hen Simon Sayers returned from holiday last month, he no
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doubt hoped to ease himself gently back into the hustie and bustle of the haulage industry. Maybe a few days in the crawler lane adjusting to the pace, then foot down and full speed ahead as usual. Instead, the managing director of Newbury-based Falkland Haulage came back to find the phones nearing meltdown and hauliers from Norfolk to Lancashire clamouring for his attention.
The reason for his new-found popularity was simple. Sayers, in a show of force more commonly associated with French rather than British hauliers, is leading a campaign to win a better deal for grain hauliers.
Together with around .30 other firms from Hampshire, Oxfordshire, Somerset and Wiltshire he is fighting to raise the profile of' specialist agricultural transport companies. At the core of the campaign is a bid to convince grain merchants and farmers to pay rates that reflect the huge investment grain hauliers have had to make to keep pace with changes in food hygiene standards and equipment.
The hauliers want to set a minimum rate of 14.25 a tonne for 25-tonne loads on a 15-mile radius. This, they argue, is the minimum needed to ensure that they can stay in business and continue to meet the tough hygiene regulations driven by the merchants themselves.
They are angry that, despite their commitment to improving quality, some farmers and merchants still resort to hiring "cowboy" hauliers who will do the job at knock-down rates. With harvest-time approaching and an estimated 18 million tonnes of grain heading for market, feelings are running so high that the hauliers are in the process of compiling photographic evidence that some vehicles used to carry food crops are also moving banned consignments such as human waste, scrap and fertiliser. Taking on powerful grain merchants who traditionally set the rates themselves is no easy task—the operators involved have already been accused of forming a cartel. But this is a stand-off which will be watched eagerly, not just by the estimated 2,000 agricultural hauliers across the UK, but by all types of transport firms. Low rates are a fact of life throughout the industry. If one determined group of hauliers can force a change for the better, others might try too.
Last month, Sayers called on grain hauliers from all over Britain to contact him so they can work together to improve conditions in the sector. His wish was granted—in the space of one morning the phone rang 40 times. But he is at pains to stress that this campaign is not just about rates, and he firmly rejects allegations of a cartel.
"Some people are saying that what we are doing is illegal and that we are forming a cartel—but we are not," he says. "There's nothing signed, we have not formed a group. We are just a few hauliers talking about the problem.We are saying that this is a minimum rate, a rate that's needed to survive. At the moment the rates are about £1.50 below what we need to make a profit. We are manipulating the market but we are not trying to make a huge profit, which a cartel usually does."
Instead, Sayers says, the aim is to force farmers and merchants to stick to the code of practice they have signed on grain haulage drawn up by the UK Agricultural Supply Trade Association. "Some use hauliers that do not operate to the same standards as us," he explains. My firm has bought six new vehicles—all Daf 95 48os—over the past two years at a cost of around Lioo,000 each."
The campaign leaders plan to make their views known at a meeting on so July with UKASTA directorgeneral Jim Reed. Sayers, who is one of four specialist agricultural hauliers who make up a special sub-division of UKASTA, hopes to deploy the power and influence of the trade body to their advantage. UKASTA's official line is that it sympathises with the hauliers' attempts to secure a fair deal but is worried about the legality of their action.
"I think this group is probably very well intentioned and it's quite a responsible thing to try and do," says Reed. "But I don't think they are going about it in quite the right way. Trying to write binding terms of trade would be restrictive and could land them in trouble with the Office of Fair Trading."
Who polices cartels?
What are the penalties?
Commercial rivals
The OFT's definition of a cartel is a group of people or businesses which operate in the same market and would normally be expected to be commercial rivals. Cartels can be a highly complex, formal affair between a relatively large number of firms, or simply a general understanding between two parties.
The OFT states: "Above all, a cartel is a conspiracy against competition. By agreeing, for example, not to bid against each other, to bid only for certain types of work, or to operate a common pricing policy, cartel members can bring about not only higher prices, but also a stagnation of the market generally because there is no incentive to innovate."
Such is the scale of the problem that the OFT has set up a Cartels Task Force which has already investigated hundreds of suspect arrangements across all sorts of industries. Few cases actually go to court, but the culprits are warned not to repeat their actions.
UKASTA is adamant that it cannot intervene directly on the issue of rates as hauliers operate in a free market. But Reed hints that progress might be made through talks with merchants behind closed doors. And UKASTA insists that it always follows up reports of members breaching its code of practice by hiring sub-standard haulage firms.
"We have not had to think about expelling anyone from the association yet, but if they did not improve then they would be taken off the register for our Trade Assurance Scheme for Combinable Crops," he says.
The leading trade groups are watching developments with interest. The Freight Transport Association, which is used to campaigning against cartels in the shipping industry, says it is the fact that haulage is a free market that makes the dispute so intriguing.
An FTA spokesman says: "This is not an issue that crops up often in road transport because it's a very good example of a totally deregulated market."
Next week's meeting between the rebel hauliers and UKASTA will be crucial to the outcome of the protest. And any sign that a co-ordinated strike between rival firms reaps rewards could be seized upon by other areas of the industry struggling to cope with poor rates—providing, of course, that it does not fall foul of the OFT.
Whatever the outcome, it's clear that the hauliers involved have been driven to their action not by greed but by sheer frustration,