As a European Transport provider we are seeing unprecedented levels of challenges emerging in the European haulage sector which doesn’t bode well for the future unless some sharp action is taken. However, sharp action needs clever heads to come up with the right levers to pull and as it stands, no-one seems to have the answer. The driver shortage is of course the lead concern across an industry caught up in a whirlwind of trouble.
Being based in Felixstowe, the largest UK deep sea port, we hear every day similar problems facing UK container hauliers. Felixstowe Port itself hasn’t done much to help the situation with a catastrophic implementation of their new IT system forcing major lines to move elsewhere. Stuart Todd of Lloyds List has written recently the following article which goes some way to explain the current feelings in the UK haulage industry.
“The current squeeze in container haulage capacity in the UK, which has led to increasing levels of delayed and failed pickups and deliveries, is a direct consequence of the long-term, structural decline of road freight, according to one shipping line experiencing the difficulties first-hand.
“While one-off and external factors such as the disruption at Felixstowe, road network congestion, rail availability and high cargo volumes have aggravated the situation, the underlying cause is the chronically poor health of the trucking sector generally,” Geest Line’s commercial general manager, Jeremy Bristow, told Lloyd’s Loading List in an interview.
Rising operating costs and low margins mean there has been little incentive for many firms to invest in new vehicles despite demand rising for haulage, while driver shortages − symptomatic of a developing recruitment crisis − have compounded their plight, he said.
“The result is that many hauliers are under huge pressure, struggling to make money and are taking on more work than they can handle with too few people.
Such fragility in what are key service providers leaves Bristow to conclude “that we are not paying enough for our haulage. I think the real cost of running containers around the country is far higher than a lot of us in the shipping and logistics industry are paying for.”
A niche carrier, Geest Line operates five ships between Dover and Vlissingen, in the Netherlands, and the east Caribbean, he explained. It carries between 5,000-8,000 pallets of bananas per week on the eastbound leg, while westbound loads are made up of anything from a 40-foot reefer full of chicken to a JCB to a pallet of baked beans. Most of the difficulties the company is having with haulage concern exports out of the UK.
“We probably do 50-80 container moves a week, which is not huge; we’re not an OOCL or Maersk. It can be 70-100 containers a week on some occasions and the biggest, biggest issue we have is to get haulage arriving on time for loadings and discharge. And we’re pretty lucky, in the sense that if we give our hauliers 48 hours notice, they can probably get it covered.
“However, while many of our customers are flexible, there are others who demand a 90-minute window for a haulage pick-up − even a 20-minute window − and we are getting to the point where we’re saying, even to our biggest customer: ‘We can’t cover your haulage any more’. They have spent a lot of money with us but we just can’t do it. Whereas 10-15 years ago, out of 10 jobs, say, eight would arrive on time, now, invariably, 50% (of jobs) are just going wrong all the time.”
For example, Bristow said last week Geest Line had lost £800 (US$1,000) on one job because the driver was two hours late. “So we had to pay for what was a wasted journey. We then reloaded three days later. And that’s just one example; you might have five of those in one day.”
He underlined that flexible customers can accept an hour’s delay as long as they are kept regularly informed.
“But when it’s the bigger logistics companies, who may have timed to be loading or unloading 50 trucks in a single day, problems can and do arise because if you miss your slot, it’s very difficult to get it worked − and there’s a cost to that. We would love our customers to do more merchant haulage themselves because, frankly, it would remove what has become a very taxing and costly activity.”
Bristow said recent reports of the imposition of a six-day delay on export collections of boxes out of the UK by one major shipping line reflected the scale of the dearth in haulage.
“The big lines’ problems are probably compounded 10-fold compared to ours,” he noted. “Whereas we can deal with the small to medium-sized haulage companies, they need to use everybody given the number of boxes they need road transport for.”
He went on to highlight the overall shrinkage in the haulage pool. “This summer, one of our largest hauliers, which was doing 20-30 loads for us over 72-hour periods, went bust,” Bristow noted.
“About a month ago, a haulage company based in Southampton, which had 50 trucks on the road, went out of business, hitting some of the bigger container lines hard. I can only see the capacity situation worsening as we move into the peak season.”
Returning to the thorny issue of road haulage rates, Bristow said: “You’ve really got to question whether shippers are paying too little for container haulage. I am not suggesting there would be a rapid improvement in the capacity situation if rates were hiked, but it would be a starting point in getting the road haulage sector out of its present predicament − where it simply can’t grow and offer the kind of service that is required.
“As an industry, we are all ‘stakeholders’ in container haulage, and yet at the same time we want to drive costs down and increase efficiency. The current shortage shows we’ve reached a point now where we can’t have both.”
So there you have it. We can’t argue with the reasoning and prices will need to rise to make inroads into fixing the issues listed. However we feel trucking in general has an image problem, something that has not been taken into consideration with regards to recruitment and we will be writing about this very soon.
Until then, adieu
Original article published: https://www.lloydsloadinglist.com/freight-directory/news/UK-box-haulage-squeeze-is-%E2%80%98a-consequence-of-structural-decline%E2%80%99/72861.htm?cl=article_1&elqTrack=true&mc_cid=9d0c76ff62&mc_eid=f2d7fc2386#.W6EBYehKi70