Will you still be in business next year?
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by lain Sherriff Unless you've been living on top of a mountain or shipwrecked on a desert island, you will by now have heard that we are facing an economic crisis. There is no reason, however, to sit back and accept the consequences. Provided operators are willing to try new ideas they can capitalize on the opportunities which the crisis will create
HOW MANY new transport opportunities did you see in your local paper this week?
The days when traffic was selfgenerating are over, at least for a time, and hauliers will now, more than ever, need to seek new customers and do a real selling job for their services, possibly for the first time ever.
Hauliers will have to be prepared to change their type of operation and engage in work which they would not have contemplated as recently as last year. Tipper men may need to move into express services with vans. Longdistance men may find themselves carrying livestock.
The financial and advertising pages of local and national newspapers frequently offer good leads to traffic opportunities. They do not say "haulier wanted" in as many words, but where a company chairman's report expresses the view that they will be diversifying or expanding, this clearly means more traffic or different traffic and is an open invitation to the enterprising operator to go after that traffic.
An example of following up a newspaper lead is illustrated in an exercise I carried out late in January when the Government lifted the ban on exporting cattle. I contacted the National Farmers' Union, ascertained that the ban had been imposed in July, 1973. When the ban was raised 18 months later it was unlikely that there would be sufficient spare capacity in livestock transport to cope with both the domestic and the export market.
Whisky galore
The NFU said that at the time of the ban about 160,000 cattle were being exported annually. It expected that this type of traffic would build up and that the exporters would choose to have the livestock travel to their destination by lorry. 1 was told that anyone interested in this type of traffic should make contact with cattle breeders and although the deals were made by private treaty the best place to make the first contact would be at the local cattle market.
If livestock transport seems to be tc specialized, what about whisky export This is a market which is booming at showing an annual growth of more th 20 per cent. Home sales are also risin The industry is buoyant and i transport demand grows annually. T1 requirement is not just for the finishi product.
Grain has to be transported to ti maltings — sometimes from farms, c other occasions from the ship's sic Empty barrels have to be taken in ai full barrels taken out of Customs bottling plants. Empty bottles ai packaging have to be transported in the bottling plant and the finish article has then to be warehoused al distributed. If sales are rising by 20 r cent annually so also is the transpc requirement.
On December 13 1974 in CM looked at one example of a ne prosperous and expanding transpc activity -fast, light freight, where t operator provided a guaranteed servi at a high priced mileage rate and fou his business constantly expandit avy transport operators may find it ficult to visualize themselves operata light van fleet yet this service is !rated by a subsidiary of Dawsonght, which is engaged in almost every ect of road haulage.
)n February 7 we published the ills of a study of bulk waste disposal !rations. There are untold ■ ortunities in this field. While we :ussed the possibilities of carrying te in bulk from transfer terminals to )osal points, there is no reason why lage contractors should not engage lomestic waste collection on behalf the local council. It is the )onsibility of local government to ire that waste is collected. It is not nd to carry out the operation by ct labour.
any council activities involve the of transport but, as with refuse :ction, councils need not own the sport which they use. Highway and aauthorities, parks departments, ing departments and building departments, in fulfilling their primary function require the services of platform lorries, tippers and vans. These are vehicles which any haulage contractor should be able to supply to councils as cheaply as the councils can operate them themselves.
Local government is in no position to waste money today with everyone acutely aware of the rates increases which are looming up. The haulier who offers to examine council transport and then quote a price to take it over must at least get a sympathetic hearing.
While dealing with civic Matters, the minutes of councils or their committees provide good and early leads to new opportunities. Many of the decisions taken in the council chambers involve the use of transport. Planning permission granted for a new factory should raise the questions in the haulier's mind: "Who is bringing the material on to the site. Who is carrying away the excavated material. Can I supply tippers and excavators?" It matters little that he is not at till moment in the tipping business. Sucl early warning as the minutes provid, will give ample time to quote sensibl2 and equip for the job.
New factories mean more traffic either manufactured or processed, anc this means that raw materials have to b( taken into the factory and finishec articles warehoused and distributed. There is no better time to make contaci with the manufacturer than when he haE received planning permission for hiE new plant.
It may be that the opportunities are for vans for the schools meals service, and there is no reason why tipping operators cannot buy vans to embark on this new type of operation. Certainly the man who has specialized in a particular type of transport service will stand a better chance of landing a contract for his type of work, but every opportunity is well worth exploring.
Own-account takeover?
There is evidence already that large own-account operators are looking at their transport operations critically and engaging in contract work with some of the large transport groups. A scaled down version of these operations should prove attractive to smaller own-account operators and smaller haulage contractors, who should be able to offer trunking, warehousing and local distribution services.
If a haulier can show a manufacturer that he can supply his transport requirements for even the same costs as the own-account man is presently carrying, then the first step in negotiating for the traffic is over. This should not prove too difficult to a hire and reward man since the own-account man seldom backloads his vehicles. This means that almost half of his running is empty; and not only costly but an iniquitous waste of fuel.
On the other hand, haulage contractors who charge both the outward and the inward customer for the round trip must break themselves of the habit. When they backload they should charge only for the time and the mileage used by each customer. This kind of discipline will ensure that traffic clerks explore every back load avenue, because manufacturers are unlikely to stand for round-trip charges for very much longer they also have cash flow problems.
In this sector of transport the warehousing aspect should be considered. On January 17 in CM I suggested that an examination of existing space might prove fruitful. Manufacturers or processors are bound to ask themselves sooner or later if they need their own arehousing space. A little encourageLent from the haulage contractor might ell accelerate their decision to rent oace.
Vork for the nanager
Own-account transport managers ill unquestionably be asking iemselves: "What happens if our own eel is sold and the work goes to haulage ontractors?" The answer surely is that le own-account manager becomes kore efficient. He hires in the vehicles lost suited to the work at the right price rid with the right guarantees, and be is olieved of the worry of protecting the perator's licence, maintaining the fleet, udgeting for vehicle replacements and
;Ting up money in spares. He can oncentrate his whole effort on ensur
ig that his company obtains the most fficient and economical distribution rvice.
Hauliers who go after own-account raffle will need to convince the transInt manager that their service is fficient and economical, and it is worth vhile taking time to build a case because here is a lot of own-account traffic round.
One thing must be clearly borne in rind by the hire and reward operator; he own-account man came on to the cene in the early Thirties because nanufacturers could not depend on laulage contractors to provide them vith the service they required.
In the last three months almost 3,000 operators' licence applications were nade in the 12 traffic areas, most of hem by own-account operators. They tsked for fleets varying in size from 1 to .).0 vehicles and most of the vehicles had ;till to be purchased. This is a golden opportunity for the enterprising haulier. He is supplied in Applications and Decisions with the names, addresses and proposed fleet sizes of potential operators — who he should regard immediately as potential customers.
As a random example, one recent lpplication was for three vehicles for a plastics company in Cirencester, all to he acquired. Surely there must be an operator in the Cirencester area who .could have supplied this company with exactly the vehicles it required, as and when it required them, and at a sensible but profitable rate. This is one example, but the list is endless. Surely the butcher, the baker and the candlestick maker could employ their available capital to improve their efficiency or, better still, to reduce their overdraft rather than
engage in road transport? As & Ds are available from traffic area offices price 12½p post free.
It is accepted that many own-account
!ople have a thing about running their vn .transport, but _how many realize ;fore the licence is granted what they e letting themselves in for? Without Ferstating it, established operators luld warn the "new boys" what is volved before offering to take over the tire transport responsibility. Indeed it ight be worth while sending new 0 ence applicants in the area a copy of Ifs publication What a Haulier needs know and follow this up with a visit a v days later armed with a copy of lif's Tables of Operating Costs. It will ike the selling task much easier.
haring the cost
Despite the best selling techniques, wever, there will still be those ownount men who want to hold their 'n operator's licence. They also wide a market which can be tivated. They could be persuaded h others to use the maintenance ilities of established operators. By uble-shifting the maintenance staff, nding charges are almost halved. This type of operation allows the owner to service his own vehicles on the night-shift, thus eliminating profitable downtime while servicing customers' vehicles on the day shift — which again opens up the possibility of persuading the maintenance customer to hire in transport while his vehicle is off the road. This could very well be a clause written in to the maintenance contract.
Such a system brings benefits to both parties. Workshop turnover and fleet utilization increases. At the same time, the customer is provided with a record system which is acceptable to the Licensing Authorities.
Parts 2, 3 and 4 of Applications and Decisions also provide invaluable information to hauliers who want to sell their services. In Part 1 of the Western Area As & Ds No 1377 issued on January 14 an application appeared on behalf of a Bristol food company for three vehicles. In Part 3 of the same issue there was notification that the application had been refused. There were also refusals for another three applications for six vehicles. I wonder if any Bristol operators immediately went after this traffic? In Part 2 there as a list of operato who had been cal ed to appear befo the Licensing A hority in terms Section 69 and in • art 4 there was a li of operators again .t whom the LA acted in terms of Section 69. This adds up to potenti 1 traffic or servicit business, and the estern area is no di ferent from other areas where simil; opportunities exist At the mentio of group workir most haulage cont actors run for cove In this respect the are a suspicious I( who, while they ara prepared to give tt most casual acqu intance substantii financial assistance, would sooner di than reveal their aulage rates. Sadl: this is an attitude hich will not chang quickly.
There is. howe er, one aspect c group working hich might prov acceptable since it r leases assets to tak advantage of new a pportunities, save money and does no necessitate busines secrets being divul ed.
Most sizeable h uliers today hay their own maint nance and repai facilities to some ex ent. Not all wrirk tc the ratio of one me hanic to eight or It vehicles, even fewe have sophisticate( servicing equipmen , but all have some thing. One thing co mon to almost al is that their work sh ps operate only if hours in 24 so that for 14 hours plani and equipment st nds idle. Grout working for repairs nd servicing at the premises of one op:rator would ensure the full utilization sf mep and equipment.
Operators in the iroup would first of all float a private ci mpany for vehicle engineering and ould employ the maintenance staffs o all of the members companies. They ould then acquire either by purchase, lease or rental the most suitable pre ises in the group having regard to si e, equipment and location and the pre ises would operate 24 hours a day, seve days a week. This is a concept which op ns up a wide range of possibilities — sut that is quite another subject.
With the new en ineering company operational the vaca ed premises which then become availa le at the depots of the other group embers could be utilized for ware ousing and be controlled by a ew warehousing company formed 1) group members. This in itself would help to generate traffic.
CM's staff will be sn the lookout for new opportunities hich will prove interesting and profit hie to its readers. In the meantime, operators should. abandon the we'llo -lucky-to-survive' attitude which is pe eating too many industries today. In tead they should adopt a tightly contr Iled but confident business style, making better use of their labour force, equipment, buildings and opportunities.