in customs issues potentially slowing down the delivery of our customer’s freight. I am concerned about the effect the triggering of Article 50 will have on our industry. We have had nearly 24 years of free movement of goods across European borders. Many European supply chains have been geared up to work on a Just in Time basis.
Drivers haven’t had to stop for long periods of time at border crossings and customs agents. Many exporters and importers now just hold some emergency or minimum stock levels. What they need to keep production going arrives on our trailers when they need it. We could pretty much guarantee this would happen. With 25% of our business now in the European time-critical sector, if we are forced to revert to how it used to be with all goods needing to be customs cleared, there is no way we can provide any guarantees anymore on deliveries. We will be in the hands of the customs agents and border officials as to when our vehicles are released.
Also, the Pound’s volatility is a big concern. With growing concerns about what might happen and no clear Brexit plan 5 months on, I can only see the Pound plummeting further in value. Freight rates will shoot up again, customers who once valued service over price may be forced to buy solely on price, cutting out companies like Espace who sell on value-added. The biggest companies with the biggest buying power will at a considerable advantage, if rate sensitivity becomes a real issue.
I just hope our politicians realise sooner rather than later that Europe won’t let us have our cake and eat it. Free trade and 100% control on immigration will both not be granted to us. We need skilled and unskilled people to come into the UK to help our economy grow. We don’t need bureaucratic customs procedures imposed on us after 24 years of free trade. It will be a disaster for the UK and Europe, after all if they do it to us we will do it to them. I just hope sense prevails and our politicians are ready to make compromises to get us the best deal we can to maintain the status quo, encourage investment and keep our currency stable.
Interview with Tony Shally : M.D Espace Europe Ltd www.espaceglobalfreight.com
In recent weeks, it has been brought into question whether the EU is a global leader in Climate Diplomacy. It has been brought to light that the EU still adopts an outdated vehicle emissions test. This doesn’t look great when put together with their extremely slow pace when introducing new CO2 regulation to minimise the ever growing road freight emissions.
Road freight trucks only make up for 5% of vehicles on the road in the EU; however, they contribute 25% of the emissions from road transport. Freight trucks consume ten times more fuel per kilometre when compared to passenger vehicles.
How does the EU look to fix this emission disaster?
Well the EU has developed a simulation tool called VECTO which will measure the emissions of new vehicles. It will be used as the basis of drafting legislation proposal which will be finalised by the end of the year.
Fuel consumption could be cut by trucks if manufacturers applied design improvements and low resistant tires. The lower fuel consumption of trucks will lead to less road freight emissions
Is electric the Future of Freight?
Mercedes-Benz and Daimler Trucks launched an electric truck called ‘Urban eTruck’ which at the moment is just a prototype, but it is capable of doing 200 kilometres a day. Other manufacturers have announced that they will be looking to develop electrical, heavy duty Vehicles.
So what other benefits are there of having electrical powered freight trucks? The electric trucks are cheaper to run when compared to petrol trucks. This will help anyone who uses European haulage companies since they will most likely pass these savings on to their customers.
Reduced noise pollution is also a benefit which comes with electrical powered trucks. This will get rid of one of the main externalities of the use of trucks. This will decrease the social cost of trucks running on the road.
Weight : 5700 kilos Length : 15.17m Width : 4.5m Height 2.5m
Here at Espace we specialise in European Road Freight and we see lots of shipments being delivered on time. Here is one of the more Abnormal loads we delivered last week. Last week we delivered 2 aircraft wings on an extendable flatbed trailer from Austria to Peterborough. ( photo shows the wings on our trailer at our partners depot in Holland.)
Transit permits needed to be applied for, but we had these in place within a few days. The trailer was accompanied by an escort vehicle from Austria to Holland. We shipped the trailer from Hook of Holland into Harwich where another escort vehicle was waiting to accompany it onto Peterborough.
If you have any European flat bed or abnormal load requirement, please send your enquiries to Geoff Yates.
Direct Dial : 01543 412306 Email : GeoffYates@espaceglobalfreight.com
French trade – “Liberté, égalité, fraternité”
“Liberty, equality, fraternity”, the national motto of France speaks volumes about the country and the major part it plays in Europe and across the world. Holding the title as the leading exporter of services and agriculture in the world, France provides 18.1% of European agriculture production and looks to remain a leader in service and agriculture exports for many years to come. But what do they export? What do they import? Find out a bit more below as we take a look at the European Championships Hosts in more detail.
Every year the French eat around 30,000 tonnes of snails but only 1000 tonnes of these are sourced from France. That’s right, 29,000 tonnes of snails are imported in to France every year with a majority of them coming from field within Eastern Europe. It is against the law to carry live snails on a high speed train in France without their own tickets!
Your very own Dairy Godmother!
France is the second largest milk producer in Europe. During 2012 France exported €6.9 Billion worth of dairy products.
Teamwork makes the dream work!
France is Germany’s largest trading partner.
Their Primary Export partners include Germany, Belgium, Italy, Spain, UK, US and the Netherlands.
Their Primary Import partners include Germany, Belgium, Italy, Netherlands, Spain, UK and China.
Trains, Trains, Trains!
France has the second largest rail network in Europe. (29,000Km)
The main imports to France include machinery and equipment, vehicles, crude oil, aircraft, plastics and chemicals.
The main exports from France include machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages, services and agriculture.
DID YOU KNOW?!?!
Earlier this year we delivered 200 tonnes of turf to the Stade de France earlier this year???
The grass is greener with Espace’s Intelligent International Shipping!
With this in mind France are a country you need to be importing to or exporting from regardless of the industry sector you find yourself in. As a leading power both in trade and politics France will remain leading the charge for many years to come. Liberty, Equality and Fraternity are all morals which make up the Espace Europe LTD DNA. Working hand in hand with our long standing relationships with hauliers in France, we are able to provide a variety of impressive prices, such as:
- 20 Kilo parcels to anywhere in France from as little as £25.
- 1 Tonne pallets from London to Calais from only £95.
- Full loads from Aberdeen to Nice for £2065.
Small or big, near or far, in or out we’ve got it covered. With four native and/or fluent French speaking colleagues here at Espace, we’re more than prepared to help with your freight needs.
Tony & The Espace Team
Over the last few months this series has aimed to explore and discuss various issues surrounding the upcoming referendum. While trying to remain impartial the focus has been mostly on the effects to various industries and the positive and negative outcomes which could come from both remaining in the European Union and leaving the European Union. This final installment focuses on the overall pros and cons of a possible British exit, ending with a brief summary.
Run while you can! ( The pros)
- The European Union has reached a huge scale with more and more countries joining during its duration. In the event of a British exit, focus would be solely upon the UK.
- New trade agreements. Were Britain to leave the EU, it would have a strong possibility of obtaining similar trade agreements to those used by Switzerland and Norway.
- Cut down on costs. Although there are a lot of financial benefits to being in the EU, upon leaving Britain would not be required to pay as much in costs towards the EU, saving about 7% of the NHS budget yearly.
- Self-investment. In the case of leaving the European Union, Britain would have no choice but to dramatically improve and invest in its own manufacturing and exports, ultimately aiming to become self-sufficient.
Won’t you stay another daaaaayyy? (The cons)
- Financial sectors would be hit hard. In the event of an exit, the UK financial sector would take a massive beating and would probably end up losing its position as one of the best financial sectors in the world.
- Nothing is set in stone. If Britain were to leave the EU, there is no prediction that is 100% accurate. The possibility of a positive or negative outcome relies on both internal and external factors such as other countries, trade agreements and international law.
- Bigger together. Not only is the EU the biggest free trade market made up of over 500 million people but it also gaining a bigger role in global diplomacy, something which will always be beneficial for Britain in terms of negotiation.
- The appearance of isolating ourselves may leave a sour taste in the mouth of other countries making it harder for future trade.
- Although Britain can replicate similar trade agreements used by other countries this would take years to come in to effect and could ultimately damage British industries for the foreseeable future.
As you can see from the positives and negatives listed above, there are many arguments for and against leaving the European Union. We could sit here all day listing them but ultimately the decision isn’t made by lists it’s made by people, in this case the British people! Regardless of the outcome the British freight industry will find a way to continuously improve and help Britain for many years to come, through the good and the bad. We hope you have enjoyed this series and it has helped provide you with an impartial and balanced view on the referendum. As always we love to hear you opinions so please feel free to comment below.
Tony & The Espace Team