Road Haulage Association - Geoff Dunning

The escalating price of fuel causes obvious problems for hauliers, and the added problem of the worst recession in many years simply makes matters worse, with customers themselves under extreme pressure and the merest hint of a rate increase sometimes resulting in work being put out to re-tender.

Having said that, road haulage has always been competitive, with most members accepting this situation, as long as there is a level playing field.  Sadly, there are those who are prepared to compete unfairly, including the ever present ‘cowboys’, who put lives and the reputation of responsible hauliers at risk by cutting corners.

In recent years we have seen a steady increase in the number of foreign hauliers taking business from UK operators as a result of both cheaper diesel and low – in some cases very low – wages paid to drivers.  As long as ten years ago the Government accepted that there are real problems with the fact that vehicles that come over to the UK pay absolutely nothing towards the costs they incur.  There was a false start with the Lorry Road User Charge, which was dropped but not replaced with any alternative plan, and now on some inter-regional routes as much as 40% of freight is carried by foreign companies.

And there is the issue of ‘phoenix’ companies: firms that rise from the ashes of a failed business, having written off very substantial sums of debt – often including deferred payments of VAT, PAYE and National Insurance.  There are some cases when the failure is outside the control of the directors – for example where a major customer fails, but that is not always the case.  In most cases, the directors’ actions are not illegal, but their behaviour has a negative impact on those firms that do not fail.  Effectively, they have often been running at a loss for some time, so the rates that they were charging must have been insufficient to maintain the firm, despite that fact that directors might have had a real hope that they would ‘trade through’ their difficulties.

The current situation is as bad as anyone can remember, with too many trucks chasing too little traffic in many areas of activity.  As a result, some hauliers are tempted to accept rates that are below cost, and it is easy to understand operators who accept a low rate for jobs that allow them to re-position vehicles that are needed for loads that offer a decent rate.  The real fear is that more and more operators are faced with the situation that rates for most of their work are below cost, and, when that happens, some turn to cutting corners by such means as magnets that interfere with tachographs or ‘phantom’ drivers who do not exist.

Unfair competition comes in many forms.  We need Government action to deal with foreign firms and the ease with which phoenix companies can write off debt.  We need VOSA to identify and prosecute those who cut corners, and we need Traffic Commissioners to protect the interests of reputable operators.

Geoff Dunning is Chief Executive of the Road Haulage Association.  For further information, visit: www.rha.uk.net

Published: 06/08/2010