Road transport industry bleeds as fuel hits record highs

Fuel surcharge mechanism introduced ALAN PEAT THE RECORD fuel price is hurting all the road transport industry, but especially the removals industry - which is facing a concurrent overall market downturn, low rates and a plague of fly-by-night operators infiltrating an easy-to-enter sector of the trucking trade. According to Anthony Healey, MD of H&M Removals, the international household removals section of the business has suffered a 50% drop in volumes in the last 24 months. Domestically there has been definite growth in commercial removals” he told FTW, “but negative growth in household, and slim margins. “In months to come we’ll see casualties, with those margins severely under pressure.” Also, rates in real terms are comparable with those of 1992. “The consumers, of course, benefit,” said Healey, “while the industry suffers.” A main answer to these two problems has been to maximise the use of removals vehicles – by stretching the rigs to carry the maximum legal volumes. But now they’re at that limit, according to Healey, this tactic can be applied no further. These problems have been compounded by the on-going fuel price crisis, which has forced up truckers’ costs by a considerable margin. What has been the industry’s answer to this? It’s not new, said Healey, with the removals industry having tried to institute a fuel surcharge on domestic and international business some 3-4 years ago. “We tried to introduce some sort of mechanism for the industry through the Road Freight Association (RFA),” he added. “It was not enforced but advised, and acted as a guideline for removals companies.” But it was flexible enough for each individual company to do its own calculations on the impact of the fuel price. “We’re on 11%,” said Healey, “but others could be on 14%, for example. It is not dictated as a specific cost, but is fluid enough to allow members of the industry to follow their own reasoning.” Be that as it may, Healey told FTW that a lot of operations didn’t support the mechanism, with the suspicion of cost-cutting lurking in the background. This, in turn, was worsened by the continuing flock of new operators entering the industry. It’s an area of the road transport industry which is easy for potential fly-by-night and cost-cutting new members to enter, he said.