the period studied the larger companies by turnover (i.e. those with an annual turnover of greater than $ £10 $ million) have generally performed better than smaller companies across the range of financial performance indicators used. However, in 1994 one fifth of companies declared pre-tax losses. The strength of the larger companies has been reflected in the continued expansion into the European mainland and other parts of the world.

The trend is towards increasing concentration of ownership through acquisition. At the same time, the average number of trucks per company has increased sharply. Even so, the average size of company remains small, typically owning less than five vehicles. One of the important reasons for fragmentation is that certain sectors of the freight industry exhibit low entry costs.

However, while the small operator is prevalent they control a minority of the vehicles; many of the larger haulage companies have fleets in excess of 100 vehicles. A recent study by MAI (MAI 1992 Road Transport Market Study) showed that in 1992, although 69 per cent of hauliers operated between one and four vehicles, these firms ran only 16 per cent of all commercial vehicles operated by hauliers. Only one percent of hauliers operated more than 50 vehicles but these hauliers ran 37 per cent of all commercial vehicles operated by UK hauliers. Two sectors where concentration is increasing are the chemical industry and retailing. Although the largest transport companies in each country account for only a relatively small part of the total market in Europe as a whole, there are signs that their share is growing (University of Westminster 1994, 5, 19, 22).

##### 2.3.3. Pricing and price

Recent years have seen increasing complexity in the pricing structure of the road freight transport sector. With economic deregulation, tariff structures have been abandoned and buyers-supplier negotiations have been standard practice throughout Europe (Cooper 1995, 25). At the same time, a simple transaction basis for buying transport services has gradually been replaced by the kind of longer-term, contractual arrangements in the more complex service relationships which have developed (e.g. in contract distribution). Fewer pricing structures are therefore subject to re-negotiation over a fairly short-term of months, weeks or even days. In contract distribution, two years is typical and some contracts extend to five years or even longer. There are signs and expectations of volatility in the prices charged for transport services (Cooper 1995,25). Overall, the pressure on price is downwards, but the picture is complex because there are different driving factors behind price changes in different transport markets. For example, while short distance, national transport is not expected to fall in price, short distance international transport may well see price falls of up to 15 per cent. The predictions were however, based only on Single Market factors and did not take account of prospective environmental legislation and increasing road congestion.

##### 2.3.4. Freight movement

The buoyancy of the UK freight market, reflecting the recent up-turn in the economy, is illustrated by an increase in freight moved by HGVs of 7 per cent, from 129 billion tonne kilometres in 1993 to 138 billion in 1994. This was the highest annual figure ever recorded and is