Lessons Haulage Companies Can Learn from Australia
The downward spiral of Heavy Haulage Australia (HHA) has left a few important lessons for UK haulage companies to remember when taking risks.
Haulage companies that tend to specialise in one particular type of heavy cargo stand to learn a lot from the fall of Heavy Haulage Australia – the star company of Foxnet’s Megatruckers series.
So what exactly are those lessons? Here are some of the most important ones to consider.
Create Options For Diversification
HHA is a company that focused exclusively on the oil and mining industry; while this business model worked out for around 16 years, it ultimately cost them their business when they got stuck in a corner. While it was their ill-timed investment that ultimately sunk their business, HHA serves as a prime example for what happens when you have no other means to branch out when your chosen niche is no longer as lucrative as it used to be. A gigantic fleet of vehicles will be of no use to haulage companies if they can’t find cargo to haul.
It is for this reason that hauliers need to constantly be looking at other options. Companies can choose to specialise in any niche they choose, but it is always a smart idea to have a backup plan in case their chosen niche sees a downturn.
An online haulage exchange is an excellent tool for diversification. It not only introduces haulage companies to new clients, but it also gives these companies a clearer picture of niches that they can fill when their regular clients aren’t calling as often as they used to.
The Industry Has Niches
Just because one company in the hauling business goes down doesn’t mean the haulage industry as a whole is going to go down as well. It is vital to remember that while HHA stumbled and eventually found itself losing a lot more money than it was making, other hauliers in Australia were still doing well in their particular sectors. Local hauliers reported that their companies were not in direct competition with HHA, as they hauled cargo for various local businesses instead of elbowing against HHA for oil, gas, ore and other cargo connected to the mining industry.
So what lesson can UK hauliers learn from this? Simple: learn as much about the circumstances of how a company rises and falls before making conclusions about the industry as a whole. You may discover a lucrative niche that has been flying under the radar, or you may discover that a niche you were eyeing is cooling to the point where expenses outstrip profits.
Keep An Eye On Market Conditions
Speaking of niches, it is imperative that haulage companies seek good sources for news related to the industry and the cargo they haul – and to make sure that their sources are indeed reliable before making a huge commitment.
One of HHA’s biggest mistakes was to invest $55 million in lorries and trailers to service gas, oil and mining companies at a time when gas, oil and mining companies were seeing a cool-down in business. The result: only a handful of their vehicles were in operation.
Risk is part of any business - that much is always true. In HHA’s case, however, it is clear that they encountered trouble because they believed the mining industry would turn around – and it didn’t. They acted on bad information, which serves to illustrate a valuable lesson for companies considering making a large financial commitment.
Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHOR
Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry in the UK and Europe. It provides services for matching haulage companies with jobs in road transport and haulage work in the domestic and international markets. Over 4,000 transport exchange businesses are networked together through their website, trading jobs and capacity in a safe 'wholesale' environment.