The average value of a used van is now sitting at just above the £3000 mark, after falling an additional 3% last month, according to latest auction results.

At Boxby, we are always watching the Transport industry to update you on news that is relevant to all couriers and courier companies.  Falls in the values of vans have a number of consequences for couriers and courier companies;

You May be in Negative Equity

We all associate negative equity with property, however the same principles apply to vehicles and other assets purcahsed with finance.  Low used van values mean that effectively van owners can end up in "negative equity" if they have a hire purchase agreement, or a finance lease, that is probably longer than 3 years.  It means that you will have a shortfall between the value of the van, and the outstanding finance on it.  This is virtually guaranteed on any vehicle finance arrangement which has been made over 4 or more years.  Vehicles loose their value up front, they loose more in the first year.  Compared against your finance agreement where in the first few months you actually pay very little off your capital loan, and most of the payment goes towards interest. 

Cheap Used Vans for Start Up Couriers 

If you are considering taking on extra vehicles, then its a good opportunity to buy a used vehicle rather than a new one. If you are starting up as a courier business, then it would probably be safest to buy a good secondhand van.

Shorter Contract Hire Periods for Couriers

If you are considering taking on additional new vans, then you should really look to keeping the finance period as short as possible, to protect yourself from the shortfall situation.  If you don't have the cashflow to repay van finance over a 48month period, then maybe you should think about alternative financing arrangements, contract hires can be taken out for 12, 18 or 24 month periods (as well as the longer 36 or 48 months), at least this way you only have your monthly rentals to budget for, and no worry about shortfalls and residual values.

If you are a new start up in the courier industry then please consider that it can be much tougher than you anticipate.  Contract hire rentals must be paid until the end of the contract, regardless of whether you are trading or not.  We would therefore suggest that new courier company start ups go for a shorter contract hire period initally, it may cost a little extra in monthly rentals, but at least you have the comfort of knowing that you are only committed to those rentals for a short period, rather than 4 or 5 years.

Extending Your Contract Hire Period

If you have a contract hire due to end in the near future you may wish to extend the hire period.  Most contract hire companies companies will allow this, and a short extension may be easier on the cashflow than financing new or replacement vehicles.  This is apparently a large trend in fleet management at the moment, it's quick and simple and can usally be sorted with a telephone call and an email/letter.

Examine the Valuation price at the end of your Contract Hire.

Finally, if you have a Contract Hire contract due to end, the end settlement figure, if you are looking to purchase, is based on market values.  We would recommend that you make sure that the value given really is current market values, and not either a historic number from the period when you took the contract out, or a mathematical calculation.  Use Glasses guide for van valuations, and if the contracts "market valuation" looks over valued then question it.

Image; New ford Transit, from Ford UK

Stobarts have submitted a new planning application for a £19m investment to deliver an airport capable of provididing commercial passenger flights, as well as base for Stobart Group’s carlisle operations.

Carlisle  Airport has been in decline for many years, and the last commercial flight out of the airport was over 10 years ago.

Investment in other smaller airports around the UK has shown that airport expansion can have knock on positive effects for the whole local economy, not simply avaiation related income.  For example Ayrshire Golf Courses have seen dramatic numbers of scandanavian visitors, flying over on the cheap Ryanair flights to take advantage of the wonderful Ayrshire golf courses.

Carlisle is seen by many to be the gateway to the Lake District, and an airport at Carlisle would mean shorter and more direct journeys for potentially thousands of visitors each year.

The other traffic source through the airport is of course freight.  Glasgow Prestwick is currently one of the strongest freight airports in the UK.  Winning the title “Best Cargo Airport (up to 100,000 tonnes).  The spin off of this is a busy trading estate around the airport, with a large number of couriers, transport and logistic companies all operating. 

Stobarts would make the airport the new base for a storage and distribution centre for Stobarts.  The combination of Stobart Group’s freight and cargo handling experience, and the potential passenger demand have the potential to make the investment into Carlisle Airport a significant and important part of the Cumbrian Economy.

The Association of Greater Manchester Authorities (AGMA) announced changes to the planned congestion charging, which will help some couriers.  The Congestion Charge referendum voting papers go out today, and it is being both strongly backed and strongly opposed by various segments of the community.

One of the biggest issues for couriers, the freight and haulage industry, and other commercial users was the fact that the Trafford Business Park fell within the congestion charging zone.  Changes proposed by the AGMA last week mean that the Trafford Park has now been granted a 100% exemption from the congestin charge, which is good news for all, and particularly the many packaging, logistics, couriers and parcel delivery companies based there.  APC, Business Post and Europa all have depots in the Trafford Park, and the costs that the charge would make on the large numbers of couriers and parcel delivery companies entering these premises every would have been prohibitive.

The AGMA are also proposing to delay the charging of commercial vehicles over 3.5 tonnes, this gives the operators of the scheme a chance to see the benefits before implementing such a hefty levy on freight and haulage businesses based within the congestion charging zone.   The FTA has backed this delay, but still feels that more strategic view needs to be taken.

Manchester plans on ploughing the money from the congestion charging into improving the public transport network.  The vote, which runs between now and 11th December has had fluctuating support, with an indicated 53% support in favour in August 2008 turning into a 2:1 against the congestion charge only last week.  No doubt the current economic climate means that businesses within the zone will be worrying about possible reductions in customers and sales, whilst the last thing that private individuals will be voting for will be an increase in their weekly household expenditure.

Edinburgh voted in 2005 against a £2 a day congestion charge.  And currently London is the only city in the UK that has sucessfully implemented and extended a congestion charging zone.