John Fawcett, CEO of Close Brothers Asset Finance’s Transport division, shares his thoughts about the haulage sector, including trends and demand for finance…
Since the beginning of the pandemic, what’s the trend in finance for vehicles, trailers and related equipment been?
Demand dropped during the first lockdown at the start of the pandemic, but gradually picked up as restrictions lifted during 2020 and have remained strong since, albeit supply issues are currently impacting new vehicle finance levels resulting in the used vehicle market enjoying strong demand.
What impact have you seen on haulage operators and how have you been able to help them?
Many haulage operators experienced an initial significant impact to both work and income in lockdown 1 last year. Since then, those involved in haulage for the high street retail, hospitality and entertainment sectors have had many challenges, while those in the supply chain for most other sectors have enjoyed strong demand and high utilisation of their fleets.
We have assisted those in challenged sectors with payment support and CBILS funding, while providing funding for growth in the fleets of those operators doing well.
Where are you seeing the greatest demand from the haulage sector at the moment – what do hauliers need finance for most at the moment?
Currently, the highest levels of demand in the haulage sector is for larger payload capacity vehicles, from long wheelbase LCVs through to the largest tractor units.
What are the emerging trends for haulage finance as we start to emerge from the Covid crisis?
The need for flexible payment structures to match recovering income streams plus seasonal cashflow peaks and troughs to support the affordability of operators’ monthly commitments.
How would you expect that to affect demand for finance further into the future?
We expect the demand for vehicle finance to remain very strong in the future, particularly where lenders can adapt to customers’ changing needs.
Will vehicle electrification will affect demand for truck finance?
Hopefully when the technology advances to allow for more affordable electric trucks with greater range and payloads along with better charging infrastructure we will gradually see operators and their customers drive toward more sustainable fleets. At Close Brothers Asset Finance, we are ready to champion this transition for hauliers by working with them to provide the right structured finance solutions for them.