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The industry needs to re-examine its relationship with its customers if it is to end the rate squeeze, according to Bullet Express MD David McCutcheon.
Responding to news last week that despite growth in the pallet sector, rates remained under acute pressure, McCutcheon said: “As a haulier of more than 22 years, rates have never been better for clients.”
McCutcheon, who is a Pall-Ex member and has a 50-strong fleet of vehicles, said: “While pallet networks remain invaluable to hauliers, they are sometimes guilty of being their own worst enemy in terms of what management are accepting as part of the job.
“The networks need to agree standards so we can say to customers: ‘here are the standards and we’ve got to make a living’,” said McCutcheon, acknowledging there are limits under EU competition law.
“We need to look at what we’re doing and what we’re giving away free,” said McCutcheon.
He suggested the airline industry may hold the key. “They said ‘we can do it at this price but, if you want it, you have to do it our way’. Otherwise, where does this all stop?”
Jim Cowie, MD of Pegasus Express, said customers will naturally look to get the best for their businesses. He said some of the larger players in the wider industry are not blameless and have to be running at cost simply to retain business, which depresses rates further.
“I don’t think the pallet heads can do much [about rates in general]," said Cowie. "So as individual businesses, what we have to do is work hard to find the right customer at the onset. Sell strategically to find someone who is a match with your own business and will pay a fair rate."
Nigel Parkes, MD of Pallet-Track, agreed it was clear hauliers were in general under pressure. His solution to support his members is a central sales team based at the business’s Wolverhampton hub selling on their behalf. "However you do still find people and businesses that don’t understand their operating costs – some of the work they take on simply can’t be economically viable."
