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Levelling the playing field

22nd July 2010, Page 14
22nd July 2010
Page 14
Page 14, 22nd July 2010 — Levelling the playing field
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Which of the following most accurately describes the problem?

Keywords : Haulage

The RHA is about to launch 'Rounding up the Cowboys', an initiative aimed at stamping out unfair competition. Geoff Dunning explains.

ROUNDING UP THE Cowboys is about levelling the playing field for legal UK hauliers. In the current economic climate. it is increasingly obvious that some firms are cutting corners and competing unfairly. While some of it is legal, some is questionable and some is definitely illegal, and we are pulling it all together for regulators. legislators, enforcers and customers to address.

Research into where our members are losing business has shown that nearly 30% of UK hauliers are seeing other UK hauliers taking work off them. When we hear that people are undercutting rates by 15% or 25%, you have to ask how?

Sustainable rates

We know that if you run multiple operations and can get networks going, you can drive costs down, but everyone is doing that. We also know that work is being subbed out at rates that are not sustainable you cannot run a 44-tonner at £1/mile all the time. We suspect there are a lot of people whose only work is coming at such low rates another indication of corner-cutting.

The economy has shrunk by between 5% and 10%. and that means much less demand for road haulage, so the market is far more competitive.There will always be periods when there are more trucks than business and, hopefully, at some stage we will get back to a better balance between trucks and available work.

When you are talking about successful haulage firms getting less than 5% or 6% returns, it is nothing they should be making more. If they are to reinvest in new equipment and people they have to make decent returns.

We have heard of major transport users unilaterally saying to all their hauliers 'we are cutting rates by 5% next month: That is unacceptable and an abuse of their market position.

At another extreme, if a haulier is cutting corners on maintenance, drivers' hours etc, and there is a fatality, then corporate manslaughter could come into play. It's not just about making a few quid, it is about road safety.

Buy British

As part of the campaign we will be encouraging customers to 'Buy UK Haulage: This isn't just about cabotage; we are saying to people bringing in imports "buy it ex-works and let a British haulier collect it for you". It doesn't matter if it's a customer commissioning a haulier. a big fleet using a subcontractor or a freight forwarder, whoever is buying haulage, we are saying "use a UK company': Phoenix firms is another issue needing research into the scale of the problem. There is historical evidence that there are more failures as we go out of recessions than during, so this problem will get worse in the next 12 months.

It is difficult to generalise about phoenix firms, as there are circumstances

Tags

People: Geoff Dunning
Locations: Phoenix

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