The boss of CM Downton has said customers need to be realistic about haulage rates as the economic recovery begins to lay bare capacity issues within road transport.
"The days of cheap transport are over," said CM Downton MD Andy Downton.
Speaking to Motortransport.co.uk about the family-run firm’s latest financial results for the year ended 30 June 2013, Downton said the company had performed robustly in a challenging environment brought about by the recession forcing down rates.
"Whilst we've renewed all of our existing contracts, clients have strongly resisted price increases and throughout that time we have subsequently had to absorb a lot of cost increases ourselves.
"But the economy is recovering at pace now and as it does, capacity issues are already starting to appear in the market, and prices are starting to harden. I think clients have got to be more philosophical about the way they expect pricing in contracts [are calculated]."
In the twelve months to June 2013, turnover remained steady at £90.5m (2012: £89.1m) at the operator, with pre-tax profit falling 15.5% to £5.3m (2012: £6.3m). This included the effects of a £153,000 bad debt from a customer entering administration.
CM Downton has experienced a period of rapid growth in the past five years, with turnover more than doubling from £42.7m in 2009 to today’s figure.
The company plans to continue to expand, either through organic growth or via acquisition, but "it has to fit with the culture and overall strategy of the business", said Downton.
In October 2013, the operator acquired C&H (Hauliers) when its parent firm Charles Gee Group entered administration. The integration has been going well, added Downton, who expects the increased scale of the business to open doors.
" Where we have a USP is that we are a strong, solid family business but have the scaleability of the 3PLs now, so we can offer something different to the marketplace," he said.
CM Downton is now also sole shareholder of the Jigsaw consortium, which recently renewed its ABI Inbev contract and extended its work with white goods manufactuerer Indesit.
