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MI THE FOOT AND MOUTH crisis spells disaster for livestock

8th March 2001, Page 41
8th March 2001
Page 41
Page 41, 8th March 2001 — MI THE FOOT AND MOUTH crisis spells disaster for livestock
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Which of the following most accurately describes the problem?

hauliers and is causing increasing problems for other operators working in rural areas. But the long-term economic trends are goo& unemployment is at its lowest level for years, and the Treasury is 1,4)ebn in the black This was reflected in the latest Budget (for full details see our web site at www. roadtra nsport.

net and the review in next week's CM).

So why are a growing number of hauliers going to the wall? Shouldn't hauliers be reaping some of the fruits of the prosperity they helped create?

Remedial action

The feeling in the industry seems to be that this will happen only when the government really gets to grips with the issues operators have been complaining about for ages, and the effects of that remedial action begin to filter down.

David Russell, press officer for the Freight Transport Association, is prepared to look on the bright side: "We will have to wait and see if the government's concessions make any difference to the haulage industry, but hopefully they will," he says. "One of our main problems has been the U Ks high firel tax, which means hauliers can easily he undercut by foreign competitors.

"The fact that the pound is so strong against the euro doesn't help either, because it always costs more when you're charging a client in sterling, winch is obviously a problem for international opera tors," he adds. "However, the euro is starting to strengthen slightly now.

"But at least the government is trying to do something. It Ins produced a Doom fund ID improve best practice and training in the industry; it has also made progress in reviewing vehide excise duty and Endo:hied VED rebates as well."

Russell warns that the problem offt;11 immigrant hiding in trucks has sent some small businesses to the wall: Eurotunnel has admitted the problem has increased dramatically this year.

"It doesn't matter whether the driver realised the immigrants were there or not; the ecmpanywitefined anyway," he points out. "So if five stowaways are found on a driver's truck, the conipanywillpay,Pri-nkteacne—and aLacmcifine is enough to finish offa small operator with tight profit margins."

There are no offichlfigu res to show exactly what the business failure rate is in the industry. But if members haven't renewed their subscriptions the Road Haulage Association will contact them to find out why.

RHA Yorkshire area manager Margaret Edmunds says companies often decide to call it a day before they actually go bankrupt, and because they settle their bills and go quietly they won't figure in anycificial lists.

"In January alone seven companies in this region have ceased trading of their own volition, and 32 members cited fimrcialeitficulties and couldn't pay their association subs," she reports.

Edmunds isn't too impressed with the government's efforts so far: "It doesn't do anything without a two-year investigation first. As for the Doom it

wants to invest in the industry, fist it was going to go on new vehicles, now it wants to spend it on IT, which is of absolutely no use to anyone except the big companies. Small owner-drivers won'tbenefit at all.

"There's been a decrease in start-up haulage companies and al% in HGVlicence applications. Why would anyone want to bother? With a 2-3% profit margin you'd be better off putting your money in the building scw:ietand the VED rebate is too little too late."

Steve Williams, RHA information officer for the SouthEast, believes that overall there are more firms going out than coming in: "Fleets are also being downsized, for example from eight to fre or from 15 to ro, in an effort to stay viable."

One business to hit the skids recently was the Fastrac.k Group, a lvlkIhnds4xised domestic and international parcels and freight forwarding business (see box, right). KPMG corporate recovery partner Allan Graham, who was one of the receivers, believes the reasons for its failure were mostly to do with its consumer side.

Low charges

"Fastrack delivered to people's homes, which is not very costeffective," he says. "You're talking about men in delivery vans having to make maybe three trips to the same place before someone's in, with relatively low charges, whereas business-tobusiness is more lucrative.

"And you've also got the disadvantage of trucks travelling all round the country to make dmpoffs and then having to come Era empty. The aimpany lnd gram


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