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laulage needs new blood says surve

7th March 1981, Page 5
7th March 1981
Page 5
Page 5, 7th March 1981 — laulage needs new blood says surve
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Which of the following most accurately describes the problem?

AULAGE companies will have to move quickly to replace the resent generation of managers, many of whom are fast-aproaching retirement. So says a survey of the performance of 99 !ading operators, which was published this week.

The report, by ICC Business atlas, looked at the companies' erformance in the three years ) April last year, and made the prnment on the management, aying haulage needs an adeuate second line of managers ) replace the founders of many ost-war operators.

It goes on to criticise the inustry's lack of speed in collecng debts, saying that the averge debt-collecting period rose -om 65 to 73 days over the iree-year period. Last year, /hen ICC made a similar cornlent (CM, March 29, 1980), it tated the average period was 75 ays.

Criticising this delay as "exessive", ICC said: "Hauliers do ot generally receive this sort of enerosity from their own uppliers, and the pressures on ashflow are enormous,"

It attributes part of the trouble 3 cut-throat competition bekeen operators, most of which un five-vehicle fleets, and idded: "Relatively few hauliers lave sufficient confidence in heir relationship with their lients to raise rates in line with 9flation, or even to press for )ayment of outstanding debts." The report says that the corn)anies, which include A One of .eeds, Cleveland Tankers, 3iltspur Bullens, Inter County ixpress, North Eastern BRS,

Robsons of Carlisle, and Wynn of Newport, increased their profit margin on sales from 4.9 per cent to 5.7 per cent, and sales rose by 29.4 per cent.

It says, however, that this was spoilt by the fact that wages rose faster than productivity, and so reduced profit margins. In 1978/79, when average wages rose by 14 per cent, sales per employee rose by 17.4 per cent, and profit margins by 18.4 per cent.

Yet in 1979/80, wages rose by 20.2 per cent, sales per employee only by 16.1 per cent, and profit margins fell consequently by 1.7 per cent. Saying that road hauliers "insist on learning this the hard way", ICC insists: "No amount of noisy lobbying can compensate for this fundamental fact of industrial life."

ICC adds that of the ten largest companies, only two consistently managed to improve their return on assets. They were the somewhat exceptional National Carriers — which returned to profitability yet returned belowaverage profits — and Eastern BRS, which moved its profit-toassets ratio up from 5.4 to 12.6 per cent.

United Carriers, the largest company in the survey, maintained above-average profits, but saw a drop in profitability.

In general, ICC says that an "alarming" increase in companies' dependence on shortterm funding, combined with falling liquidity and the increased credit periods could result in "a real and dangerous decline in financial stability".

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Locations: Newport

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