Consolidation volumes under pressure

Consolidation volumes remain under pressure thanks to economic challenges and increasing costs which are difficult to recover, says Neil Harris, senior executive: marketing and sales for neutral wholesaler Regional Wholesale Services. “Critical cost reduction is required to become more efficient and competitive as simply passing on costs is currently just not possible. Volumes have been coming off since the latter half of April with all the public holidays and have been under pressure since. Many of our customers have reported up to doubledigit declines in volume compared to the same period last year – as well as previous months whereas they were ahead of the average market growth curve last year and into Q1 this year.” Drawn-out industrial action, acquisitions and in some cases business closures have been further signs of the difficult market conditions, says Harris. “There’s also been a tendency among customers we serve to split their allegiances amongst service providers for better negotiating power which places pressure on yields and sustainability, especially since RWS supplies and maintains one of the most extensive wholesale networks on offer,” says Harris. There is also an increasing move from typical courier companies’ minimum shipment f lyer bag type business to a larger mix of business-tobusiness, retail and B2C freight. “Logistics is all about economies of scale and producing critical mass to keep your transport unit as cost-efficient as possible – especially when maintaining a 15-branch network inland. The consolidation benefit on our line-haul vehicles enables our customers to maximise their consolidation strength into lower costs per waybill,” explains Harris. His outlook for the regional wholesale consolidation industry is however positive, despite current challenges. Harris says RWS continues to focus on its IT offering through integration with its customers from freight acceptance to proof of delivery (POD). “Automation is the key to faster communication, transparency, customer visibility of the delivery process and accuracy of billing. Less reliance on paper f low and optimum resource utilisation is what we are striving for to the benefit of our customers,” he added. INSERT & CAPTION Logistics is all about economies of scale and producing critical mass to keep your transport unit as costefficient as possible. – Neil Harris