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m o to r tf a n s p o it c o .u k

Takes two to tango in servitisation

hose of you who know Des Evans - the
former boss of MAN and last years winner
of the MT Service to Industry Award - may
wonder what he has been up top since he retired
last year. Now an honorary professor at the Aston
Business School, he has been working closely with
tyre manufacturer Goodyear on a study into the
servitisation in road transport
The initial results of a study involving half a
dozen operators, manufacturers including MAN
and Goodyear and service providers including
Microlise, were presented last week at a round
table in Aston.
Servitisation is essentially the shift by
manufacturers to expand their businesses by
developing advanced services rather than just
making and selling products. Obviously, it takes
two to tango, hence the involvement of leading
3PLs like Wincanton, Fowler Welch, Downton
and Chamberlain Transport - if hauliers dont
want to buy advanced services there is no point
suppliers going through the pain of developing
them.
The problem for truck and tyre makers is that
they are now geared up to make money by selling
more trucks and tyres, but servitisation means a

shift to finding ways to help operators get more

service from less hardware.
Evans was an evangelist for the concept of
operators buying mileage rather than trucks - he
argued that MAN knows far more about how to
get the best from an MAN truck than any
operator, so let us look after the truck while you
look after your customers. Pence per kilometre
tyre contracts have been around for years and a
good example of servitisation - operators pay for a
complete package rather than buying, fitting and
managing their own tyres.
Operators have very different views on what is
their core business. Handing over management
of trucks, tyres, drivers, telematics or any other
key aspect of running a transport business to a
supplier is anathema to many traditional hauliers.
They argue they can do it cheaper and better
themselves - and looking at the profit margins of
these businesses who can argue.
But the world is getting more complicated Euro-6 trucks, more advanced telemetry,
telematics and technology such as remote tyre
pressure monitoring could mean that the days of
operators owning and managing their assets are
numbered.

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GV purchasing needn't be dictated by poor cashflow

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ere seeing a trend in the market

whereby a lot of businesses are taking a
much more cautious and ad-hoc
approach to HGV purchasing, lacking the
confidence needed to plan long-term.
The purchasing market is a little bit stop-start
and it seems that a significant number of hauliers
are waiting to see what the aftermath of the
general election will bring before they make any
major investment decisions.
Its not just economic and political uncertainty
thats delaying purchasing though, arguably the
biggest challenge is still finding the cash to make
plans a reality. As many as one in five transport
firms admit their cashflow wont support their
HGV purchasing plans, resulting in running
older vehicles for longer.
Its not surprising that haulage and freight
companies feel the strain on cashflow more than
most, with issues such as high fuel prices, taxes
and overseas competition all taking a toll, not to
mention legislative burdens.
Indeed our survey, the Close Brothers Business
Barometer, also shows that for 19% of those

M D , tr a n s p o r t
division
C lo s e
B ro th e rs
A s s e t F in a n c e

2 0 M o to rT ra n s p o rt

operating in the transport sector, its the cost of

purchasing and running Euro-6-compliant trucks
that is the prohibiting factor in their HGV
purchasing plans.
I think that by the end of this year purchasing
activity will have increased, but to get to that point,
the market needs to understand that despite the
challenges Ive mentioned, there are ways to fund
fleet upgrades.
The same companies that are struggling with
cashflow often dont think about the equity in
their equipment and thats the place to start when
thinking about raising money. Asset Finance,
which includes sale and HP back, leasing and
refinance, is designed to unlock the value of
existing assets to provide a cash boost
Its a sustainable and flexible option that allows
hauliers to maintain or upgrade their fleet without
increasing cashflow pressures.

West Sussex RH163DH

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