From the Frontline: Volvo Trucks UK MD Robert Grozdanovski
Volvo Trucks is operating “nearly as normal” according to Volvo Trucks UK MD Robert Grozdanovski.
“Every single workshop is up and running, we have some people in self isolation, but we are operating more or less as normal,” Grozdanovski explained.
“We operate with special measures in reception and we are minimising travel. Still some managers might have to travel between depots, but we realise that Skype is actually a great tool. I’ve actually been joking with colleagues that this will teach us some new habits, but it’s hard to build a relationship over Skype.”
Despite business continuing as normal within the company, Grozdanovski said that customers do have concerns for their businesses.
“Until last Friday we’ve had a really good situation with strong order intake, a lot of new orders and new products the customers are interested in. This week we have cancellations as many customers are worried on a short-term basis for their orders and have cancelled ones that were placed a couple of weeks ago, before they get into production. Some have been cancellation some just postponements. Many of our customers have general concerns for their business but it is construction and container transport, who are the guys that suddenly feel that their trucks are standing still. As a precaution, they are cancelling and postponing. It’s not a drama, we have a solid order book, but we’ve not seen this before. But it has been rapid,” Grozdanovski continued.
Not all businesses, however, are cutting back and Volvo has seen an increase in demand for its used trucks. With some hauliers needing instant access to vehicles, there has been an increase in demand, particularly amongst fresh produce hauliers.
“We are selling used trucks,” said Grozdanovski. “There are parts of the country that are very very busy, and food distribution that’s extremely busy. We’ve seen customers urgently needing trucks and that drives the used trucks business. It’s very much tractors that we’ve seen being sold this last week and we’ve been talking at changing our contract hire solutions. Maybe changing to send out trucks for just six or nine months. As we speak we are preparing a financing solution to simply enable customers to rent/contract hire something on a shorter term. We see that being the used vehicles, as they available right now.”
Having recently relaunched its truck range with big changes to the FM and FMX and mild external changes to the FH and FH16, Volvos preparing to promote the new models, however, Grozdanovski says the focus has shifted.
“I think in this situation the normal sales arguments of fuel economy and safety levels are not important, it gets down to other things right now, and that’s normal, because everyone has another focus. It’s not strange that the fuel consumption is not something they would look for right now. We are all humans.”
If the selling of trucks has changed, one thing that remains the same is the workshops. Servicing and maintenance are apparently continuing unaffected.
“What has happened on the continent, locking down the countries, is causing this chaos [panic buying] but many businesses are dependent on us to keep them moving. Our parts still go on with no major disturbance – I know there was one issue with the Euro Tunnel but now it’s working again – but so far, so good. There has been no major distraction, we keep our warehouse in Rugby up and running. Of course, we have some concern now that the schools are closed, but we are part of the distribution chain, so we will continue.”
Continuing as normal in the face of the COVID-19 epidemic has posed a few problems for Volvo, but uncertainty over testing has caused problems.
“Many inspectors didn’t show up since people have had to work to home. Now it seems that the authorities are allowing the vehicles to be used, but we need clarity on this as it’s still not 100% clear. We’ve interpreted it this way. As have others. I’ve been living on the continent in many countries and everywhere I’ve been testing is once per year. We could maybe keep a higher frequency, but authorise us, in the workshops, to do those inspections. We lose so much efficiency with planning the testers. It would make sense if the authorities tested us and audit us – at whatever frequency they want. Let us do it. We spend so much time planning and then losing slots, that is really what I think would be great.”
Pallet networks call for fuel duty derogation
The Association of Pallet Networks (APN) is calling on government to suspend fuel duty for the logistics industry to protect hauliers from the impact of the COVID-19 pandemic and secure the supply chain.
The APN, which represents the UK’s eight pallet networks, is also calling on the RHA and FTA to join forces with it to lobby the Treasury for the derogation.
Explained APN chairman Paul Sanders: “The majority of UK haulage operations are small or SME businesses.
“Their business model is very vulnerable to cash flow issues and their fuel bills usually account for between 30% and 40% of operating costs.
“A derogation on fuel duty could make a huge difference to business continuity and in minimising the number of losses from our sector.”
Pointing to the critical role hauliers are playing to ensure supplies continue during the COVID-19 crisis, Sanders added: “Like most businesses, haulage firms are currently suffering substantial disruption, unpredictable order patterns and diminishing demand from many customers – yet these operations must continue to ensure the supply of essential goods and to support critical services.
“The UK logistics industry is in the spotlight right now, providing one of the most important jobs next to healthcare.
"It is imperative we do all we can to ensure business continuity and the protection of vital jobs and distribution services.”