Cost containment is the key

The economic forecasts for 2003 make dismal reading no matter what way you look at it. The Small Firms Association has predicted job losses of 35,000 amongst its members in the year ahead.

There are equally disturbing forecasts emanating from the employers' body IBEC. Irish Road Haulage Association (IRHA) spokesman Jimmy Quinn agrees that 2003 is going to be a tough year for the road haulage industry. Quinn a successful haulier in his own right explained.

"We will be looking to contain costs across the board and we will be focusing on that area. We will also look at increasing revenues through rate increases," Quinn explained. Like no other year, Quinn's company will be looking to tighten its belt.

"We will be looking at our purchasing. Any where we are spending money, we will be looking to reduce costs. That includes, vehicles, tyres, spares parts - the whole gamut of expenditure." He continued: "We also have to look at getting paid more for what we do. The amount of cost increases we have taken on the chin in the past two years have been horrendous. All hauliers have been similarly affected. We now need to get the rates up." Quinn admits that securing meaningful rate increases in the current climate will be difficult.

However, he countered: "If we can't secure rate increases, we won't be able to work for the customer in the next 12 months, It is as simple as that. If customers want to continue an ongoing relationship with their transport supplier, they will have to take the longer view." The ever present spectre of spiralling insurance premiums is set to have another negative impact on the road haulage industry in 2003. Quinn believes that all hauliers must do all in their power to keep premiums to a minimum.

"We put some in house measures in place last year that helped reduce our claims situation. We will be doing the same in the coming year. We are hoping it will have a positive impact on our premium." In the current economic climate Quinn is ruling out the possibility of expansion this year. "The market has slowed down and hauliers should react accordingly. 2002 was a terrible for the haulage industry and hauliers now need to consolidate what they have," he commented. The IRHA has been battling with Finance Minister Charlie McCreevy in relation to fuel duty for the past year. Quinn said the association is unhappy with the recent three cent rise on excise duty on diesel and will continue to raise the issue at the highest level.

"We need to get the Government to realise that the road haulage industry isn't a cash-cow that can be milked every year in the budget. They don't tax any other raw material in this fashion. Diesel isn't a discretionary spend and is one of our raw materials. We haven't the option of running without fuel," he commented. Previously, the IRHA had campaigned for the introduction of an Essential User Rebate system whereby licensed operators could claw back some of the duty, by virtue of the fact that they are "essential users".

At one time the IRHA even offered to administer the scheme for the Government on behalf of its members. The proposed scheme was buried after the December 2000 budget when Finance Minister Charlie McCreevy reduced excise duty on diesel by six pence per litre. In intervening budgets, most if not all of this reduction has been clawed back by the Department of Finance. So is there now a case for revisiting the Essential User Rebate proposal? "In the current economic climate it is hard to see Minister McCreevy giving anything away. But there is a definite argument for a lower rate of duty for licensed transport operators. Those driving diesel cars can use their discretion and switch to petrol if they wish.

The same option isn't available to the haulier," Quinn commented. The IRHA spokesman believes the Government now needs to recognise the role the road haulage industry plays in the economic life of the country and he feels, measures should be put in place to protect the industry. "It is important to keep the Irish road haulage industry competitive.

The Essential User rebate issue hasn't gone away, and it is an issue we may revisit again, but as I said, given the current economic situation it is hard to see the Government giving anything away." In the recent Budget the Government steered clear of increasing excise duty on petrol. However, Quinn feels that any increase in the cost of transport should have been spread equally amongst all road users, not just diesel users.

"We were told that an increase in petrol would have affected inflation. We feel it would have been better to spread the burden across all road transport users." The issue of road tolling will be brought into sharp focus this year, according to Quinn, and all efforts to introduce road tolls on new bypasses etc will be resisted by the IRHA. "The Government is going to have to make up their mind how roads are going to be funded. The motorist is already paying enough. We will object to tolls as long as we continue to pay road tax," he concluded.