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Verators fear that Budget :ants will not be defrayed

28th March 1981, Page 27
28th March 1981
Page 27
Page 27, 28th March 1981 — Verators fear that Budget :ants will not be defrayed
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Which of the following most accurately describes the problem?

'TER the hammering the ulage industry sustained from e Budget, operators -oughout the country are word that increased costs will not absorbed by their customers many of whom already have iancial problems, writes MIKE JTHERFORD.

The proposition that extra fuel

d road tax costs should be ssed on to clients seems logi1 in theory, but what does an lerator do when customers tell -n that others are prepared to the same job at a considerly cheaper rate?

The operator can either fling -nself into a pernicious rate ir, or can refuse to be held to Isom and look for mucheded business elsewhere in a !yer's market.

As one operator said: "I'd oner see my vehicles standing 11 than run at uneconomical les".

The industry has now had no to digest Sir Geoffrey me's much-criticised Budget. it Road Haulage Association tional chairman Ken Rogers id in Nottingham last week at it is a travesty of Governent policy — it revives inflaan.

Mr Rogers attacked the dery x as "absolute nonsense", but did advise Sir Geoffrey to !ut 20p on petrol".

Typical of the predicament )erators face is Philip Pawls, rector of Wellingboroughised A. Lilley and vice-chairan of the Road Haulage Assoation East Midland Area. He lys many customers symithise with difficulties caused increased fuel costs, but they )ve problems of their own and e not prepared to meet the incases.

The company is working at !bruary 1980 rates but its cusmers can still get cheaper quotions from other companies, hich merely adds to the diffiallies. "So many hauliers are oking for work. They'll work at iy rates," said Mr Fowls, Rather than operators telling a istomer a rate for the job, cus!mers are telling operators

Lilley runs 30 tippers and ten general haulage vehicles, and a major customer is now asking for all-in rates rather than pay mileage costs. But the most alarming aspect to emerge from all this is Mr Powis' view that operators would be happy if they could merely achieve prebudget rates.

The story throughout Britain is much the same. Transport manager of C. Barber and Sons of Mitcham, Surrey, Roger Barber, says that some customers will pay the increased costs while others, far from accepting rate increases, are looking for reductions.

The company runs about 17 vehicles, mostly rigids, and has another six off the road. Most of its work involves the transport of paper and paper products — an industry itself in difficulties.

He hopes that all the company's customers will eventually absorb increased costs, but will not be able to gauge their reaction until they receive letters from the company explaining why it is increasing rates, Mr Barber is highly critical of the Chancellor's Budget measures and says that there were other avenues he could have taken. Hauliers simply can't afford to pay for increased costs in derv, he says. "Any haulier who can absorb a 20p per gallon increase on dery was making too much profit."

He also criticises oil companies and the system which allows British Rail to use red diesel, for which it pays no duty. He also agrees with Ken Rogers that the Budget will feed inflation.

Mr Barber, like most responsible operators, sees the dangers of rate slashing. "You can only cut prices so far. I don't like rate wars," he said.

Moving to the North-east, Bells of Ashington is a Northumberland-based company with 20 drivers. It currently has some of its vehicles off the road and concentrates on general haulage, such as foodstuffs, cosmetics and paper.

The company will try to recover increased fuel costs which are expected to add about four per cent to customers' rates, but Bells' administration manager, Alan Campbell, is not so sure that the customer will be willing to meet the increases.

Bells have lost work over the last year and currently are operating at January 1980 rates. Since then there have been several fuel increases, and it now seems inevitable that hauliere demand increased rates.

"To operate economically, WE need a fair rate for the job," saic Mr Campbell. The 15 per cenl increase in vehicle excise club, will not prove such an immedi• ate burden, but again, the in crease must be passed on if rea• listic rates are to be charged.

Down in the Midlands, Wol• verhampton haulier David White anticipates a five per cent in crease in rates by April 1, but like others, is worried that custom• ers won't pay. "Anyone ir haulage these days who is confi dent is a bit of a fool. But I hope our customers will see reason,' says Mr White.

Already, Mr White has had E negative response from one cus• torner, and two others, facec with the reality of rate increases are asking for reductions. MI White is already being undercu. by rivals by as much as £37.5( per day for a lorry and drawbar.

He runs three vehicles on th( Continent, five rigids in the UK and also has one drawbar. Fou more vehicles are off the road.

The last operator CM spoke tc was managing director of C. But Ltd of Northampton, Cyril Starr His company concentrates or general haulage and has 65 tip pers.

Like his fellow operators al over the country, Mr Starr say; that smaller customers arE turning to cheaper transpor elsewhere and forsaking reliabil ity and service which estab lished, responsible companiel give.

Luckily, some customers arE equally responsible and an meeting the necessary cost: charged by the operator. With rampant rate war, and a viciou! budget, Mr Starr does not knov how some hauliers will survive.

While it might seem attractivE to try and pass on extra costs b the customer, declining indust !lal activity throughout the UK operators' customers have thei own problems. It could bE argued that the customer can a: ill-afford the Budget increases a: the operator.

So who pays?


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