Used lorries can be a good buy
Page 58
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Ron Douglas meets a friend in need
AN OWNER-DRIVER friend phoned me to say that after many years in the business he was being forced out by insufficient profit margins caused by unfair pressures from the various subcontracting agencies for which he worked.
"I'm home on Wednesday, I told him. "Come over for a chat." He duly arrived and we sat round the fire while he poured out the whole sorry tale.
He had started in the rat race, as he described it, shortly after the 39-45 war with an ex-WD 3-ton Bedford, and little more than a few hundred pounds, which represented a grateful country's bonus for five years' war Service, and in those days it was a handsome sum, giving him enough to buy the machine, sheets and ropes, pay the taxes and take out a decent insurance policy.
Many operators, both large and small, have had good service from old Bedfords like my friend's one. It served him very well and put him firmly into the black and on the road to a prosperous future and a comfortable retirement. Or at least, so he thought at the time.
The intervening years, however, with their spiralling costs, the introduction of the relatively easily obtained operator's licence and the virtually unlicensed light transport vehicle had slowly but very surely whittled away his revenue to the extent that he now had decided to quit.
"What," I asked, "have the sub-contracting agencies had to do with it all and, over the years, have you not built up ,a bank of your own customers which do not involve "subbies'?''
He had not, he said, because he had always been kept too busy charging up and down the road to take any time off to make personal customer contact.
And in answer to my question about the agencies he declared: "They have screwed me into the ground with cut-throat rates that nobody can possibly make a profit from."
When I asked him what had finally decided him I knew what his answer would be. The time had come for his lorry, a nineyear-old artic, to be replaced, and even at the second-hand end of the market, he just did not have the wfterewithal to finance any such move.
Now vvas the time for a painful but necessary lecture on costing, I thought, as I turned over in my mind whether I should take that line or offer my friend some assistance in getting his replacement vehicle.
Unlike him, however, I would not venture into unknown waters without first having a look at the chart and, without letting on as to the way my mind was working, I proceeded to analyse his situation.
He had at my suggestion brought his last few years' figures with him which, on inspection, showed that in the first place he should have sold his motor at least two years earlier than he had decided. The amount of downtime he had suffered had been enormous as had the actual cost of repairs during that period. And, looking at his operations sheet it was very obvious that his bookings had suffered at an equally if not even higher rate.
The usual picture emerged, as the breakdowns had become more frequent so the temptation to take short-cuts grew stronger, until towards the end of the last full year he was into a two days on, three days off situation.
Looking at these records and calculating-in the amount of work he was still doing, it was more than obvious that he had been putting in a full seven-day week on almost a continuous basis for more than 18 months, and we all know what that means in the long term.
As his reputation for reliability waned so the temptation to cut rates waxed, and with little thought for his cash flow he gradually got to the stage where the only work he could secure was through clearing houses and other sub-contracting agencies who, having an eye to making a quick buck, were wide awake to his predicament and took the fullest possible advan tage of it. Hence the cripplingly low rates and his present state of liquidity.
His current cash assets were less than £2,000 and, having the inevitable mortgage, wife and family, he was reluctant to throw good money after bad. What would he do for a living?
It seemed that he intended to go off and drive for a fairly well established haulier based locally. Wages? Well, around the £100 per week mark. Very good, I thought, but hardly like running your own outfit. They were his own feelings too, but "needs must" and all that.
First, I decided, the lecture, then a bit more tangible help in the form of some reliable work at proper rates for a couple of months — nothing that would extend the old motor too much. Then assistance to purchase a good second-hand tractive unit on a fairly short-term basis in order that his reputation for reliability would be restored. Then out with the old semitrailer and in with a modern 40-footer on a rented basis, again on short term, to improve the reliability factor.
There is absolutely no di grace in operating second-har equipment. In fact, in many i stances it is possible to purcha. excellent machinery in this wa capable of giving many years faithful and very profitable SE vice. And, although you mt look with askance at the rent companies as being somewh parasitic, they do in all hones provide a means of obtainir rolling stock without the cor mitment of capital at just it time it is needed most and what must surely be fantast ally competitive prices.
There are two morals to tlstory. The first is that most of somewhere have friends whom we can pour out o business troubles at a stai where remedial action is st possible without too much dii culty.
The second, if you see t1 bucket in which your fortune kept develop a leak, tal immediate steps to rectify ti situation. It's hard enough keep the bucket topped up the face of what we have to ta out without facing added dep tion by unwanted leaks.