Working Together For Mutual Benefit

When you talk to trucking operators who work in rural areas, they have a completely different attitude to competition than their counterparts in the big city, it’s all about working together for mutual benefit. In the metropolitan areas, in the capital cities, it is simply a matter of dog eat dog. No quarter is given, any competitive advantage is seized upon, flogged to death to try and drive the competition out of business.

In the big cities, the amount of work available is huge. Customers do not have any need to think about about loyalty to a particular trucking company, there are plenty more willing to come in and do the job cheaper, but not necessarily better.

This is also the home ground of the big boys, the national operators with enormous market power. They have deep pockets and if they pursue a particular transport task, they are going to get it, or get into a bidding war with another member of the big end of town.

This market environment has led to an extremely lean and mean trucking industry, which can, on occasion, push the envelope just a bit too far. In this kind of atmosphere, the smartest, but also the ruthless, rise to the top, no-one takes any prisoners.

Out in the rural areas the atmosphere is somewhat different. Out here, the trucking task is infinitely variable. Much of the basic work handled by the trucking operators relates back to the agriculture industry, in one way or another. This is also an area where rates are normally low, especially when you factor in the scarcity of good back loading.

The game is all about peaks and troughs. The weather has a lot to do with the prosperity, or otherwise, of each region. No rain, or rain at the wrong time, can turn the peak season into one where the trucking boss sits and looks out of the window at parked up trucks and trailers.

The best solution rural operators have come up with, so far, is all about working together. If a company geared up with enough equipment to cover all of the work it could get in a boom year, it will be running a lot of severely under-utilised equipment most of the time.

Last year’s harvest in Western Australia is a case in point. Record tonnages saw everyone working flat out and reaping the rewards. Trailer makers were snowed under with orders for new tippers, as a result. Nobody, no matter how big, was trying to get all of the tipper work, however. To do so would be a folly, this year’s rains are unlikely to repeat the good fortune.

Instead, the rural operators have to work out a way to ensure there is enough capacity in any particular area to handle those booms, without anyone getting overstretched and over-equipped. This is where co-operation comes in.

There needs to be a level of trust between competitors to get it to work out, but the mutual gains tend to ensure a certain level of honesty between competitors. When it’s all going off in one area and the transporters can’t cope, they can call in other operators from other areas to help out. They can do so, in the certain knowledge, a similar call will be made in the opposite direction when the tables are turned.

It is in this way the rural trucking industry can survive in these areas. Rates are low, if they weren’t the big boys would be in there. Operators watch farmers going bust every week because they have over capitalised. They don’t to make the same mistake and this drives them into a hybrid business model, part competition, part co-operative.

Of course, there are sharks everywhere and the system can often fall down when a word and a handshake are taken back. Overall though, it is testament to both a survival instinct and a nicer side to human nature, which makes this system work.

 

Precision and Knowledge Required Test Driving the Next Generation

Author: Tim Giles

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