We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Effects of external factors affecting the road haulage industry Essay Sample

The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Effects of external factors affecting the road haulage industry Essay Sample


* Competitiveness of the road haulage industry and pressures on margins

* Impact of economic factors

* Delivery pressures

* Increased customer requirements

* Development assistance for the road haulage sector

* Increasing range of products and requirements demanded

I have been asked by a road haulage company to produce a review which presents a strategic assessment of the road haulage industry regarding the capacity of the industry to meet the changing environment and the adequacy of the existing structure and organisation of the road haulage industry to respond effectively to these changes.

I will also discuss the likely impact of these developments on the market environment in the road haulage industry and the implications this has for the activities that may need to be undertaken to ensure that the industry can meet users’ evolving service requirements competitively and cost-effectively into the future.

The period of the late 1980s and early 1990s was one of change in both the retail and supply industries, with the consumer being a key driver of these changes. Retailers increasingly faced stagnant markets filled with more demanding consumers, all seeking better value for less money – not only of products, but also of services. As more and more products became commodities, a requirement emerged to differentiate through “added-value”. This had considerable impact on retail costs and margins which in turn, required retailers to seek optimisation of both retail prices and space. It was during this period also, that discounters began to gain market share, which retailers expanded their number of private labels and additionally faced having to deal with too many outlets, excess capacity and overall, higher levels of competition attempting to maintain a share of falling consumer expenditure.

These consumer-driven changes also impacted suppliers/manufacturers of consumer goods. As retailers attempted to reduce their cost base, they became more demanding of suppliers. Suppliers not only had to reduce their own cost base and address issues such as excess capacity, but also had to actively seek to differentiate themselves by creating “added-value” for their customer base. A prime source of this value has increasingly been through customer service. The impact on logistics and distribution of this environmental change has been considerable. While there are clearly many aspects to customer service, logistics is a critical component, with services ranging from on-time-in-full delivery, to stock management and after-sales-service. Suppliers which have striven to achieve competitive advantage over the competition are typically those where logistics management is a high priority.

The time factor has also driven developments in logistics / distribution services. Time has become a critical issue in the management of organisations. Product life cycles have become shorter with a requirement for faster lead times. All customers from retailers, manufacturers and suppliers to consumers, require “just-in-time” availability, which has implications of organisational activities if markets are to be obtained and retained. A factor which is therefore now being addressed is that of logistics / distribution lead times. In order to co-ordinate supply with the dynamic requirements of the marketplace, a different approach to the management of lead times is emerging. This suggests that an important feature of the environment facing haulers is ever increasing demand for improved response times and for new services such as tracking.

Companies are increasingly seeking competitive advantage by reducing costs and lead times, and by improving co-ordination of supply chain activities overall.

A consequence of the trend among some major users is to decrease the number of sub-suppliers including transport and distribution services suppliers.

Improvement developments in the logistics / distribution function have manifested themselves in a broad variety of initiatives with the ultimate objective being to reduce lead times, improve supply reliability (and customer service), and reduce costs. With an increasing range of products demanded, many with different logistic profiles, this is leading to smaller shipments and higher frequency of delivery. This has important implications for the road haulage industry and for Government transport plans.

Reliable operation is now a basic or minimum requirement for delivery, with measures such as “on-time-in-full” and “case fill rate” being used to capture the performance levels of the distributor. In more developed environments, both retailers and suppliers are consolidating their own supply base and are working with their key suppliers to jointly implement improvements within the business.

In terms of more complex distribution / logistics services, European and UK industry leaders have implemented initiatives such as continuous replenishment and automated ordering. Continuous replenishment means orders are driven by consumer demand and are replenished in both the retailer’s distribution centre and the retail outlet on a “just-in-time” basis. This requires the distributor to have visibility of the consumer demand patterns – be they actual or forecast – which in turn has substantial implications for the manner in which the distribution service provider operates. This trend is leading to increasing numbers of manufacturers and other suppliers opting for specialist logistic service suppliers. This is particularly evident among manufacturers who are expanding internationally but is also a more widespread development. The analysis of market trends highlights the future need to expand value-added services.

The environment facing haulers could be summarised as one where there will be increasing demand for more services at lower costs. This is discussed below in the analysis of the competitive nature of the market and the pressure on margins. In terms of enhanced services in addition to requirements for supply chain management the two other key trends relate to smaller and more frequent deliveries and greater emphasis on delivery reliability.

Very Competitive Market in Road Haulage and Pressure on Margins

The British road haulage industry is operating in an environment which is characterised by a very competitive market with resultant pressures on margins. This reflects demand side pressures previously discussed in this section as well as supply side factors. Some of the key features which give rise to this position are summarised in figure below.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Peculiarities of various assignment types

The educational process is diverse and full of interesting writing tasks which help students develop their academic abilities. Different assignments types are created by professionals in order to enhance students’ level of analytical, critical and writing skills and to vary the learning process. As a student, you will encounter numerous tasks of diverse complexities throughout your student life. Sometimes, maybe, too complicated! They have different peculiarities, structural...

Making decisions in health and social care

Critically analyses the concepts, features, and importance of costs and accounting in making decisions in health and social care Cost accounting is a method used in accounting to capture a company’s or organisation’s production costs. It assesses the input costs of every step in production, fixed costs like depreciation of capital equipment. Cost accounting measures and records costs individually then compare the input results via...

Сhildren development

Physical development 7-12 years By the age of 7 a child enjoys things such as bike riding and rollerblading they are now able to tie and untie shoelaces without adult help, they are now starting to understand what rules are and are able to follow simple rules. At 8-12 years a child improves the physical skills that they have already developed and start to see...

Forex international trading market

Introduction Forex exchange is on the rise in Namibia; resulting in more people wanting to learn how to trade to try to increase their income so that they can enhance their standard of living. Forex Foreign exchange identifies the process of converting domestic currency into international banknotes at particular exchange rates (Bofah, 2017, para.1). As the number of foreigners in Namibia is increasing, more Namibians...

Aristotelian idea of God

This image produced in 1544 shows emerging's of the Judeo-Christians and Aristotelian's traditions. Aristotle was very interested in the idea of motion and said “The world is in a constant state of motion and change”. An example of how the world is changing is the growth of trees and plants. Aristotle believed in a prime mover, which is the being which creates change in the...

Get Access To The Full Essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?

Get access to our huge knowledge base which is continuously updated

Next Update Will Be About:
14 : 59 : 59
Become a Member