Successful show and campaigning

The CV Show was a great success both as an event in itself and for the RHA, with existing members visiting the stand, new members recruited, services sold, and RHA campaigns being promoted. It was a real pleasure to meet and host Patrick McLoughlin MP, the Secretary of State for Transport, and to chair a meeting with a small number of members of RHA and our partners – the SMMT and the IRTE. This was followed by a tour of the show, which presented a great opportunity to make a number of points to the most senior transport politician.

We also welcomed Rob Flello MP, who is chair of the All Parlimentary Road Freight Group. The RHA is now funding an Intern – Sam Hargreaves – who works in his team at the House of Commons but who is employed by RHA. That is a real first for RHA and we should never miss an opportunity to point this out to members and non-members alike, as it gives us a direct link into the political machine.

As part owners of the CV Show, it was particularly good to hear so many exhibitors saying how pleased they were with visitor numbers and quality; and several made some sort of commitment to come back in 2014. Several companies, including HGV manufacturers, have already spoken to Crystal Communications – who market and operate the Show for the partners – and provisionally booked space. All in all it was a fantastic three days for the RHA – congratulations again to everyone who contributed to this success!

March saw yet another success for Fair Fuel UK, with another planned duty increased not just postponed but cancelled altogether. The organiser of Fair Fuel UK, Peter Carroll, approached RHA and FTA at the beginning of 2011 with an idea for a high profile political and media campaign designed to lobby for a new approach to fuel duty rises in the corridors of power in the Houses of Parliament and I and my FTA colleague, Theo de Pencier, were quick to recognise the benefit of the two organisations working together to fund the campaign, agreeing also that the campaign should relate to all fuel users. As a result, other backers have come on board and the challenge now is to move up a gear and to look for a real reduction in duty, rather than simply fighting proposed increases. Having said that, it is right to reflect on our success so far: March 2011, 5p inflationary rise postponed and a 1p cut given, smaller rise of 3p now planned for September 2011; August 2011, 3p rise postponed to 2012: January 2012, 3p rise postponed again to August 2012; August 2012, 3p rise postponed to Jan 2013 and January 2013, 3p rise cancelled March 2013, 3p rise planned for Sept 2013 cancelled. There is absolutely no doubt that the Fair Fuel UK’s campaign, of which RHA is a major and founder member, has been spectacularly effective and is now a significant influence in Parliament.

Geoff Dunning

The CV Show: see us on stand 4F30

The 2013 Commercial Vehicle Show will be taking place just a few days after this edition of ROADWAY is delivered to members and I hope we will see a large number of visitors at the show itself and on our stand – 4F30.

The RHA’s over-riding objective is to help its members to be profitable, compliant and sustainable and you will be able to find out everything you need to know about this at the show.

In each of the three main strands of RHA activity – our trade association, our commercial services and our lobbying and campaigning – you will find support for your business and assistance to help make you profitable, compliant and sustainable.

There is not enough space in this short column to explain the many ways we can help, but I can briefly outline some of the main areas covered by the trade association fee that you pay.

Getting the right rate for the job is difficult at the best of times, so knowing what is profitable and what is not allows you to make the right decision when it comes to some of the more ridiculous rates on offer. RHA Cost Tables help you to do that. A fundamental element of your costs is your fuel spend and knowing what you are paying is vital. Our weekly fuel price survey helps you to do that. Staying on the right side of VOSA is a complex task these days, with wide-ranging legislation affecting every aspect of your operation, so up-to-date easy-to-understand explanations of the legal requirements is a must-have for your business. ROADWAY, our Helpdesk and our area managers help you to do that. Saving fuel is a must for every operator but reducing your carbon footprint might not be a high priority – that depends to a large extent on the demands of your customers. Our specialist technical manager can help you to do that.

Whatever you are trying to do, be it making a profit, staying compliant or demonstrating a responsible position in respect of sustainability, there are ways that the RHA can help you. Some activities are included in your membership fee and there are a few examples above. Some are commercial services, such as training, tachograph analysis, O-Licence audits or contracts of employment, each designed to offer a quality product at a competitive price. And our lobbying and campaigning covers areas intended to contribute to a level playing field, including our action in respect of insolvent companies which undercut those who seek to make a profit.

One way or another, the RHA is helping you to make a profit, to comply with the various rules that apply to the industry and to support you in contributing to reducing the impact of climate change. There has never been a better time to be a member of the RHA. Come along to stand 4F30 at the CV Show to find out more.

 

Geoff Dunning
Chief Executive

Profitability, compliance, sustainability

 

The RHA’s Board of Directors recently confirmed a new five-year strategy for the Association. We will focus on three priorities for the industry: profitability, compliance and sustainability – and we make no apology for putting profit first.

We know that our members are in business to make a profit, and we will be working very hard during 2013 to support companies in that aim. As part of that work, our Board recently decided to cancel the membership of any business that reaches a formal agreement with its creditors and to look extremely closely at their trading patterns in the months or even years prior to the agreement before accepting any application to have the membership re-instated. The issue of ‘phoenix’ companies has long been a thorn in the side of the industry, and that is why the RHA will be discussing the performance of directors of insolvent companies with the Senior Traffic Commissioner as the year develops.

Compliance remains a key issue, and the UK should be rightly proud of the generally good safety record that British-operated trucks have demonstrated over the years. Our view is very simple: as long as there are those who deliberately or repeatedly flout the law, the attention of the enforcer (VOSA) and the regulator (the Traffic Commissioners) should be focussed on the non-compliant, leaving those operators who put a great deal of effort into getting it right to go about their business without being distracted. Needless to say, our industry and our operations are technically complex, so occasional contraventions may occur, but it should not be difficult for a reputable firm to demonstrate simply and quickly a culture of compliance that will be acceptable to both VOSA and the TCs.

Sustainability is high on the government’s agenda and therefore is important to the industry, but we have a good track record of managing carbon dioxide output – even though we talk in terms of fuel consumption. Our priority for 2013 is to show the legislators this is our way of tackling the issue, even if it doesn’t fit with their language.

I hope that everyone has the dates 10-12 April in their diaries for a trip to the Commercial Vehicle Show at the NEC in Birmingham. An excellent event is expected, with wide-ranging representation from all aspects of the industry and, at the time of writing, we have over 350 exhibitors who have taken space.

The Euro 5 versus Euro 6 argument will no doubt be high on many people’s agenda; and operators will be deep in conversation with manufacturers about lead times, fuel consumption and, of course, prices. We are also delighted to see trailer manufacturers well represented at this year’s show and there is bound to be interest in progress with the longer semi-trailer trial. Last year’s show saw a few of the first examples, so this year we will be able to compare notes and experience.

 

Geoff Dunning
Chief Executive

 

Bad debts lead to unfair competition

Writing this immediately before Christmas enabled me to think ahead and consider what challenges the industry and the RHA will face in 2013. One thing is clear: the economy will struggle to recover, with talk of a triple dip being all too common in the latter months of 2012. Christmas gives much of the haulage industry a welcome boost but it doesn’t help those who specialise in other sectors, particularly construction which remains sluggish.

One feature of the recession to date has been the shrinkage of the industry, with the number of O-licences, the size of the national fleet and the number of new licence applications all showing significant reductions compared with 2008. This was a natural consequence of the decline in demand seen across the economy and represented the inevitable attempts to balance supply and demand in an industry which is all too often seen as a commodity, rather than a service.

This shrinkage also put the spotlight on the consequences for individual businesses, with hundreds of firms closing – willingly or otherwise – because they have run out of cash. And we must not lose sight of the fact that those firms which fail have clearly been running at a loss for some time, all the while competing with firms which are not recording losses.

The trade press regularly reports on this firm entering into a Creditors’ Voluntary Arrangement (CVA), that firm entering into administration or another firm appointing a receiver or a liquidator. In every case debts will be unpaid – often running into hundreds of thousands of pounds – and often the money is owed to Her Majesty’s Revenue and Customs (HMRC). In other words us, the taxpayers. Such actions are always legal, with very few directors being pursued for wrongful trading, but other companies have not been able to write off large amounts of debt, but continue to trade and remain solvent.

This begs the question of what information is given to the Traffic Commissioners (TCs) about the obvious change in circumstances represented by the financial position, with a recent Transport Tribunal decision making clear that financial standing should be met continuously, not just at a given moment in time. Furthermore, the TCs will no doubt have a view on operators who have failed to notify them as soon as their financial situation made it difficult if not impossible to meet the financial standing rules.

The RHA’s position is clear. Our Articles of Association require that a membership shall cease if a company enters into any agreement with creditors, be it CVA, administration or receivership, and the Board of Directors recently confirmed there would have to be exceptional circumstances for a firm in one of those situations to be re-admitted. Limited company status extends significant protection to both directors and shareholders while imposing relatively few obligations in respect of creditors, particularly HMRC. The RHA believes financial management is as important to good repute as OCRS scores and urges the TCs to look more closely at firms that cannot pay their debts on time.

Geoff  Dunning
Chief Executive

If it doesn’t pay, walk way!

In the November edition of ROADWAY I highlighted the dangers associated with the very low haulage rates currently, and regularly, being offered in the UK.

I recently attended the first Commercial Vehicle Forum. Organised by the CV Show Partnership, much of the debate focussed on unsustainable haulage rates and one statistic stuck in everyone’s minds. Motor Transport’s latest analysis (July 2012) showed that the average ratio of profit to turnover in the top 100 UK haulage companies is down to a frightening 1%. Two panel members – Wincanton and ABE Ledbury – confirmed that getting customers to pay sustainable haulage rates was a real problem for both large and small hauliers.

Long-term RHA member and author of the RHA Cost Tables, Brian Fish of DFF International, says that obtaining higher rates is, without doubt, the most critical issue facing the haulage industry today. One of his, and my, biggest concerns is a culture of ‘one-rate-fits-all’ that has become the accepted norm and is used widely by operators when quoting for work. Brian says: “There is no such thing as a ‘fits all’ rate per mile. Rates should be calculated by determining: the time required (wages and overheads) covered by a standard cost per hour; the distance covered at a standard cost per mile (fuel, tyres, R&M and lubricants); any job-specific costs, such as subsistence and tolls; plus a margin of profit.

“These costs mix together in infinitely varying proportions, leading to rates per mile which depend on miles covered in a given period of time.” (See table)

I am fully aware that the gulf between calculating sustainable rates and actually getting the customer to pay is often massive. In France, following tariff deregulation in 1987, the haulage industry went into meltdown as the drivers’ unions took action over working time and pay. The deregulation led to excessive internal competition, which squeezed haulage rates and pay. So is there a place for a national minimum haulage rate in the UK?

To get rates back up to sustainable levels – and we must do before more haulage businesses go to the wall – something has to change. I believe the industry must adopt a common approach when calculating and agreeing rates. At the Commercial Vehicle Forum, Andy Boyle (AEB Ledbury) said on the subject of rates: “Dare I say, maybe the time has come to adopt the mantra of if it doesn’t pay…walk away!” Now that is a challenge if ever I heard one. But if you all did it, the buyers of haulage would soon get the message.

The motorway and trunk road network provides the haulage industry’s delivery and collection routes and the efficient operation of that network is essential to the industry. However, it is plagued by delays and disruption, as every morning’s traffic news demonstrates. Each morning there is a list of traffic jams caused by accidents, roadworks, adverse weather or simply the number of vehicles that use the road. In fact, there are many locations where congestion is such a fact of life that it doesn’t even merit a mention on the bulletins.

We all know there isn’t enough cash available to build roads which can cope with the peaks we see across the country but there are dozens, probably hundreds, of places where relatively modest investment could bring dividends in the shape of reduced jams and delays. To name a few: the M6/M1/A14 junction has caused massive delays for years and only recently has the government re-issued proposals to improve this junction; the A43/M40 junction is laid out in such a way that delays are inevitable, forcing the northbound and southbound A43 flows generated by the M40 to cross. This is madness, but there are no plans to improve it.

I am sure members have their own ‘hit list’ of locations which are crying out for improvement, so the government’s apparent intention to publish a consultation document soon on what the network should look like and how it will be funded is welcome. But I’m not holding my breath.

Geoff  Dunning
Chief Executive

Roadway November 2012

On the first page of November’s ROADWAY operator profile (pages 46 – 49) our intrepid reporter, Bob Tuck, assures readers that the magazine isn’t getting on its soapbox about the green agenda.

Talking about one of the key drivers behind the success of a Bootle-based bulk tanker operator he says: “Terms like ‘reducing our carbon footprint’ have come more into vogue and, while initially they may have been mooted by the politically correct ‘global warming’ fraternity, the idea is something the logistics world should not only adopt, but also champion.

“This isn’t ROADWAY getting on its high horse but simply an echo of the beliefs of Steve Granite, MD of Merseyside-based Abbey Logistics Group.” Granite goes on say: “If you are more environmentally friendly, then you are more cost effective. Cut out waste and you cut down on cost.”

Very wise words I hope you will agree. I didn’t intend to make this edition of the magazine all about reducing: the amount of energy we consume; the amount of pollutants we produce and the number of empty miles we run. But as you read our reports about: The IAA Commercial Vehicle Show; the road test of Daf’s XF105 460 ATe 40 tonner; the Abbey Logistics Group profile; the Clayton/Don-Bur twin cargo semi-trailer and Michelin’s latest tyre offering, you should begin to realise that our industry has gone green.

If you missed that particular boat, I suggest you get paddling and catch it up quickly, because if you don’t you will not be able to compete in the brave new world of road transport and logistics. Thinking back to Bob Tuck’s thoughts about ROADWAY and soapboxes…he was wrong. We are on one.

But ‘Going Green’ isn’t just about climate change or stopping the Maldives from disappearing beneath the waves. These considerations are none the less important – I don’t want to loose my favourite holiday destination – but what ‘Green’ means to you is using fewer resources, working more efficiently and ultimately spending less to achieve more. And that equals remaining competitive, generating bigger profit margins, growth and securing your future. Things many hauliers have been struggling to do over recent years. Yes lobbying for a fairer deal from government also has its place, but the clever time and money is being invested in the new technologies, which can help hauliers and logistics companies – not just in the UK, but also across the globe – tackle the biggest challenge…spiralling fuel costs.

But as ever there is a spanner in our works. And it isn’t the obvious one. It is the UK’s Annual Investment Allowance, or AIA. Reduced from £100,000 to £25,000 in April, Jack Semple expertly points out (on pages 26 and 28) that small to medium sized enterprises (SMEs) in our sector have dramatically reduced the amounts of capital they are willing to invest in their companies. For example, rather than buying new ‘Green’ fuel-efficient trucks they are renting to cover shortfalls or to avoid replacing fleet. This in turn means fewer older trucks are being taken off the roads and the expected pull forward of Euro 5 truck orders prior to the Euro 6 implementation in December 2013 has not happened…yet. And unless SME hauliers can change their approach they could miss the boat while the rest of Europe grabs all the production slots.

The RHA is calling for the government to do something to stimulate the SME sector and help it invest in its future.

Returning to the theme of ‘Going Green’ it is in this area where the investments should be made. SMEs are the backbone of this industry and the economy. If they miss that boat we are all in trouble.

Peter Shakespeare
RHA Publications

We must have ethical supply chains

This is not an easy column to write and many people might feel uncomfortable with the content. But there is an elephant in the room that the road freight sector ignores at its peril.

Everyone in the supply chain has a responsibility to ensure that loads are carried by operators who take their obligations seriously and they must understand that, should the worst case happen and a vehicle be involved in a fatal crash, the role of original consignor and every contractor in the chain will be investigated. How many organisations choose to turn a blind eye to the way that loads are carried in their name? How many organisations take the necessary steps to ensure that fully-compliant operators carry all the loads that are carried in their name?

The trade press has recently featured a number of items referring to comments from various quarters about very low haulage rates which are currently – and regularly – being offered. Through the RHA’s four councils around the country, I hear such reports at almost every meeting. This is an issue that is neither new nor surprising, but what it represents should concern every customer and every haulier in the country, large or small – RHA member or not. The fact is that the levels of some rates being offered mean that the work these relate to cannot be done legally if it constitutes the majority of work that an operator is doing.

We all know that jobs which are below cost are sometimes justified because they, at least, reduce the cost of re-locating a vehicle: operators have to make a judge-ment call about such work. The problem is that some operators appear to rely on this kind of work and are therefore running at below cost most, if not all, of the time. 

In such cases the operator is faced with the unpalatable choice of going bust or cutting corners by operating illegally and, regrettably, some choose the latter. This should of course be kept in proportion, and I am not suggesting for a second that such behaviour is commonplace – far from it.

The vast majority of operators in the industry make strenuous efforts to operate legally, but the fact is that a small minority
of operators who do cut corners deliberately put both road safety and the survival of other, reputable businesses at risk.

VOSA and the Traffic Commissioners have roles to play here: VOSA should be identifying the serially non-compliant and giving the Traffic Commissioners the evidence they need to take these people
out of the industry and the RHA will campaign for more effort to be devoted to such action. But customers must understand that compliant haulage has a price and the industry must also do all it can to put its own house in order. If it doesn’t pay, walk away.

Geoff  Dunning
Chief Executive

Staff skills levels: What do you expect?

Any company, large or small, relies heavily on its staff. Every employee can affect the performance of the business – its profitability and relations with customers in particular. So what do expect from your staff? Obviously, you will expect personal qualities such as honesty, punctuality and reliability, but what about skills?

Skills for Logistics (SfL) is going to try to answer this question through a number of groups which were launched in London recently. I have been invited to chair the Drivers’ Group, and a number of RHA members have already volunteered. I have also asked the Freight Transport Association and the Chartered Institute of Logistics and Transport to nominate people to help with this vital work.

The first meeting will take place on 4 October and we will welcome volunteers. If you are interested please contact Vicki Ball at SfL on: vicki.ball@skillsforlogistics.org

The work will also cover the full range of occupations within our sector with groups including warehousing, fleet management and international operations. Each group will be chaired by a different organisation in the industry. Again, please contact Vicki if you are interested in occupations other than drivers.

SfL has changed significantly in recent years, with government funding now being handed out on a project-by-project basis, as SfL – like all sector skills councils – is expected to be self-funded in future. You may have heard of some of the projects it is currently dealing with, such as the development of a Logistics Academy and a Logistics Guild.

The Academy is a unique partnership between logistics companies, government and other key stakeholders, including logistics training and skills development specialists. Being a one-stop-shop, service will be key to the Academy’s success by ensuring that employers can quickly find relevant training solutions to meet their business needs.

The Academy will help employers to develop solutions to address skills which are unique to the logistics industry, and will tackle many of the long-term problems the sector faces in maintaining a skilled workforce and continued business success. In addition, the national network of Academy Licensed Partners will provide high-quality, demand-led solutions that meet employers’ requirements.

The Logistics Guild will be launched shortly and is designed to attract, retain and develop new entrants, helping people to identify what sort of jobs require their skills, so they can map career development and help employers find the people they want for their businesses. Like all the projects that SfL has been commissioned to carry out recently, they are designed to be self-funding in future: driven by employers and delivering what employers want.

The RHA is indirectly involved in SfL’s work, as the majority of the organisation’s contact is directly with employers. For more information see: www.skillsforlogistics.org

Geoff  Dunning
Chief Executive

Profitable, Compliant and Sustainable

‘Cash is King’ is a well-worn cliché, but is as true now as it has ever been.

Another truism is the fact that you can run at a loss for a while, but you can only run out of money once: the bank will pull the plug and you face insolvency and the failure of your business. This means that running at a profit must be the primary aim of any road freight firm.

Unfortunately we are now in the fourth year of a double-dip recession, with conditions being as difficult as many of our members can remember. But – and it is a very big but – there are businesses out there which are making a profit, so it can be done if you do the right things. Put simply, it has never been more important to know your costs and to minimise them; to know your customers and to manage them and to know where your money is and to manage it.

Easily said, I know, but common sense is not always common practice and the long and growing list of company closures contains many examples of people who have lost sight of those basics. While profitability is the overriding priority for any business, road hauliers must also remain compliant at all times, because if things go wrong here, there is a real risk that your Operator’s Licence could be threatened.

The O-licence is a pre-requisite for operation, but we constantly come across businesses which have lost sight of the need to maintain constant vigilance on performance. People become complacent, lazy or even careless and if this results in standards dropping, it only needs a single incident to bring your operation to the attention of VOSA. No one, large or small, can afford to lose sight of the undertakings they make when applying for a licence, but I wonder how many people can remember the key conditions, let alone all of them.

This is even more poignant if you have been through a public inquiry which has resulted in you having to agree to additional undertakings: if you make promises to a Traffic Commissioner you must deliver – otherwise disciplinary action against your licence is almost inevitable.

At first glance, sustainability may not be high on many operators’ agendas but it is a proxy for fuel saving, so it should be. Whatever your views might be on climate change or global warming, the most significant element of your operating costs is your fuel-spend. Yet, somewhat scarily, surveys of the industry always reveal a small, but worrying minority, who claim they do nothing to either monitor or manage fuel use. What planet are these people on? How do they know what their costs are? More importantly, are these firms the most likely to undercut rates and damage both their own prospects and those who do the job properly?

The RHA is here to help you to be profitable, compliant and sustainable in the most difficult of economic climates. Getting things right makes survival all the more likely. With the RHA’s support you can be a survivor.

Geoff  Dunning
Chief Executive

Fuel duty rise stopped: Olympics begin

I hope that the latest success on the part of FairFuel UK has, at last, laid to rest the often heard claim that the haulage industry doesn’t have a voice with government.

This campaign, which is supported directly by the RHA together with the FTA and RAC, has been spectacularly successful and has proved beyond a shadow of a doubt that a well organised political and media campaign can change government policy. In fact, it can not only change it but change it in an area that has always been very difficult – taxation. Having said that, we know that the government is in deep financial water and there has to be the real prospect of another increase being proposed.

I can only hope that the sceptics will accept that, next time, they should put their weight behind the campaign, write to their MP and come down to Parliament to ensure that our voice gets louder still. Put simply, every haulier in the country is now saving hundreds of pounds per vehicle per month and that is a direct consequence of FairFuel UK. I know there are those who will say that non-members get the benefit as much as members, but that is the price we pay for all our lobbying and campaigning, so I urge all members to encourage any operator they know who is not a member to get themselves into the RHA.

As we move into the Olympics period, we have to recognise that the task of keeping London and the rest of the UK moving and the planning required in the run-up to the Olympics has been as important as the event itself.

Many stakeholder organisations have been involved in the development of the transport strategy and the RHA’s voice has been instrumental from the onset. While the Olympic Games 2012 offer opportunities for businesses, road closures during the Games have the potential to disrupt deliveries to and by businesses operating in London.

No traffic, other than designated Olympic Route Network (ORN) traffic and emergency vehicles, will be given access to Games Lanes on roads to the Olympic venues between specific hours throughout the duration of the Games and for a short period before and after.

Amid all the UK scrutiny of the £9.3bn budget, the security fears and the danger of transport meltdown, has the RHA done all it possibly can to help its members and the wider transport sector? Well, the answer is a definitive yes. Peter Hendy, the Commissioner for Transport in London, regularly pours praise on our Association relating to our input which has helped Transport for London (TfL) formulate its final transport plans.

We have briefed and encouraged members to plan and communicate with their customer base. And, to help facilitate this, we have enabled all of the latest updates from TfL to be made available on our website. We all hope that the Games will be an unparalleled success.