EUROMODAL
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BASED: Totes. FOUNDED: 1996. CONTACT: Jean Louis Tessier, managing director. FLEET: Four Renault 320 tractors; 60 Trailor curtain-sided semi-trailers, and 20 more run by subcontractors. SPECIALITY CONTRACT: General unit load haulage to the UK. TURNOVER (1998 projection): FFr60m (£6.25m).
ONE OF THE MAIN PROBLEMS facing any haulier operating between France and Britain is the imbalance of trade, with significantly less freight moving from England to France than in the other direction. That can be a problem for companies such as Euromodal, of Totes, which regularly has to turn down business from French customers exporting to Britain due to a lack of vehicles. Having made deliveries over here, Euromodars trucks often have to return home empty.
The current strength of sterling doesn't help. "With the pound at FFr9.6 you're exporting less than when it was FFr7.50," says managing director Jean Louis Tessier. "We do get return loads some of the time but prices are very low in that sector. I guess you just have more vehicles than loads in England..."
Euromodal was founded in October 1996 from the remains of another firm, Euroway, which fell into receivership. It operates a road-rail business between France and Italy in addition to more regular haulage activities within France and to and from Britain.
Work in and out of Britain represents a whopping 9095% of Euromodal's business. "We do about 600 trips a month to the UK," says Tessier. Deliveries are mostly to industrialised areas in the North; typical loads include automotive parts, wood products and plastics, although the company will take anything on pallets. Euromodal owns some 60 semi-trailers but only four Renault 320 tractors. It uses 60 subcontracted owner drivers with their own tractors with a further 20 subcontractors who run cilia to provide a maximum 80 tractor/trailer combinations, each of which averages 12,000-13,000km a month.
Like many French hauliers working in Britain, Euromodal started looking at the area from a poor domestic market. "There are big problems in the French haulage industry; many companies have shut their doors in the past three to four years," says Tessier.
These perceived problems include a steady flow of new regulations and rising driver salaries.
In reality, says Tessier, drivers' rates of pay are falling because of the hours they are putting in. "Many companies are reducing their fleets and using drivers on double shifts to get the most out ' of their remaining vehicles," he explains. "Some are even using three drivers per vehicle per day."
This makes the European Working
Time Directive, with its threat of a 35-hour working week, even more of a problem. Tessier's drivers currently work about 200-230 hours a month. If a 35-hour week becomes law, he believes, further strikes by French drivers will be on the cards. "Drivers have already lost a lot of buying power over the past two to three years," he comments, and increases in their hourly rates have not been enough to compensate for this.
Tessier expects Britain to become even more important to his business—and he plans to muscle in on the domestic UK market. "England is a good market for us," he says. "We will do some cabotage there." Even the UK's higher diesel costs don't seem to worry him: he points out that dramatic increases in the cost of diesel are being phased in from the end of this year in France. But he is concerned by UK rates. "Prices mustn't go down any more in England," he says, "otherwise the market may not be of as much interest to us."
Does he expect British hauliers to retaliate by looking for domestic work in France? Not for now, it seems. "At the moment the UK haulier is at least as expensive as the French haulier, because of the strength of sterling," he explains. "But with the pound at FFr7 the UK haulier could do damage to the French market."
Like a lot of French hauliers, Tessier is far more concerned about the Spanish. "The Spanish will definitely take loads away from us," he predicts. "Their costs are already around FFrl less per km."