NRC’s David Aitken Shares Advice for Transport Operators
New Zealanders are back on the road again – or at least some are – but the landscape for businesses has changed. For the transport sector, which is affected by the movement of many other sectors, activity looks to be subdued for a while yet, as the New Zealand and global economy are facing a slow recovery.
David Aitken, Chief Executive of National Road Carriers Association (NRC), has been incredibly busy supporting businesses through this time. He took a moment to talk with Teletrac Navman, where he shared some advice for business owners on getting through the economic headwinds in the transport industry.
HOW HAVE THE LAST COUPLE OF MONTHS BEEN FOR NRC?
NRC has been flat out. We’ve been working on getting as much relevant information out there as we could. Businesses wanted to understand what they could and couldn’t carry, what’s essential freight, getting CoFs renewed and extended. But it’s been good, as that’s what we are here for.
IT IS A TOUGH TIME FOR BUSINESSES. WHAT SHOULD OPERATORS BE FOCUSING ON RIGHT NOW?
We always encourage operators to look at their contracts – are they realistic? Are you making money on them? You need to understand your costs and where the most profitable bits of your business are. In the jobs with less margin, you may need to look at increasing your rates or finding ways to maximise capacity.
Many operators weren’t able to operate at full capacity during level 3 and 4, for example not having backloads on jobs. Now’s a good time to look at how you can maximise efficiencies to get a higher level of capacity for each route.
NRC offers a cost model service, which is free to members. It can help plan your business and see the impact that different options for the same scenario might have on your operating costs. You can find the tool here.
DO YOU HAVE ANY ADVICE FOR TRANSPORT OPERATORS WHO WANT TO NEGOTIATE RATES WITH THEIR CUSTOMERS?
First of all, it’s about the relationship with your customer. Try setting up a face-to-face meeting or over the phone rather than email. It’s easier to dismiss an email. It’s also harder to discuss and explain your reasoning and issues when it’s all done on keyboards. We’re all humans – so face-to-face helps you explain your reasoning and build the relationship.
Secondly, make sure you are dealing with the right person. You may need to ask to bring in more senior people from your customer’s side, who have a better understanding of the costs and the service.
When you are negotiating an increase in rates, it’s really important to have a strong understanding of what the costs are for you to do a customer’s job, so you can explain to the customer what factors are feeding into the rate. Have these costs with you. The customers are businesses too, so they like to have hard numbers to justify their costs as well.
And it’s not just about the cost. Freight is about service; being on time, delivering the goods without damage, and being good to deal with. For example, the fact that you are able to pragmatically work with the customer on solving problems. Highlight your service as well as your understanding of how their business works.
WHAT CAN AN OPERATOR DO RIGHT NOW TO KEEP THE BUSINESS GOING?
I want to encourage operators to reach out to people who can help their business. Speak with experts such as the associations that you’re a part of to get business advice, such as NRC. You should also be in contact with your accountant for financial advice, your bank, lawyer and other professionals who are there to help.
It can be mentally tough right now, so make sure to talk to people around you, talk to family, friends, talk with a counsellor or call one of the many helplines. This is a time to ask for help.
There are a number of free mental health support services. Here are two New Zealand-wide services:
Lifeline – 0800 543 354 (0800 LIFELINE) or free text 4357 (HELP)
Samaritans – 0800 726 666
National Road Carriers Association (NRC) represents 1,800 road transport companies collectively operating 16,000 trucks throughout New Zealand. Teletrac Navman is an Associate Member.