In an industry facing increased fuel costs and competition, it’s all about maximising the return loads to stay in business and profitable.
Hauliers have been hit heavily in recent months by both the general recession and the highest fuel prices in history. Despite all the doom and gloom in the industry, one sector has managed to remain buoyant by adapting the business model to maximise on return loads.
Smaller transport companies have stood up well in the face of recent adversity by actively seeking to reduce the number of miles their lorries return with no load or only half full. The key to this business model is consolidation. By accepting part loads of just four pallets, as opposed to larger firms who work to a seven pallet threshold, successful businesses are putting these smaller consignments together to make up complete loads.
This method of turning a profit is based on unit price. The price per unit for a full 26 pallet load is much less than the cost per unit for lower numbers of pallet loads. As MD of I J McGIll transport, Ian McGill explains: “As long as the truck making multiple deliveries keeps to a fairly straight route with a limit of three or four drops before the final destination, we find it is cost effective.”
To double up on earning potential, truckers are also marketing themselves more strongly to attract return loads. Securing a collection for the return trip makes absolute business sense and transport companies are increasingly savvy about how to clinch those loads. Many use online backload and return load services websites such as deliveryquotecompare.com. By registering on these transport marketplace websites, companies can keep their rigs rolling by quoting on backload and part load jobs.
Daniel Parry, CEO of Delivery Quote Compare comments: “Transport companies registering on our site will be matched with jobs posted by website users. They can then check routes and schedules to find suitable return loads openings. If they have spare capacity to match the requirement of the client, the supplier can put forward a competitive quote.”
Even with these measures in place, times are tough for the sector and many in the transport and delivery sector have had to rationalise in terms of vehicles and even staff. But at the same time, by embracing the idea of consolidation and return loads, a smaller fleet can actually be more profitable.