These rates are rubbish
Page 48
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Middle East haulage involves operators in great expense. Freight forwarders' rates should reflect these charges, but don't by Johnny Johnson:
BRITAIN'S economic recovery must be export led and although a lucrative field lies in Europe the real money is to be found in the Middle East. Through traffic to this part of the world is buoyant. The route, according to operators, reported elsewhere in this issue, has been cleaned up but even now well established hauliers who have tested the route are pulling out.
Frustration at borders and Hegel expenses collected by petty bureaucrats along the route would be sufficient aggravation even if the job was well paid, Sadly this is not the case. The rates being offered by shipping and forwarding agents in many cases show too small a return on capital to make it an attractive job for those who could do it best.
Nevertheless there are those good operators who have committed themselves to the route, who demand a realistic rate and provide a highly satisfactory service and they are ironing out the difficulties. Their experience has taught them to reject traffic for destinations which lie at the end of a bureaucratic and physical obstacle course with their attendant high costs.
There are many people involved in the export chain between the manufacturer and the consumer, but when it comes down to the nitty gritty it is the haulage contractor who puts everything at risk. His driver, his vehicle, his licence, his insurance and his profit margin. In the words of the gambling fraternity he is on a hiding to nothing. Shipping and forwarding agents have never been the favourites of the haulage industry, and the rates many of them are offering now are doing .nothing to enhance their reputations. An outward trip to the Middle East from initial loading to final discharge can take as much as three weeks and more yet the rates being offered are, in many cases, less than a man Can earn working at home at much less risk and at a great deal less discomfort.
I would not want to be accused of misrepresenting all freight forwarders, some of whom are now adding transit taxes to their haulage rates. On the outward journey through Turkey with a loaded vehicle this could amount to £350 and on the return leg with an empty trailer £150. Nevertheless, the rates are in the main neither generous nor even attractive.
What is never considered is the fact that the run in the winter can take twice as long as in the other seasons but the shipping and forwarding agents have a flat rate for all the year round. It can hardly be considered hot news to say that international road haulage permits for Germany, Austria and Yugoslavia do not pour from the International Road Freight Office in Newcastle in unlimited numbers.
Indeed many operators have been forced to abandon applications to Newcastle and resort to the German road rail system. CM has always considered this to be a worthwhile exercise because of its time saving potential.
Shipping and forwarding agents may enjoy the facility of the system but almost always at the expense of a haulage contractor because many do not pay the extra expense involved. While there are time, fuel and tyre cost savings the facility will involve the operator in possibl} an additional £200 of expense This is a service for which the shipping and forwarding agent should be happy to pay. It is still very much a case of charging what the traffic will bear, £3,200 to Tehran or £3,740 to Abadan illustrates this point. There is plenty of traffic to Tehran, there is less to Abadan The additional round trip mileage from Abadan compared with Tehran is 2,000 miles for £500 extra or 25p a mile. The sooner the thrill of Abadan Li.saripews, the better for ever.yone concerend
A Midie East ope,:ator told me that these are the rates:: vvhlch would attract owner drivers who haven't yet learned their lesson. This was the kind, of of rate beIng offered for Tehr?t)• 18 months ago before, as one, man succinctly put , it, -CM:. helped to clear Lip the routeY' Before anyone accepts a job for the Middle East only 0,ne::, question need be asked. Could'earn as much per mile by. working at home? If the answer is even a qualified yes then the . action is obvious.
Not only does traffic to. Middle Middle East take it out of the man, and we pioneered, th.e route so we should know, but it. also takes its toll on the machine.
According to one operator, the 7,000 mile return trip .has the effect of the equivalent: of 20,000 miles in this countryi., Simply expressed this mean three times the maintenanee and depreciation costs on every rate
It is Important to realise at the outset that there is an imbalance of traffic to the Middle East and the driver might have to come back as far as Austria before picking up a load at a rate which will barely cover his fuel costs for the entire return leg. After all, there is not much of a market for 20 tons of desert sand, Nuts and fruit from Turkey, or general cargo from Austria are about the two main loads on the return leg but it is essential to have a good agent to obta1.6`. lucrative traffic.
There are those who would:: say it is as well to organise a return load before accepting an outward load. That is sound advice but even before accepting an outward load it would be wise to check if it is worthwhile starting at all.
We have managed to obtain from a leading shipping and forwarding agent their rates for 33 Middle East destinations. All were strangely reticent about their European rates and did not want us to publish their Middle East rates. In our opinion the rate is at least 25 per cent too low.