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Inter-haul Rate Review, Exceptional Circumstances. 1st September 2021

Introduction

Inter-haul was established to be the best transport provider in terms of process, quality, and service. This ethos has been the key to building our business and it is our goal to be recognised and respected as the provider of the highest service quality and added value.

Post-Brexit and as a result of the ongoing pandemic and lockdowns, the whole country has experienced high levels of uncertainty and the transport sector has had to deal with much turbulence – from a significant downturn in business April 2020 to huge volumes over Easter 2021 that pushed our own operational network to the limit.

Throughout the UK, the chronic shortage of drivers continues to cause significant operational and financial issues across all supply chains and sadly there is no resolution in sight.

The whole of the UK Transport Sector work with the same constraints, and we have seen our competitors switch off deliveries to certain areas and introduce emergency rates to others.

The struggle to recruit and retain Professional LGV Drivers has driven increasingly higher rates of driver remuneration as transport operators strive to keep drivers in cabs, vehicles running and consignments delivered. Throughout the UK Transport Sector, the competitive landscape in terms of pricing is more fluid and dynamic than it has ever been and is likely to remain so in the medium term.

Our transport rate review has been conducted against this backdrop. The review also takes into account the financial challenges of the increased cost of purchasing Commercial Vehicles and the increased lead times in their supply. This review also addresses some of the strategic influences, recognising that each regional area has its own challenges and unique idiosyncrasies.

We have therefore reviewed our operational costs with regard to zones, individual postcodes, pallet sizes and services. The whole of the UK Transport Sector continues to suffer from increased cost and our rate review has needed to reflect this in order to continue to fulfil the transport and delivery requirements of our customers.

Given the turbulence in the UK Transport Sector as outlined above, over the coming months we will continue to closely monitor all of the influences mentioned above, in order that we can continue to provide our customers with high quality service performance at competitive rates. 2

Covid-19

Like many industries and sectors Covid-19 and the associated lockdowns had a significant impact on our operations.

To keep everyone safe and our operations working effectively, we took several precautions at our depots including pedestrian one-way systems, facemasks, handwashing, deep cleansing of cabs, to name but a few. We have stopped using customers own paperwork and our drivers no longer hand their PDA’s to customer staff for signature. All of this is designed to prevent transmission of Covid-19 between humans. Thank you to you and your staff for understanding and respecting our processes.

We made it possible for as many members of our team as possible to work from home. Where essential for staff to attend our depots, the layout of our offices was reconfigured to maintain distancing and Perspex barriers were installed. As well as providing our staff with confidence that they can safely come to work, the measures that we took prevented us from experiencing Covid-19 issues that could have left us operationally vulnerable.

The health and safety of our teams and visitors to our sites are of utmost importance to us so we are constantly reviewing our Covid Safe processes.

Despite this new way of working, we continued to deliver high performance transport services to our customers.

Driver Shortage

The challenges caused by the LGV Driver shortage are likely to be with us for some time. There is an aging driver population which demonstrates that young people are not entering our industry. Covid-19, IR35, Brexit and the decline in the value of the British Pound against the Euro, have catapulted this issue to be an immediate concern with a current shortage of 80,000 LGV Drivers.

We have been unable to promote our own staff through the Inter-haul Driver Training Programme, as Covid-19 meant that LGV Driving Tests were not carried out for 18 months.

We have always acknowledged the essential role carried out by our LGV Drivers and continue to recognise their professionalism. We continue to address the driver shortage issues by making our business an attractive proposition for LGV Drivers.

Fuel Levy

With Covid-19 causing a downturn in global economic activity, the demand for fuel decreased causing an overall reduction in the price of fuel. We were very pleased to have been able to pass this saving on to our customers by decreasing our fuel levy. As global economies have become used to working under the constraints of Covid-19, economic activity has increased and since the beginning of 2021, fuel price has in turn increased by 10 pence per litre. Despite this, we are maintaining our fuel levy at its current rate of 4.24% and we continue to monitor fuel prices. 3

RHA & HSE Tail-Lift Guidance

This guidance, published on 13th May 2021 aims to help transport operators reduce the risk of death and serious injury when palletised goods are delivered by vehicles fitted with tail lifts.

Our approach to this extremely serious subject is that no-one should be harmed at work, or come to harm through our business activities.

Our drivers are now carrying out dynamic risk assessments at locations requiring a tail lift delivery or collection. These risk assessments will verify that the tail-lift can be used safely. Tail lift deliveries and collections (including the risk assessment) are now chargeable and will only go ahead under safe circumstances.

Please ensure that you only request a tail-lift, where a tail-lift is needed. You can order a tail-lift delivery by using the LF (Lift Facility) Code on our job entry system. If you don’t require a tail-lift delivery, then please ensure that the LF field is unchecked.

Residential (Home) Deliveries

Our vehicle productivity analysis has identified that residential deliveries significantly reduce the productivity achieved by our vehicles. Several factors influence this, including location and access to residential properties. In order to ensure that business customers are not impacted by the cost of lower productivity with residential deliveries, we have introduced a home delivery (HD) charge. This ensures that the overall rate structure we offer is competitive for all of the services we offer.

Moving Forward

These are difficult times for the UK Transport Sector. Without drivers, vehicles don’t run and customer orders don’t get delivered. To recruit and retain drivers means increased wage costs leading to increased transport prices. Customers may choose to try competitor carriers, but if they do not increase driver wages they will not have the drivers to service the deliveries. The driver shortage has brought the age old adage of cost versus service performance to the fore.

The positive news is that LGV Driver Tests have now recommenced. We have experienced difficulties in booking driver tests for our trainees, but we are hopeful that more tests will become available quickly. In addition to the LGV Test itself, drivers are required to hold a Driver CPC (Certificate of Professional Competence) which is a valuable training and recognition tool.

Inter-haul are also accredited to the prestigious Fleet Operator Recognition Scheme (FORS) for our transport services.

It is certain that the UK Driver Shortage is a significant issue which is not likely to resolve quickly. As you can see, we continue to do our utmost to manage the situation and fulfil the delivery requirements of our customers. It is true that challenges have arisen, however our on-time delivery performance continues to be at an extremely high level.