LETTER OF THE WEEK
Page 16
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What we need is more profit for the industry
WITH REFERENCE to the perpetual debate between rebate or stabiliser, what would be the outcome for the transport industry? Cheaper costs? Yes. Cheaper costs for customers? Yes. More profit for transport? No!
What the industry needs is profit, to keep our trucks rolling. If the cost of fuel goes down, so will the rates.
The tail that wags the dog, ie the customers, will just put down the rates that they will be expected to pay – and transport will be no better off. If the companies could make a profit, the cost of fuel would not matter, it’s the rate hauliers get for transporting goods that is the root of the problem.
I understand that in Germany the rate is set by the industry for all miles travelled and no one is allowed to go below it. Great, all on a level playing field, and only the service the transport company gives will separate the good from the bad.
As we hold up the German economy as the standard, why not in transport too? Because the customer (the tail) dictates to the industry (the dog) what prices they are prepared to pay. Take note of farmers’ milk prices recently. The transport industry is on its knees trying to extract every last penny out of efficiencies, well, there’s no more left.
What is the point of transport companies carrying on, if the return for investing millions in transport for a profit margin of less than 5% when some customers’ return is 19%, a slight misbalance I think, tail wags dog!
Your magazine, which I suppose is the champion of the industry, should look at this part of road haulage instead of taking the easy option of politicking the fuel costs. It’s a no brainer saying ‘let’s try for cheaper fuel’; everyone wants cheaper fuel, but the country, which is up to its neck in debt, needs to get out of debt.
So the chancellor won’t be doing anything about fuel tax for the distant future, no matter what the road transport industry says.
The road transport industry is being bullied from both ends again; the customer and government. If you ever see a two-tailed dog, let me know how it works.
Ron Smith Director, Transport Training Solutions