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Tough market grinds vain rates into ground
Page 7
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la Fierce competition is being blamed for driving down grain haulage rates-for this harvest grain mer! chants managed to drive rates down to 2.4% below 2001 levels.
The results, from an annual survey by the Home Grown Cereals Authority (HGC41, show that in 2002 a 10-mile journey cost £3.74/tonne, which is 2.4% down on 2001. A 100-mile journey cost £7.57/tonne, down 1.3% on 2001 (see table).
were recorded by the survey. It says this "significant reduction" is due to fewer firms hiring commercial hauliers, and a higher proportion of "nil returns", indicating that merchants have "concentrated their haulage requirements into But the HGCA also reports that fewer journeys 56 100 90 88 10 60 fewer companies or that there has been a change In logistical practices".
Speaking to Oft stabkmate Farmers Weekly, HGCA economist Rupert Somerscales
said that fewer hauliers are chasing a bigger volume of grain: "On balance, these marginally lower rates can be seen as positive news for farmers."
The farmers gain is the hauliers' loss as they struggle with driver shortages, rising wage bills, high fuel costs, and tougher rules governing trailer cleanliness.
According to the Road Haulage Association, costs have risen 2-3% this year. Couple this with the 2.5% fall in rates and hauliers face a 5% drop in income, says RHA chief executive Roger King: "This is not good news-hauliers need a 2-3% increase to stand still.
"There is no doubt that competition is a problem," he adds. "But hauliers should question whether winning business an the basis that they are cheaper than last year is really a business win."
King warns that now legislation affecting areas such as drivers' hours rules coming in, companies will not be able to sustain their businesses with falling rates.