Question time
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What does 1994 hold in store for the transport industry? Paul Newman asked a panel of operators to gaze into their crystal balls and offer us their wisdom on topics ranging from who would make the best Transport Secretary to their plans for the Channel Tunnel. He got some surprising answers...
There has been much talk of recovery. What is the experience of your business. How do you view the prospects for 1994?
People are still trying to reduce casts and that is affecting margins. There has been a broad increase in volume but it is patchy Stuart Archbold—chairman, Archbold Group, Leeds.
Much the same as 1993.
Clifford Barnes—proprietor, Barnes & Son, Cambs Encouraging.
Mike Beer—managing director, Mike Beer Transport. Kent
There are signs of a slow upturn in work. But we don't know whether it will last into 1994 without dropping back.
Barry Brignell—general manager, Jempson Transport, Sussex Our trading performance has been more consistent in 1993 than in 1992. We have seen fewer peaks and troughs and the level of new business enquiries has increased. We are hopeful that the trend will continue, albeit more slowly, in 1994.
Glyn Davies—managing director, Russell Dames.
In the past two years we have seen £2m organic growth. During that period people have had to rely on good hauliers to do the job for them. They have needed that level of added value to make sure the job gets to the customer on time and in the right condition. But now that confidence is returning they think they can do without that level of quality and are starting to drift back to the cowboys. This will lead to even greater levels of cost control and cost cutting.
Graham Eames—managing director. Hargrave International, Spalding, Lincs.
Prospects are excellent. We are currently working with the retail and manufacturing sectors, both of which are showing a general return in business.
Diane Farrel—communications manager, Lane Group, Bristol We have been fortunate enough in that the recession has not adversely affected our business.
Sandy Flatt— Transam Trucking, Diss, Norfolk.
Since January we have found that the volume of pallets moved for customers in the UK has increased spasmodically, but a steady increase has held only since August. The European side has increased and has seen a slight rise in the rate for the job, whereas the UK customers will not accept any increases Hopefully the UK industry will carry on the increase in throughput and enable us to stabilise and plan for the future, rather than falling back as it did at the beginning of the year. We envisage a rates increase which is desperately needed to keep up with the high cost of maintaining a professional haulage company.
Michael Lucy—director, William Lucy, Liverpool No better than the past few years. But I think that it is going to get harder because of the recession in Europe.
Harry Mason—proprietor, Harry Mason Transport, Milton Keynes, Bucks We think 1994 will be better than 1993. Donnie McKerral—director, Peter McKerral, Southend, Mull of Kintyre Not very good.
James Mundell—director, B Mundell, Tarbert, Campbeltown.
As an international haulier we are experiencing an increase of business in the UK and a large percentage of our business is associated with other European countries which are continuing to head into recession. Terry Vincent—chief executive, Kingswood Transport, Southampton.
In our lorry loader division, being allied to the building industry, we have seen an upturn in both enquiries and business. I expect a slight but steady increase in 1994. While our box vehicle side has been busier than normal for this time of the year, I don't expect any real growth in this division.
Jean Watson—managing director, Rymer Transport, Croydon, Surrey Do you think you are likely to employ extra vehicles and drivers in 1994?
Only if we land some new contracts. Stuart Archbold—Archbold Group One vehicle, one driver.
Clifford Barnes—Barnes & Son Definitely.
Mike Beer—Mike Beer Transport Hopefully But at the moment we still have a little capacity to absorb.
Barry Brignell—Jempson Transport We would think that we are likely to employ more vehicles and drivers in 1994. We have already won some new business scheduled in the first quarter of 1994 and we are hopeful that this trend will continue.
Glyn Davies—Russell Davies We expect to grow more in 1994 and will be taking on more drivers and trucks.
Graham Eames Hargrave international Yes. We are confident that new business gains will result in new staff and vehicles. Diane Farrel—Lane Group Yes, we think it very likely that we will employ extra drivers and vehicles in 1994. Sandy Flatt—'Transam Trucking We have already taken on one extra driver and truck and are looking to purchase a new truck early in 1994. Whether this will be additional to the fleet or a replacement will depend on the UK recovery.
Michael Lucy—William Lucy Not unless a good contract comes in. We will be replacing one of our oldest trucks though. Harry Mason Harry Mason One extra driver.
Donnie McKerral—Peter McKerral Not at present James Mundell—B Mundell Yes, but resulting from our extra efforts rather than from any change in the economic climate.
Terry Vincent—Kingswood Transport We have already purchased one vehicle in the past few months and it is envisaged that we will put another one on the road next year.
Jean Watson -Rymer Transport
This year the Channel Tunnel opens. If you have an international operation how much of your traffic is likely to go through the tunnel?
Don't know. It's only an underwater ferry It does not make a fat lot of difference if we go over or under, as long as we get to the other side. So it depends what the prices are.
Stuart Archbold Archbold Group About 90%, subject to price. Mike Beer—Mike Beer Transport Only about 5. Such as Monday starts from the South Coast and possible returns on Saturday mornings.
Barry Brignell—Jempson Transport Until they tell us how much it will cost I can't say If there is a service element which is of value to us then that will be taken into consideration when they come up with some prices.
Graham Eames—Hargrave International We are currently expanding into Europe and see it as a targeted growth area, therefore the tunnel will be integral to that planned growth.
Diane Farrel—Lane Group We think it will be very unlikely that we will use the tunnel as this would greatly reduce our rates on all sailings we use other than the Channel.
Sandy Fktt—Transam Trucking Our inter modal equipped truck will make use of the tunnel virtually every day by sending swap bodies via rail from Manchester to Austria and back. Overland vehicles will have the route decided by the freight forwarder who will use the cheapest option.
Michael Lucy—William Lucy We mostly use Southampton and Portsmouth for our weekly runs to Spain but we could use it for about a quarter of our loads to Italy and Germany Harry Mason—Harry Mason Transport Few prices for the Channel Tunnel have been disclosed, which until competitive would be little used by this company.
Terry Vincent—Kingswood Transport If you could choose one piece of legislation to be scrapped to help the UK road haulage industry, what would it be?
Adjust the speed limits back up to what they were before the new EC limits came into
action.
Stuart Archbold—Archbold Group The weekend break on tachographs. Clifford Barnes—Barnes & Son Minimum rest in any 24-hour period as opposed to a fixed 24-hour period. Barry Brignell—Jenzpson Transport Running at international EEC weights of 40 tonnes on five axles.
Mike Beer—Mike Beer Transport We have learnt to live with legislation as it is and since it's not very likely to change it's not something that we consider very often. However, I think that the motorway tolls as indicated in the budget should not be introduced since it is an added complication to the industry, will be quite difficult to administer and will create costs for ourselves and our customers which will he very difficult to recover.
Glyn Davies—Russell Davies Scrap all legislation which creates disharmony between ourselves and the rest of Europe.
Graham Eames-Hargrave International Motorway tolls implementation or year-onyear fuel increases.
Diane Farrel—Lane Group The limit of corporation tax should be raised to allow us to put more money back into the business.
Sandy Ratt—nansam Trucking We would like to see excessive road fund tax removed and harmonisation within the EEC SO that all countries pay the same price. Michael Lucy—William Lucy We are all supposed to be the same in the EEC, so why is the UK haulier asked to pay more for \TED and diesel than anybody else ■ in Europe?
Harry Mason—Harry Mason Extended hours for livestock transport. Donnie McKerralPeter McKerral European intervention, Some of the EC regulations are very costly for us. James Mundell—B Mundell A reduction in the restrictions placed on drivers' hours of work/rest.
Terry VincentKingswood Transport
The abolition of LBTS (London) and other lorry ban schemes.
Jean Watson— Rymer Transport What single piece of NEW legislation would help your company?
We would like to see the introduction of 44 tonnes.
Stuart Archbold—Archbold Group Don't put the road fund up in the next budget or more tax on diesel. afford Barnes—Barnes & Son Minimum tariff, as with Germany. Mike Beer—Mike Beer Transport Those who hire a commercial vehicle should have to produce a copy of their Operator's Licence as well as a copy of their insurance certificate. Also the enforcement of existing legislation fairly and uniformly throughout the EC.
Barry Brignell—Jempson Transport I would like to see the recommendation of some sort of quantity licensing because the entry threshold into the industry is too low, creating major variations in standards. Glyn Davies—Russell Davies Bring in proper harmonisation with Europe. Graham Eames—Hargrave International Provide assistance with capital equipment and tax incentives for companies which invest in training. Diane Farrel—Lane Group Jean Watson
Minimum rate for haulage to be set by the RHA, FTA and the Government to prevent unprofessional companies undercutting what slim profit margins exist.
Michael Lucy— William Lucy Because we are so rarely in this country I would like to see an EEC book which is stamped by customs on arrival and departure instead of VED.
Harry Mason We don't think any new legislation will help our company. Donnie McKerralPeter McKerral Legislation to make people pay up sooner. James Mundell—B Mundell We would like to see a reduction in legislation, not additions.
Terry Vincent—Kingswood Transport To make it much harder to set up "phoenix" companies especially using assets from the liquidated company.
Jean Watson— Rymer Transport The present Government has been in power for 14 years. Do you want it to continue or do you think a Fresh government could benefit our industry? If so what sort of government?
I want this Government to continue. But a shuffle of the pack of cards at the top and a fresh face at the head of the Conservative party might not do any harm.
Stuart Archbold—Archbold Group I don't expect a change would do any harm. I made more money under Labour than under this Government.
Clifford Barnes—Barnes & Son The present Government should continue but the Transport Secretary should be changed to someone more realistic.
Mike Beer—Mike Beer Transport At this time I can see no viable alternative. Barry BrigneN—Jempson Transport I don't think that a change of government would necessarily affect or benefit the industry significantly. Much of the current legislation is driven by EC regulations and there is obviously an over-riding requirement for unity with other EC countries, much of which has been very costly and in some cases unnecessary.
Glyn Davies—Russell Davies We want a government which tackles education, unemployment, health, the trade deficit and the recession with determination and flair.
Diane Farrel—Lane Group We would prefer a Liberal Democrat government.
Sandy Flatt—Transam Trucking We should be given the chance to vote for the whole cabinet at the election and they should tell us what they are going to do and stay in the job until they achieve it. And they should be paid on performance like the rest of us.
Graham Barnes—Hargrave International We would like to see a government that can see the problems that the haulage industry has to work with. Perhaps one that thinks like the Dutch Government and appreciates that the truck industry needs friendly legislation rather than hindrance. Over the past ten years the UK road network has become more and more congested, which is making delivery times increasingly difficult. We need a definite UK transport policy which would help the whole industry Michael Lucy—William Lucy A fresh government could help the industry. Donnie McKerral—Peter McKerral I don't think that any government has helped the UK haulier. It seems that the EEC makes rules and we in the UK are the only ones who have to implement them. Speed limiters are a good example.
Harry Mason—Harry Mason They are the best of a bad lot. James Mundell—B Mundell There is good and bad in all governments, and change would be destructive at this time.
Terry Vincent—Kingswood Transport In the main they tend to be becoming aware of problems in the road haulage industry. However, unless they build safeguards into the contracts when subcontracting out road building programmes, we will end up being taken to the cleaners as we are with the Dartford Tunnel and the Severn Bridge. On balance I would feel happier with the devil I know.
Jean Watson— Rymer Transport Transport Secretaries come and go but if there were one person you would like to see in the job, who would it be?
I like who we have got. He listens. Stuart Archbold--Archbold Group Geoffrey Cavewood.
Mike Beer—Mike Beer Transport Anyone who is prepared to stay long enough to see the actions they start through, and not just to use the post as a stepping stone to better things.
Barry Brignell—Jempson Transport One of the problems with understanding and supporting our industry from a policy view point has been as a result of a number of changes.
As Secretary of State to Transport, continuity does, I am sure, assist the cause and give that person much clearer understanding and empathy for the industry. I believe that John MacGregor has ahead of him a number of challenging tasks and I believe that he is dealing with them in a pragmatic way My view therefore, is that we should leave well alone and allow him to get on with the job. The over-riding consideration is that he should be allowed to remain in that post in order to give the industry reasonable continuity and support.
Glyn Davies—Russell Davies Brian Weatherley. He has got a far better understanding of the transport industry and how it should be run than any of the politicians.
Graham Eames—Hargrave International Robert Key.
Thane Farrel—Lane Group Ken Livingstone.
Sandy Flatt—Transarn Trucking Richard Branson.
Michael Lucy—William Lucy I would like to see someone in the job who understands this business. Not a politician. Nor should it be anyone from the RIIA or FTA as I believe they are not doing this business any good.
Harry Mason—Harry Masan The person for the job must have experience of the haulage industry Donnie McKerral—Peter McKerral Steve Abel.
James Mundell—B Mundell Anybody but Steven Norris. How about Archie Hamilton?
Jean Watson-Rymer Transport What single piece of advice would you offer to a newcomer considering setting up in road haulage?
If you are setting up with one truck then have a go.
Stuart Archbold—Archbold Group Don't. Unless you want plenty of aggro. Clifford Barnes—Barnes & Son In the present climate, don't. Mike Beer—Mike Beer Transport Don't.
Barry Brignell—Jettipson Transport They would require more than a CPC. They would require a working knowledge of operations, vehicle costings and finance in addition to a reasonable commercial understanding of the business. 20 years ago the industry was an art, now it is a science and becoming more and more demanding, complicated and high tech.
Glyn Davies—Russell Davies Go solely for a high-quality operation with innovation. It is no good offering the same as everyone else.
It's a bit like gambling. If you can't afford to lose don't start to play Graham Eames—Hargreave International Be clear about the particular strengths that you are going to bring to the market place. With 70,000 companies in this sector, competition is fierce. If you want an easy life perhaps you should consider another industry.
Diane Farrel—Lane Group We wouldn't. There is enough of us already Sandy Flatt—Transam Trucking Do not enter the road transport industry as the market is already over-supplied with too many trucks and too many drivers who are cutting rates to try and make a living. If a lot more hauliers looked closely at their costings and did the job professionally, the days of cheap, non-profitable rates would be over and we might all be abble to prosper in this industry We hope that 1994 will see the demise of that minority of haulers running on a shoestring with old and unreliable trucks, bent tachographs red diesel, no tax, doubtful insurance, doubtful goods-in-transit insurance and dubious acquisition of tyres and trailers.
Michael Lucy—William Lucy Don't! Leave your money in the bank as you will get a better return with no headaches. Harry Mason—Harry Mason Don't let the business get too big. Donnie McKerral—Peter McKerral Go and see a psychiatrist James Mundell—B Mundell Be sure you have fully evaluated your marketplace.
Terry Vincent—Kingswood Transport Make sure that you are aware of all the legislation and requirements before starting so that at least when it changes you are half prepared for it.
Jean Watson— Rymer Transport