Build up your profits RHA tells industry
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HAULIERS must do niore to restore respectable profit margins to the industry, a Road Haulage Association vicechairman said earlier this week.
Roy Bowles, one of the country's most successful air freight hauliers, told the RHA's Scottish members that the loss of profit margins has been the biggest blow to the industry.
"Operators must now build up this area in order to renew their vehicles with more upto-date models, to computerise their operations and to pay their employees a good wage in comparison with other service industries,he said.
Bowles laid some of the blame for today's problems at the feet of the industry.
"We are in one of the most capital and labour intensive businesses there is. Before we can operate we must buy our trucks, rent or buy our premises, pay our drivers in advance, tax our trucks in advance, and pay for our fuel as we go.
"Yet many companies still allow the customer two, three or four months' credit be cause they are frightened of losing the business."
He laid Out a stark choice for operators. "We must improve our profitability or continue to work for the banks or HP companies."
One solution was for a higher standard of entry to the industry. That would enSUIT that all hauliers were capable of costing their businesses and calculating realistic rates and that they had sufficient financial resources to maintain and replace vehicles and still make a profit.
But Bowles acknowledged that hauliers are not masters of their own destiny.
Industrial closures, like the planned closure of British Steel's rolling mill at Gancosh, would leave operators chasing new business. "Alternative business will he sought. Rates will be slashed to even more ridiculous levels and hauliers will inevitably go out of business."
• A survey which says that road transport activity is expected to be much quieter in the next three months than is usual for the time of year is "over-gloomy" according to transport companies.
Overdm c. the temporary driver agency, says job prospects in road transport show no improvement over the next three months as they normally do with Christmas approaching and that the relative upswing in employers' confidence of the past two years could possibly be nearing an end.
Transport Development Gnmp chairman Sir James Duncan commented that he expected TDG and transport generally to continue the slow improvement it has been experiencing over the last two years.
I le added: "So far, the vibrations, if anything, look quite reasonable compared to last year.The Overdrive survey was over-gloomy, he said.
National Freight Consortium director of corporate planning Michael Sweet said that activity within NFC was "fairly normal for this time of year-.
He could not envisage NFC's usual taking on of subcontractors for Christmas changing very much. And the transport industry would continue to enjoy stability.