By Mark Skellum - Partner & Head of Haulage & Logistics

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Haulage cash flow: why reserves are running out in 2026

There is a number in the latest Office for National Statistics Business Insights and Conditions Survey that should stop any haulier in their tracks. Around 31% of transport and storage businesses report having no cash reserves at all. That is the highest proportion of any sector in the UK economy, some seven and a half percentage points clear of the next nearest sector, construction. A further slice say they have less than a month of reserves left. Taken together, nearly four in ten firms in the sector have less than a month of cash in the bank.

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For an industry that runs on fuel cards, fortnightly diesel bills, monthly finance payments and customers who routinely pay on sixty or ninety days, those figures are not an abstraction. They describe the lived experience of running a transport business in 2026.

Why has it come to this?

The temptation is to blame the obvious culprits. Driver pay has settled at a structurally higher level than it was five years ago. Fuel, even with diesel off its 2022 peak, remains a volatile line in any P&L. Insurance premiums for HGV fleets have risen sharply over the last two renewal cycles. Vehicle finance costs are markedly higher than they were when the current fleet was last refreshed. AdBlue, tyres, parts, depot rent, all of it has moved one way.

But none of that is new. Operators have absorbed cost increases before. What is different now is the gap between the cost of operating a vehicle and the price the market will pay to move a pallet. Road Haulage Association data has the average operating margin in UK road haulage at around 2%. Industry borrowings have fallen roughly 16% to around £2.05 billion, and net worth across the sector has dropped about 12% to £5.9 billion. Strip away the headlines and what you are looking at is a sector that has been shrinking its balance sheet and trimming its fleet because the maths of the work has stopped adding up.

In conversations with hauliers over the last few months, the same point keeps coming back: the day rate has not moved with the cost base. Customers, particularly the larger shippers, have been disciplined about holding rates flat. Tenders are still being won and lost on pence per mile. And when you are operating on a 2% margin, a single bad debt or a single quiet week wipes out the buffer entirely.

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“When you are operating on a 2% margin, a single bad debt or a single quiet week wipes out the buffer entirely. That is not a cost problem, it is a working capital problem.”

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Is this a cost crisis or a working capital crisis?

It matters which one you think you are dealing with, because the response is different. A cost crisis you fight with efficiency: better routing, fewer empty miles, tighter fuel discipline, sharper procurement on tyres and parts. Most operators have been doing that work for two years and it has not closed the gap.

A working capital crisis is a different animal. It is about the timing of money in and money out, not the absolute size of either number. And it is the timing that is killing transport businesses right now. Diesel is paid weekly. Wages are paid weekly or fortnightly. VAT is paid quarterly. Corporation tax sits on the calendar. Vehicle finance does not flex. Meanwhile, the debtor book stretches further every quarter as customers push payment terms from 30 days to 60, from 60 to 75, from 75 to “when we get round to it.”

The administration filing this week from Trans Haul (Europe) is a reminder that the gap between profitable on paper and solvent in the bank can close very quickly. Trans Haul is not a small operator. It is the kind of name other hauliers used as a benchmark. If a business of that scale can run out of road, family-owned fleet operators should be looking very hard at their own cash position.

What can fleet operators actually do about it?

The honest answer is that the levers are well known but underused. The first is debtor management, and I mean active management, not the polite email at day 45. The operators weathering this best are the ones who have stopped treating credit control as an admin function and started treating it as a commercial one. They are calling the finance teams of their largest customers, they are charging late payment interest where the contract allows, and they are walking away from customers whose payment behaviour does not match their tonnage promise. That last one is the hardest, particularly when you have spent years building the relationship, but a customer who pays in 90 days at break-even rates is not really a customer worth keeping.

The second lever is invoice finance, and the conversation around it has shifted. A few years ago, factoring carried a stigma in the haulage community, the assumption being that any operator using it must be in trouble. That has changed. A growing number of well-run hauliers now use confidential invoice discounting as a structural tool to smooth the gap between delivery and payment, not as a last resort. Used properly, it turns a 60-day debtor book into a 7-day one, which is the difference between making payroll comfortably and refreshing the overdraft every Friday.

The third is the conversation owners least want to have, which is about rates. The clients I sit down with often tell me they have not put a serious rate increase in front of their customer in two or three years, because they are afraid of losing the volume. But holding a contract at 2024 rates in 2026 is not winning the contract. It is funding the customer’s working capital out of your own balance sheet. The hauliers who have put through structured rate increases this year, backed with evidence on fuel, wages and insurance movements, have generally kept the work. The ones who have not are the ones now running on fumes.

The fourth is harder, slower and the one most owners do not want to think about: looking at the shape of the business itself. Some contracts make money and some do not. Some depots cover their cost base and some have not done so for two years. Some trucks earn their finance and some sit underutilised three days a week. A proper margin analysis, route by route, customer by customer, is the single most useful piece of work a haulier can do this summer, and it is the work most often left undone because the day-to-day swallows the time.

Where does this leave the sector?

The honest reading of the ONS data is that consolidation is coming. The 4% fall in the number of operators over the last year is not a one-off. There will be more administrations, more quiet sales, more family businesses absorbed into larger groups. That is not a forecast of doom, it is a forecast of structural change. The hauliers who come out of the next twelve months in good shape will be the ones who have used this period to fix the working capital architecture of their business, not the ones who have spent it hoping the rate environment recovers on its own.

For fleet operators, the question to ask this week is a simple one. If your largest customer paid 30 days late, could you cover payroll? If the answer is anything other than a confident yes, the cash position is the first thing on the desk on Monday morning.

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If you would like to talk through the working capital position of your business in detail, you are welcome to get in touch with our haulage and logistics team.

This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.

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