When the Subcontractor Isn't Who You Hired

Written by Mark Skellum, Partner and Head of Haulage & Logistics

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A Midlands manufacturer loaded £75,000 of goods onto an HGV that had been booked through a subcontractor. The transport company that placed that booking had done what transport companies have always done: it checked the operator licence, looked over the paperwork, made the call. The cargo never arrived. The haulage firm whose name appeared on the booking, it later emerged, had been bought by an organised crime group using the identity of a man who had been dead for years. The lorry was real. The driver was real. The company on paper was real. What was not real was the idea that anyone was going to deliver the load.

That case, exposed by the BBC last November in its Lorry Crime Exposed investigation, sits at the centre of a story the haulage sector is only just beginning to catch up with. Freight theft losses in the UK reached £111 million in 2024, up from £68 million the year before, and the Road Haulage Association estimates the genuine cost to operators is roughly seven times that figure once you factor in vehicle damage, increased insurance, supply chain disruption and lost contracts. The headline numbers are sobering. What sits beneath them is more uncomfortable still.

The criminal acquisition of legitimate haulage companies, once a continental European problem flagged by Europol, is now active in the UK. The model is straightforward. A distressed operator, often a long-established small or family firm, is bought quietly. The operator licence stays in place. Companies House shows a clean trading history. Insurance certificates can be produced on request. For long enough to be hired as a subcontractor on legitimate loads, the firm looks indistinguishable from any other working operator. By the time the third or fourth load has gone missing, the company has gone with it, and the legitimate hauliers that subcontracted the work are left explaining the loss to their customers and their insurers.

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What is the connection between haulage margins and freight crime?

The temptation is to treat this as a security story. It is also, and perhaps more importantly, a financial one. There were 469 UK haulier insolvencies in 2024, roughly 60 percent above pre-Covid levels, with around 400 again in 2025 and similar numbers in each of the previous three years. The RHA's most recent cost data shows total operating costs up around 3.5 per cent over the last year, with non-fuel costs rising by nearly 6 per cent, against an average sector margin somewhere close to two per cent. That is a population of operators with very little resilience, run in many cases by owners now in their sixties or seventies, with no obvious succession, no clear buyer, and no capital cushion to absorb another bad quarter.

When a haulier in that position is approached by someone with cash and no awkward questions about long-term plans, the deal does not always look suspicious. It can look like the only offer on the table. That is the real route in. The criminal market is not exploiting a gap in compliance. It is exploiting the exit dynamics of a sector under sustained financial pressure, where the line between a quiet wind-down and a quiet sale has become genuinely thin.

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How should hauliers vet subcontractors now?

This is where the conversation needs to move on from the usual list. A current operator licence, a valid insurance certificate and a confirmation phone call remain the basics, but the basics are now the floor rather than the ceiling. The more useful questions are commercial and behavioural. How recent is the change of registered director or registered office? Does the trading address match anywhere a vehicle has actually been seen working? Is the load value plausible for the operator's history and fleet profile? Will they accept a contractual requirement for live tracking on the vehicle? Is there someone at the end of the phone who can talk fluently about the business rather than just the booking, and who has been there long enough to answer follow-up questions a fortnight later?

A question I am being asked more often this year is how to make those checks proportionate to the speed at which subcontracting actually has to work. There is no point pretending operators can run a 48-hour due diligence file on every new partner; the work would be gone before the form was filled in. But there is a workable middle ground. A short, standardised vetting pack that the operations team can complete in under fifteen minutes, with a deeper check triggered by named risk flags, gets most of the value without making the team uncompetitive on response time. Several operators I have sat down with over the last few months have been building exactly this kind of internal process, and the experienced ones tend to find that the slowdown is much smalr than they feared and the peace of mind much larger.

Insurance is moving in the same direction. Premiums for HGV cover are now commonly running between £5,000 and £10,000 per vehicle per year, with sharper rises where loss ratios have crept up, and underwriters are increasingly interested in the operator's subcontractor governance as a rated factor rather than a tick-box. Hauliers who can demonstrate a coherent subcontractor approval process, with documentation to back it up, will increasingly be priced differently from those who cannot. Operators who think they are saving time by skipping the paperwork are, in the medium term, paying for it on renewal.

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Why does this matter beyond the immediate loss?

There is a wider strategic point that often gets missed when freight crime is discussed in isolation. The exit dynamics of the sector are now part of its security posture. The firm down the road that has been quietly for sale for six months, the operator who is finally going to retire next spring, the small mixed fleet whose owner is starting to wonder how to get out: these are no longer just succession conversations. They are part of the same problem. The healthier the market for legitimate exits, the smaller the pool of distressed operators available to be picked up for the wrong reasons. A more orderly market for buying and selling small hauliers, with stronger broker discipline and more visible buyer due diligence, would do as much for freight security as any new piece of police intelligence work.

That last point is worth dwelling on. The National Police Chiefs' Council has appointed its first dedicated lead for freight crime, and a new team at Opal is being setup to focus on it. MPs are pushing for a flagging system to identify how widespread the problem is. All of this matters and all of it is welcome. None of it will replace the everyday commercial discipline of knowing who you are hiring, why their company exists, who really owns it, and whether the answers to those questions add up. The defence against this kind of crime is being built one phone call and one signed-off vetting pack at a time, in operations rooms across the country, by people who are now expected to think like detectives as well as planners.

The hauliers who handle the next few years well will be the ones who treat subcontractor vetting as a commercial competence rather than a compliance task, and who recognise that the financial fragility of their neighbours is now relevant to their own risk register. The two stories the sector has been telling itself, one about margins and one about crime, have quietly become the same story. The sooner that lands, the better the response will be.

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DISCLAIMER 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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