Costs expert warns over haulage rates

Some haulage contractors should be charging over four times the rate they are currently being paid, a prominent costs expert has warned.

Brian Fish, MD of logistics and transport consultancy DFF International – who compiles the RHA’s annual cost tables and previously ran family haulage firm Joseph Fish & Sons – has approached MT.co.uk with calculations showing rates per mile that vary, subject to route, from £2.13 to £4.47.

Looking at three different daily routes of 100, 200 and 280 miles and a two-day route of 600 miles, with a typical daily standing cost of £340 and a distance-related cost (based on bulk fuel price of just over 114ppl) of 85.1p/mile, Fish’s calculations, which assume a 240 day working year, suggest that with a 5% margin factored in, an operator would need for each of the sample routes to generate daily rates of £447, £537, £608 and £1,280. This equates to rates per mile of £4.47, £2.69, £2.17 and £2.13 respectively.

Such rates are way in excess of the £1.10p/mile some hauliers have reported being offered for backloads.

Fish, who trained as a chartered accountant and has worked with many vehicle operators to help them evaluate their costs, told MT.co.uk he thinks “only about 10%” of haulage contractors really understand their true operating costs. Many fail to monitor the number of days a year their vehicles are working, he said, which changes weekly and affects the proportion of annual standing costs attributable to each trip, while others fail to take proper account of their total overheads, he said.

“Most hauliers have systems which accurately measure their distance-related costs like fuel, tyres and maintenance – but do not grasp the utilisation factor or their total overheads,” warned Fish.