www.truckandtrack.com Winter 2024/25 Truck and Track 33 CONTAINER HAULAGE company contributes to a higher level of competition in the industry. However, the root cause of low rates is the imbalance between supply and demand, determined by the industry cycle. This cycle generally runs for about three years, however macro-environmental factors can extend or shorten the cycle. At the beginning of the cycle, rates start to increase as not enough capacity is available to satisfy demand, as what happened during the COVID pandemic. Higher rates attract more companies and capacity to enter the market. However, the market eventually reaches a situation where supply outstrips demand, causing rates to fall. This downward trend in rates continues until capacity starts exiting the market, as more haulage companies sell vehicles or become insolvent. Eventually, demand will recover and start to outstrip capacity, pushing market rates up and the cycle starts again. To sum it up, what goes down, will go back up. Where are we in the industry cycle now? According to the Office for National Statistics, data for the year 2023 shows a steep decline in the number of road freight companies, as well as HGV drivers, in comparison to 2022. This data suggests that we are either approaching the bottom or have already reached it. In addition to this, the budget released by the government will impose further costs on businesses, making it much more difficult for haulage companies to sustain any further decrease in rates. On a positive note, The Office for Budget Responsibility forecasted the UK’s economy to grow by 1.1% in 2024 and 1.8% in both 2025 and 2026. This indicates that demand should start increasing, which should stabilise rates in the short term, with a potential recovery of industry rates in the following year or two. How can haulage companies manage the down-cycle? Haulage companies need to have a long-term plan that caters for both the good and the bad times. Paradoxically, to endure these industry down-cycles, haulage companies need to gain economies of scale. By serving more volume, haulage companies can identify more optimisation opportunities to maximise their fleet utilisation and profit margin. More volume justifies the investment into centralised IT systems to improve schedules and routes, to enhance fleet utilisation. Improve efficiency and customer service There is an abundance of off-the-shelf software that can help haulage companies operate more efficiently. Improving operational efficiency can be gained from the adoption of Transport Management Systems and route optimisation software. However, these solutions focus primarily on operations. What tools can help win new customers and improve your customer service? That’s where BoxHaul comes in. The platform handles the whole process of transacting with new customers, from building trust, rate negotiation, booking management, payments and even financing solutions. BoxHaul’s aim is to remove the friction between shippers and haulage companies when transacting with each other. That’s also part of the reason why the platform expanded their offering, to cater for both container haulage and general haulage. Hauliers will be able to get their own private end-to-end booking platform A new feature that is in development is to take this concept further and enable haulage companies to utilise the BoxHaul platform for their private use, directly with their customers. Haulage companies will be able to give a great first impression to new and existing customers with their own custom branded log-in page. The commercial team can receive quote requests and respond to them in a standardised format, or automatically by uploading their tariff rates. The customer service team can avoid multiple email threads
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