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Undercutting rates undermines industry

2nd June 2005, Page 16
2nd June 2005
Page 16
Page 16, 2nd June 2005 — Undercutting rates undermines industry
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Which of the following most accurately describes the problem?

IF OPERATORS want to boost profitability they must stop stabbing each other in the back, according to Framptons Transport Services boss, Paul Frampton.

Speaking at the RHA's annual conference about his firm's Barcelona operation, he said cheaper fuel, cheaper income tax, and cheaper national insurance help it generate a 21% gross profit. Frampton's Spanish freight forwarding business runs no trucks; in the UK, where he operates 55 trucks, his profit margin is 8.4%.

Frampton said there are too many hauliers in the UK chasing too little freight for too little money: "Spain has a licensing system that impacts on capacity control — here we give anyone an operator's licence, conditional only on status issues, not whether the market needs them or whether they have the commercial tools to succeed without compromise.

"The trouble is some hauliers don't know when their costs are going up," he added. "If they do, they can't work out what that means in terms of rates and can't begin to know how to approach their customer.

"And then they go and cheat to save money and take another haulier's traffic at lower prices. because they need the cash — even if it is less.

"Hauliers continue to complain about poor profit margins but continue to compete against each other. We need to stop this."

Tags

People: Paul Frampton
Locations: Barcelona

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