Four out of five Valencian carriers assure that there will be a significant decrease in companies if the increase in costs, the low prices of the rates and the aggressive practices to attract traffic are maintained. These are the main problems that, together with the deficit of around 2,000 drivers, affect the profitability of transport and the viability of the sector, according to the results of the latest survey presented today by FVET on the situation of Valencian transport.
“Among the problems cited, we are concerned that unfair competition has regained prominence, going from affecting 30% of companies in 2022 to close to 50%, a figure similar to that of before the pandemic. If you work below the costs of the operations, illegalities are incurred to capture traffic. Finding profitability in this context becomes an almost impossible exercise”, explains Carlos Prades, president of FVET.
In general terms, the sector scores the current situation between a “5” and a “6”, although 38% score a “failure” due to these difficulties, to which is added the high taxation and the lack of infrastructure necessary for that transport can carry out its operations, such as the adaptation of the V-30 or the AP-7 to traffic flows, the northern access for road traffic in the Port of Valencia, the areas for loading and unloading merchandise or the rest areas and secure parking. In addition, despite having perceived the application of the penalty system against delays in transport, non-payment or excessively long payment terms continue to affect one in four Valencian companies.
Costs still high
Fuel represents a significant item for transport professionals: around 30% of total direct costs. According to the Ministry of Transport, Mobility and the Urban Agenda, the price of fuel remains high, reaching 1.42 euros per liter in May this year, 20% more expensive than in May 2019.
“In line with what the National Road Transport Committee (CNTC) has claimed, the Valencian carriers have supported the extension of the bonus of cents per liter, necessary until the economic situation stabilizes. In the long term, we believe that it is essential to consolidate the fuel price review clause in relations with our customers, a mechanism that allows us to pass on price variations and alleviate the dependence of our activity on fluctuations in professional diesel.” assures Juan Ortega, vice president of FVET.
In addition, the vice president has stated that other items have also increased, such as salary or the acquisition of vehicles. Regarding this last item, the purchase of a truck has become 30% more expensive in one year, going from 88,000 euros to 110,000 euros per unit. “In addition, if we were talking about an electric truck, the situation would get worse: the price triples. In order to successfully undertake the transition towards zero emissions, we should have, among other things, more economic aid to renew the fleet”, explained the vice president.
Decrease in operations and prices
Added to this scenario is a reduction in the volume of operations in the first half of the year. According to the results of the Federation’s survey, 51% of the carriers affirm that their activity has fallen in that time range: among these, 60% point to a decrease of 25%, a quarter, between 25% and 50%, and the rest is between 50% and 75%. On the other hand, 39% of the carriers affirm that they have maintained their income and the remaining 10% have experienced a 25% growth in their operations.
“As a consequence of all of the above, 79.1% of transport companies acknowledge that their profits have decreased so far this year. This puts them in a risky situation as far as profitability is concerned”, clarifies Carlos García, general secretary of FVET.
The Valencian transport is confident that the recovery of economic activity and political stability will improve the situation at the end of the year, in addition to the relief that the extension of cents per liter will bring.
“Apart from temporary problems, we need to professionalize transport. Only then will we know how to make our operations profitable without having to resort to fraudulent practices that have undermined the sector for years. From the Federation we work on it from the formation of the sector and advice to the associates”, concludes the president, Carlos Prades.
According to the Ministry of Transport, the Valencian Community is the autonomous region that transports the third largest volume of goods by road, behind Andalusia and Catalonia: 261 million tons. In addition, 10,801 Valencian companies are dedicated to this sector and there are 50,277 drivers with valid permits.
