Haulier admits cutting • prices to fight competition
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CM COVER STORY
By Joanna Bourke
DESPITE PREDICTING lower profits and turnover this year, Manchester-based haulier AK Worthington has admitted cutting its prices to fight off competitors.
Earlier this month the International Road Transport Union (IRU) warned operators to turn down work which is not profitable ('IRU warns operators only to take on profitable work,' CM 5 March) but AK Worthington managing director Julian Richards insists providing an attractive price for customers has helped the firm keep a constant flow of business. -We won't shy away from tough decisions; we've already lowered our costs and there could also be redundancies in the future," says group finance director Mike Lyons.
The Freight Transport Association has warned operators they need to be aware that customers might expect lower rates to remain even when the economy picks up.
Lyons retorts that the rates cut will enable the firm to emerge from the recession with a strong customer base he believes some of its competitors could collapse.
The company has been working to share loads and cut miles with local haulage companies under an umbrella organisation called Partnerlink, which works like a pallet network but without a hub. This, Lyons says, allows them to keep a strong balance sheet and therefore lower customer costs AK Worthington is also a member of pallet network Palletforce, which lowered its tariffs for customers in January.
Lyons reports that as a result 15 new accounts have been signed and there are two more in the pipeline.