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II I E A EVIII
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lany hauliers choose to buy their own trucks, but pith shrinking profit margins, others choose to
3ase their Ms. speaks to one perator who has paid heed to his ccountant's advice and taken on four-year lease to run a fleet f 11 tippers. There are a few mind game: going on at Male Se Soi (Pensnett). The West Midland: haulier is taking delivery of 1 new Renault trucks and manag ing director David Male swear: by the psychological boost it ha given his drivers.
"Instead of driving knackers, our guy: cruise along in comfort," he says. And fill cabins are high-tech nerve centres so no's they can tip, open doors and lift loads by flick ing switches and without having to leave thi vehicle.
The deal not only put Male's 14 drivers ii good spirits but also his accountant. In . world of slender margins, it's make or breal unless you can jack up productivity, insist Male. "Getting in and out of trucks waste time and if you do six loads a day that's a] extra 30 minutes you've lost—equivalent ti another load," he remarks.
Male is on firm ground when he talks o muck. His company shifts quarry waste, con struction and recycled materials from loca sites and was started after World War I by hi grandad with a horse, a truck, and a low-ted tipper in the form of a shovel.
The ii new Renaults, all eight-wheele rigids, mark the first time Male 8,i Soi (Pensnett), near Dudley, has leased its lorries This is the flip-side of the psychological coir feels the managing director.
Depreciating asset
His accountant was unsentimental about bu3 ing trucks, and explained that leasing a depre ciating asset could at least be offset agains tax. But those four-year leases total aroun koc>,oc)c, and Male's biggest worry is "mair taming equilibrium".
By this he means keeping the work rollin in to pay the monthly bills. Timing was there fore crucial when it came to knocking-off tim for the knackers arid explains his reason fc going for Renault: availability.
"Renault trucks were the most readily avai able. I would have preferred Daf but the wai ing list was five months. My preferences wer restricted to what I could get on the roa quickly. But it was a big step going for net
rucks, and I'm not sure I would have been irave enough to make the decision on my Iwn."
Once again the cool financial logic of his ccountant won the day: it would be cheaper o lease new lorries and get rid of the spiailing overheads caused by repairs.
I.ease deal
'he lease deal has a safety inspection and naintenance contract that ensures closer cost ontrol of the fleet. This is a mighty relief for 4ale who was fed up having to second-guess xpenses for lorries that were breaking down left, right and centre".
The new trucks, which include one giveway Renault as an incentive to lease the ro ther rigids, will eventually replace the old Eeet. The existing line-up of II trucks includes ix-and eight-wheelers, mostly Leylands.
But until their sale, the old HGVs work longside the new trucks, taking waste and building materials to and from sites in the West Midlands, though rarely further afield. The firm works within about 50 miles of Pensnett, up into Cheshire and Derbyshire.
"We don't like to travel further, but have ventured to other areas a few times in the past. This was not very successful because the travelling kills the time you can spend productively," says Male.
The word productivity rears up again when Male thinks of other threats to his balance sheet: sky-rocketing fuel costs and the Working Time Directive, for instance. Fuel swallows up nearly a third of his firm's total costs, he says, and is "bloody excessive" compared with the rest of Europe.
An extra penny in tax makes thousands of pounds of difference when you clock up his team's journey time. Each lorry takes at least five loads a day and the fleet hauls around 50 loads, totalling some 1,50o per month.
And though the cut in vehicle licensing tax saves Male & Son (Pensnett) £15,000 a year, the Working Time Directive will call for even cooler thinking from his accountant. Male's drivers currently work over 50 hours a week and will have to be compensated or face a lower standard of living, he reckons.
"The industry can't afford to increase wages to cover the loss of hours and there will be a shortage of drivers. Competition is so fierce you run on a shoe-string and don't have the margins to pay out," he says. Specialists like logistics firms and big oil tanker operators have stronger rates structures and therefore more chance of beating the squeeze, he feels.
Though Male's business has a fairly healthy seven-figure turnover, it has halved in recent years as the firm has struggled to keep the footing it once enjoyed.
Heavy industry
Boom time for Male 8C Son came in the 196os and I9705 when it commanded over r8o trucks. David Male's father took over the business in 1967 when grandfather Joe died and steered the firm into work for heavy industries, including steel. David Male, then a young man out of university, remembers his first day on the job vividly.
"Spaghetti junction was being built and the first phone call I took was for someone wanting 400 tipping lorries for the MG interchange. I shouted across to the manager to see if we could take on the job, and we managed to get the extra trucks."
Business took off dramatically in those years but the firm anchored itself around the family and continues to do so. David Male's brother, Peter, is a director and his second cousin Richard Perkins recently took over the chairmanship from 79-year-old Jack.
As chairman, Jack also became a high roller in the RHA, and was national chairman for two years in the early 198os. David, however, was never tempted to follow his father into the political firmament—"it all sounded false to me"—and believes this was when the firm started to feel the pinch.
The company also owns a quarry two miles from the depot in Brierley Hill and uses it to tip building waste. This extra cash stream is particularly heart-warming for Male's dad, who bought two Rolls-Royces with the resulting petty cash.
Male & Son (Pensnett) is shaping up for future challenges by pinning its hopes on the still-buoyant construction industry, says David Male. He reckons further consolidation may hit the industry in years to come, but won't be drawn on matters closer to home.
"I wouldn't like to predict six months into the future for this company—let alone six years," he says.