Operators must start factoring in the costs associated with the increasing volume of tail lift deliveries to avoid a race to the bottom on price, a leading haulier warned this week.
David McCutcheon, MD of Pall-Ex member Bullet Express, estimates the additional cost of tail lift deliveries, which have grown exponentially with the rise of e-commerce, is not being fairly reflected in the prices clients pay hauliers.
He said: “My company does 75 to 100 tail lift deliveries every day. When I started 27 years ago the charge for a tail lift delivery was £10, moving to £15 about 15 years ago. We have now got ourselves into a position where we get nothing from anyone [for the service].
McCutcheon said tail lift deliveries add to fuel and maintenance costs and add around 15-20 minutes to each delivery, estimating that 100 deliveries over a year could cost a firm over £375,000 annually.
He added: “Multiply that by, say, over 500 members in the pallet networks alone, and you’re getting towards £190m that we are subsidising the customers. Is it any wonder margins are tight?”
RHA policy director Duncan Buchanan acknowledged the rise in tail lift deliveries but added: “Clearly anyone providing this service must factor in the additional cost by creating a charging method that suits the customer and the haulier. Hauliers must seek to ensure they charge in a way that recovers the cost appropriately.”
However McCutcheon said competition meant many firms were not adequately reflecting the cost of rising volumes of tail lift deliveries.
“There must be a way of preventing this race to the bottom because if we don’t the whole industry will pay. Our industry already has enough problems such as driver shortages, rising wages, the cost of vehicles and the cost of pension schemes so we do not need to be subsidising other industries. It is about efficiency. The airlines have done it in the past 10 years (by itemising costs) and we should do the same.”
