Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Further supplementary memorandum submitted by The Road Haulage Association Ltd


  I have pleasure in replying to your facsimile on follow up questions subsequent to my oral evidence to the Trade and Industry Select Committee's inquiry on road haulage costs.

  Q145  A particular example can be seen between Palletline Plc, a nation-wide hub and spoke distribution system for palletised cargo with its central facility in Birmingham, and one of their customers Parcelforce, a business of the Post Office. Although Palletline have a clause in their contract allowing them to approach their customer for an agreed formula of rates, increased on an annual basis, Parcelforce were not prepared to entertain paying increases in full. The last increase requested was for 6 per cent (to cover mostly fuel price rises) but Parcelforce were only prepared to offer 3 per cent. Reluctantly Palletline had to accept this, but noted that in so doing their margins were severely eroded.

  Q148  The evidence we have is necessarily based on information our regional offices receive. Our Bristol office for instance reports that in July and August of this year, the Help Desk reported a steady increase in redundancy enquiries, which have now levelled off but continue at a rate of 2-3 per week. Most of these enquiries are in the lines of "I am either thinking about or might have to make some redundancies in the near future—what do I need to start doing in preparation?" H Hancox (Haulage) Ltd and Hampson Haulage Ltd are two operators who have had to make redundancies in the recent past. Both their fleets have had to be cut back drastically.

  Q172  Instances of return loads are rife. One specific example is a large brick company that put some West Midlands to Belgium work out to tender. Barry Proctor Services Ltd needed £650 per journey to make it pay. A Dutch company (Smeets) got the work for £275. Another foreign haulier's bid was £412. All these prices include ferry costs.

  Apparently, the ratio of inward work to outward work is roughly 3:1. Thus, the inward work commands much higher prices than the outward (return) work. Therefore, UK hauliers have great problems in getting the outward (primary) work.

  Q174  Mr Clive Hampson reports that foreign operators are now doing a lot of his UK internal distribution work. We understand that multi-national companies for example are asking for foreign tenders for internal work, but actual names are difficult to identify because of issues of confidentiality.

30 November 2000

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