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There is a particular kind of conversation happening in haulage offices around the country at the moment. It tends to take place after the drivers have gone home and the diary for the next day is finally settled. The owner sits down with a coffee, looks at the management accounts, and asks the question they have been postponing for two years. What is this business actually worth now, and what is it going to be worth in eighteen months?
For a long time the answer to that question did not really matter, because the plan was the same regardless. Keep the trucks moving, keep the customers happy, keep the bank manager comfortable, and worry about the rest later. That plan is now starting to break down, and the reasons for it are worth examining closely, because they are not the ones that get the most airtime.
Has the insolvency wave really peaked?
The trade press has been quick to seize on official figures suggesting that insolvencies in freight transport may have already passed their high point. It is a tempting headline. After four years in which the sector lost road haulage firms at an average rate of almost eight insolvencies a week, any sign that the worst is behind us is welcome. The annual figures provided to Parliament in February showed insolvencies running well above pre-2021 levels but no longer climbing.
That is not, however, the same thing as recovery. The Road Haulage Association's most recent cost survey paints a more sobering picture. Average operating costs continue to rise faster than rates, profit margins across the sector are now thought to average around two per cent, and total industry net worth has fallen by roughly twelve per cent. Fleet sizes are shrinking. Borrowings are being paid down, not because operators feel flush but because they are reluctant to commit to new equipment in an environment they cannot read.
What is actually happening is not a recovery. It is a thinning out. The micro-operators with no real balance sheet protection have gone, or are going. The mid-sized family businesses that have weathered every storm since the 1990s are now facing a different kind of challenge, one that will not be solved by tightening the belt for another year. The question is whether they recognise that in time.
Why fuel duty is the wrong conversation
A lot of the noise in the sector at the moment is, understandably, about the fuel duty cut. The Chancellor's Budget confirmed that the five pence per litre reduction will be reversed from September 2026, with further increases in line with inflation from April 2027. The RHA has called this a hammer blow, and from the point of view of an owner-operator running on two per cent margins, that is entirely fair.
But fuel duty is the wrong place to fight. It is a noisy, visible cost that everyone in the sector pays equally, which means it is the worst possible thing to be exposed to. A five pence rise hurts the small haulier the most because they have the least ability to recover it through rates. It hurts the large operator less, not because they pay less per litre but because they have the contractual sophistication, the customer concentration and the operational scale to push some of it back up the chain.
The same is true of National Insurance changes, business rate increases on warehousing sites, and the various other input cost pressures the sector is wrestling with. They are all real. They all hurt. But they all hurt the smallest operators most and the largest operators least. That is not a coincidence, and it is not going to reverse.
The owner-managers worth talking to have already realised that the conversation about diesel and duty is largely a conversation about who carries the cost, not whether the cost exists. The interesting question, the one that determines whether a business is still independent in five years, is something else entirely.
What the consolidators have noticed
Walk through the M&A coverage of the sector over the last eighteen months and a pattern emerges that the headlines tend to obscure. MSC's subsidiary Medlog bought Maritime Transport, the country's largest haulier with a turnover north of £400million. Emerge Vest, a private equity investor focused exclusively on logistics, completed its seventh UK acquisition with the £75 million purchase of CM Downton. Waterland Private Equity invested in Palletways. Apollo's £2.7billion acquisition of Evri has since rolled into a tie-up with DHL's UK parcels business. Expect Distribution in Bradford bought Longs of Leeds out of a family that had owned it since 1918.
These are not isolated deals. They are the visible part of a wider strategy. Trade buyers and private equity houses have identified UK road freight as a sector with three characteristics they find irresistible. It is structurally fragmented, with ninety-two per cent of road freight businesses employing fewer than ten people. It is operating on margins low enough to make valuations comparatively cheap. And it serves customer bases that increasingly want to deal with fewer, larger, more technologically capable suppliers.
That last point is the one most owner-managers underestimate. The decisive force in the consolidation of UK haulage is not the buyers. It is the customers. Large retailers, manufacturers, and 3PL clients are quietly rationalising their carrier base. They are looking for partners with the digital infrastructure to give them visibility, the financial strength to absorb shocks, the geographic coverage to handle their full footprint, and the compliance reporting that increasingly forms part of their own ESG and supply chain due diligence. A family-owned haulier with thirty trucks, an excellent reputation and a Sage Line 50 install does not look the same to a procurement director in 2026 as it did in 2018.
The consolidators have noticed this. The customers have noticed this. The question is whether the owners have noticed it.
The three real options for owner-managed hauliers
If you take the view, as we do, that the structural pressures on the sector are not going to ease, then the strategic options narrow considerably. There are essentially three.
The first is to sell, on the basis that valuations for well-run, properly accounted for hauliers with strong customer relationships are currently attractive, particularly to PE-backed buy-and-build platforms. The window for this is not infinite. As consolidation progresses, the pool of attractive targets shrinks, and so does the urgency of the buyer. A business that is sellable for a meaningful multiple of EBITDA in 2026 may be sellable only as a strategic bolt-on at a fraction of that price in 2030.
The second option is to scale, which in this sector almost always means acquiring rather than building. Organic growth in a market with these cost pressures is brutally slow. The hauliers who are emerging stronger from the current period are, almost without exception, the ones who have been quietly picking up the customer books, the contracts, and occasionally the assets of failed or retiring competitors. They are building density on their existing trunk routes, taking advantage of the operational leverage that comes with running another truck through a depot that is already paid for. This strategy requires capital, appetite, and a willingness to take on integration risk, but it is the only route to the scale that the next phase of the market is going to reward.
The third option is to stay still, and this is the one that most owner-managers default to without quite realising they are choosing it. They tell themselves they will run the business for another five years, then think about an exit. The trouble is that the business they are imagining selling in five years is unlikely to exist. The customer base will have moved on, the cost base will have tightened further, and the buyers will have spent five more years picking off the operators who decided early. Standing still in a market that is moving is not a neutral choice. It is, in effect, a decision to accept a steadily declining valuation in return for the comfort of not having to make a decision.
What this means for the next eighteen months
None of this is a counsel of despair. The UK does not have too many hauliers. It has the wrong shape of haulier for the kind of supply chain its customers now want, and the market is doing what markets do, which is to reshape itself. There is plenty of room for well-run, ambitious, properly capitalised operators to take significant share over the next decade. The point is simply that the operators who do well from the next phase are the ones who have already decided what role they want to play in it.
The conversations happening in those quiet offices, after the drivers have gone home, are the right conversations to be having. They are just not always being followed through to a decision. The owner-managers who do follow them through, who get a proper independent valuation, who understand their real cost base, who model what the next eighteen months of duty rises and wage pressures will actually do to their margins, and who decide on that basis whether to sell, scale or change their model, will have a meaningfully better range of outcomes than those who do not.
The wave of insolvencies may indeed have peaked. The reshaping of the sector has not. The two are not the same thing, and the operators who confuse them are likely to find themselves on the wrong side of a decision that, by the time it becomes obvious, is no longer theirs to make.
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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