Transport and logistics
We see the current issues affecting smaller haulage companies as being:
- a lack of sophisticated business processes as small, ‘mum and dad’ businesses expand
- a lack of contractual understanding (that is, limited power to negotiate terms and conditions with customers)
- customers’ increasing price sensitivity (due to the growing purchasing power of major retailers) while fuel and wage costs rise year after year
- limited industry benchmarking to compare and measure performance
- weaknesses in key sectors adversely affecting demand (such as retail and manufacturing)
- driver shortages and tactical or ineffective retention strategies.
In addition, other emerging macroeconomic issues include:
- increasing safety and compliance standards
- implications of Euro V and VI (emission standards)
- further consolidation across the industry
- the impact of government policy on investment in road versus rail transport
- inadequate management information systems.
Questions that should be asked
Given the above issues and the continued strong demand for transport and logistics services, the key focus for small- to medium-sized businesses is how they can grow sustainably and service their debt while managing increasing cost pressures.
Small road haulage companies should ask themselves:
- Do I really understand my business? How profitable is it? Which clients are contributing the most to my profitability?
- Do I understand the complexities and ramifications of my current supplier contracts?
- What do my business processes look like and do they need to be revised?
- How can I mitigate the risks of fuel price changes, subcontractor costs, driver shortages and retention, repairs and maintenance, and empty running?
- How can I streamline my business and what KPIs should I be considering?
- Have I considered succession planning?
To assist these operators in addressing the above issues and questions, our dedicated transport and logistics specialists can provide an extensive range of industry expertise, including:
- restructuring – acquisition or divestment of business units (or material assets), sale of business and managed wind-downs
- business review experience, including experience with prominent logistics businesses offering ‘end to end’ solutions
- monitoring, including budget and forecast reviews, identifying meaningful KPIs and assessing performance improvement plans
- sustainable debt assessments
- business valuations.