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| Haulage firms blaze a trail |
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| Written by Vascoingles | |
| Monday, 01 December 2008 | |
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Road - Fuel costs, tolls and height restrictions have forced hauliers to look for new markets Irish hauliers that specialised in construction have either diversified or hung up their keys. Some own-account operators are known to have handed their vehicles back to the finance companies. "There is a significant downturn in business, " emphasises Jimmy Quinn, head of the Irish Road Haulage Association. "Construction transport was enormous and the downturn is felt deeply. But it is not just affecting construction. Other companies are laying off staff, and that trickles down to transport. "Our membership is down by 60 and we’re trying to find out if these companies have gone bust." Things are so bad that issues that kept road operators awake at night just six months ago are not on the radar. The only thing that matters is the economy and fuel prices. And, says Quinn, the falling price of oil per barrel is not helping. "Because the reduction hasn’t filtered through to the pumps, our members are paying the same - but their customers read the headlines and expect a rate cut." In reality, other issues also matter. "Tolling is a huge cost, " points out Owen Cooke, chairman of The Pallet Network Ireland (TPN). "And it’s going up automatically by 21% because the state is taking over management and collection and Vat will be included in the price, which means hauliers won’t be able to claim it back. "There are also new tolls, such as the Cork by-pass. Ireland now has five toll roads." Height restrictions are also causing problems. "Since November, it has been illegal to run a new trailer that is more than 4.65 metres high, " Cooke explains. "Within five years, all bigger units will have to be taken out of service. "We use double-decker trailers that are 4.95 metres high - a height accepted across Europe and on the ferries. The only reason the low height has been introduced is that the Dublin Port Tunnel was built too low. "The whole thing is crazy, as the need for smaller vehicles will lead to an increase in the number of lorries on the road, which is bad for the environment." TPN is one of the few major success stories in Irish transport, notching up a 22% increase in traffic this year. The company has recently welcomed its 22nd member, Pat Moore Transport, and now handles 1,400 pallets per night. "Everyone needs to rationalise their freight now, " comments Seamus McGowan, MD at TPN. "Forwarders that have their own warehouse and distribution operation can save money by giving us their freight. "For example, Flanagan Freight has used TPN for its ’difficult’ areas, such as the west of Ireland, but is now giving all its Irish distribution to us. The cargo comes in from Europe direct to our hub in Blanchardstown, Dublin, where we strip containers, deliver the cargo, and provide full track and trace and POD, as well as management reports." TPN, which already has arrangements with TPN UK for distribution to and from mainland Britain, is now looking for partners in Poland and the Czech Republic. Forward Direct has a road service to both those countries, although Germany and the Benelux are its biggest markets. Most of its traffic is import cargo, bringing in 40 or 50 vehicles a month, compared with just four or five export loads. "It has been a difficult year, " admits Bob Rainsford, a director of the company. "But we find where we’ve lost business, customers have come back because of our European coverage and quality of service. We have had to drop rates, though - as much as €300 from Germany. Big transport companies are cutting rates by up to 30%, making it difficult for us to compete and stay in profit." Forward has recently expanded into container shipping, launching a weekend service from Holland into Dublin. "This would not be suitable for week-day business because it takes too long, " Rainsford says. "But we can ship Friday and deliver Monday morning, which is fine." Forward also runs container services from Germany for retailers Aldi and Lidl. Other European road operators are also feeling the pinch. Uwe Kuhn, MD of Rosslare-based Baku Global Logistics, says import rates are down 10-15% and loads are in short supply, although export business is stable. "A year ago, you could send a truck to the continent and have a return load lined up, " says Kuhn, which launched Baku in 2000. "Now you’re still seeking return loads while the vehicle is on the road." "Everything is under pressure, " Kuhn adds, "not just because of the economic situation, but because shortsea container services have improved so much. But a lot of smaller hauliers have only themselves to blame if they’re in trouble; many smaller operators have no business sense and no idea of costs or budgets." Aramex is expanding its road services by creating new products. "Our new 3,500sq metre warehouse opened in July, giving us 11,000sq metres in all, " explains Cathal Sheridan, group sales and marketing director. "There is an oversupply of warehousing, but it made sense for us to build storage on our existing site. More people are outsourcing, often using the web for tenders. Things like vendor management are growing, too. As storage rates come under pressure, we have to offer more services. "We’ve started a home delivery courier service, copying Aramex’s UK delivery business. Next we’re looking at developing products for vertical markets." Road haulage is even attracting air freight companies. ITC, the trucking arm of air freight GSA IAM, began by carrying air cargo by road to Heathrow and Manchester. Now it is extending the service to non-air freight shipments, including large, heavy and outsize loads and temperature controlled goods. "We are working for forwarders, " explains Ian McCool, MD, "but want to fill our trucks. We link Dublin, Corn, Shannon and Belfast to Heathrow and Manchester. Ideally, we want to work within two to three kilometres of those cities, but we could deliver elsewhere." ITC has also undertaken local delivery work in Dublin, something it may expand. "We want to reposition ITC as a general haulier, not just a company moving air freight, " McCool emphasises. None of these companies even think of using rail freight - not surprising, since apart from one service from Waterford to County May, there isn’t any. Although John McIlvenny, MD at the port of Waterford, believes rail freight is ripe for resurrection, others point out that Irish Rail is not interested. "We are, " says a spokesman, "but only if it’s profitable. No service from Cork, for example, would be profitable." Deregulation might help. According to the European Rail Freight Association, Ireland’s derogation freeing it from EC competition rules should be rescinded. "Irish Rail said it didn’t need to separate infrastructure and operations, provide independent allocation of train paths etc. because no railway from outside Ireland has applied to operate competing services and no railway in Ireland has applied to operate in another member state, " says Tony Berkeley, a board member at Erfa. "But another operator would need traction and wagons to handle Ireland’s different gauge - and the only company with the right equipment is Irish Rail, which would no doubt say there are no spare locos, wagons or terminals." Berkeley claims Erfa has received a number of enquiries for companies wishing to operate rail freight in Ireland. As a result, it has written to the EC opposing any extension of the derogation, which runs out next March. Perhaps freight will once again clatter up and down Ireland’s rail tracks. Source IFW |
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