The way smart cities look and operate is going to depend on how citizens, businesses and public authorities fit together. One of the crucial drivers all these three have in common are banks.
The techno-economic challenges facing cities are huge, with multiple issues linked to the financing of capital investments, the shape of the markets, industrial restructuring, future employment, innovation, and the way major cities relate to the wider world. We see for example how a highly active interconnected urban network of entrepreneurial ecosystems is being forged, San Francisco, Seoul, Paris, Shenzhen and Tel Aviv being leading examples. Will this hamper the development of newer cities, or lead to the decline of cities that are less active on the networking front?
Social issues are also key here. We are likely to see new urban lifestyles, growing inequality and, further down the line, types of society that are very different from those we know today. You only need to compare the lifestyle of a young Silicon Valley engineer with that of a retired person in Vienna to see how digital tools and systems can unite people in terms of the way they do things, but may very well divide them as regards cultural norms and generational codes. And at the end of the day, the climate and wider environmental issues are simply inescapable. We are going to need a complete reworking of our economic models and systems, which are to a very large extent a legacy of the last industrial revolution. For each of these major challenges the banks have a key role to play.
The banking sector: traditional partner to cities
Capital and liquidity flows between socio-economic players underpin human initiatives, financing basic infrastructure and development programmes and thus helping to set up the urban ecosystems we tend to take for granted today. The financial world and its epitome – the bank – are interwoven with all strata of society and all geographical levels: cities, countries, regions and transnational spaces. The banking sector is one of the major counterparts to cities and their component entities, from individual people to companies to the community as a whole. Banks finance, lend, support and also assess; they are closely bound up with progress. They operate at the heart of the urban space and are relationship-enablers in a similar way to the post office, the town hall, the café and the pub.
In parallel, banks are stepping up their digital capabilities in response to increasing demands in western countries for efficiency and convenience, and for greater inclusiveness and access to financing in the emerging countries. Banks are now seeing the constant advent of new means of financing and risk management – including for instance crowdfunding and a trend towards ‘green financing’ – and are working to integrate them into their existing business models. Moreover, they help their customers and partners to follow the same path, bridging the gap between people’s and companies’ new needs and the technology that can provide solutions.
Only one role now for banks in the city?
Banks have a history of being strategic partners to sovereign states, companies, entrepreneurs and private citizens. By definition and by vocation, banks have always played a part in promoting ventures in a variety of fields such as infrastructure development, energy, education and healthcare. However, they now appear to have been straitjacketed into the single, limited role of being a provider of funds. It is striking to see that in cities today banks are usually viewed in their narrow function of financier, or sometimes perhaps a rather irritating or fractious risk manager for people’s individual or collective projects. But their range is wider than that. Now that we are rethinking our urban spaces, we could certainly make more use of the range of skills possessed by banks when it comes to planning, business intelligence, data analysis, and as an enabler of social links in neighbourhoods. Banks need to think about how they can optimise their skills in the urban space, combining their traditional strengths of transparency, pragmatism and rational planning.
Banking + data in the service of the urban space
With its millions of banking records, a financial institution is very much a part of the economic life of a city. A bank would for example be in a position to draw up a set of indicators on local merchants’ offerings – which would be very useful information for consumers – footfall statistics, the housing market, or even job vacancies. As financial intermediaries, banks could also become leading observatories for all kinds of business transactions, reporting on the relationships and ‘balance of power’ between various local players and entities and drawing up detailed maps for residents, elected representatives and companies that have set up in its area. This is in fact a priority field for the global digital giants, especially the Silicon Valley firms. And banks have traditionally enjoyed an enviable strategic advantage in this regard.
… but first and foremost, to serve citizens
Now that digital technology is transforming the way we live, is it perhaps time to talk about the city of the future in terms of a smart, digital space? Beyond the terminological spats, we should now be putting all these technologies and techniques at the service of people, the very point where the worlds of digital technology and information converge. Under this paradigm, banks will be able to supply citizens with high-quality information to the benefit of both individuals and communities.
And quite apart from the valuable guidance – on getting around, consumption patterns, etc. – that data and the algorithms used to process them provide, people living in cities are increasingly keen to live different lives – unplanned, less regulated, in-the-moment lives. Convenience and the experience are key here. And here once again, banks have a role to play.
Banks already enjoy a culture of trust, confidentiality, compliance and experience in handling and processing data in a highly-regulated environment. It will be to everyone’s benefit, bearing in mind the need for responsible conduct and sharing of resources, if banks take a fresh look at their – already major – involvement in the ever-accelerating changes taking place in the urban space.
Source: L’Atelier BNP Paribas
Factoring: A success story
Factoring is on the rise: last year this market reached a total turnover of 61.2 billion euros, resulting in an impressive growth of as much as 10.5%. BNP Paribas Fortis' market share rose slightly from 38.4% to 38.6%.
Ignace De Keyser, Sales & Marketing Director at BNP Paribas Fortis Factor, explains the increasing success of factoring.
How is the Belgian factoring market developing? Do you see any marked trends?
‘The growth figures speak for themselves: factoring is clearly becoming more important. Factoring used to be more of a support mechanism, but today it is a mainstream solution easily competing with banking solutions. This obviously has to do with the liquidity crisis and the successive measures.
Factoring is not entirely comparable with a banking solution, of course. Factoring offers companies more than just flexible financing. The factoring range also includes credit management and hedging, although these services have receded into the background somewhat in recent years. Factoring owes much of its popularity to the financing aspect.
The lingering economic uncertainty, the search for new markets and the realisation that 'too big to fail' is really an illusion are forcing companies to protect their low margins. More and more entrepreneurs are adding this element to their factoring solution.
Credit management outsourcing is also on the rise again. Many larger companies had already professionalised this area, but are now outsourcing all non-core business as much as they can.
BNP Paribas Fortis Factor has always held this service close to its heart. Our customers can therefore rely on a specialised team that guarantees continuous follow-up both here and abroad.’
What are the reasons for this change of attitude?
‘There are two main reasons for it. First and foremost, our services and operating methods have changed radically in the last few years. That is largely due to the development of new communication technology. Some years ago, all communication was still by mail or fax, bills had to be processed and entered in the system manually, and reporting was also done manually. In brief, it was a time-consuming process with more potential for mistakes.
Nowadays the vast majority of our customers transfer all their data electronically, directly from their accounting program. As a result, the entire process – from the customer drawing up bills to receipt of the funds – takes two days at most, depending on the quality of the file sent to us. And there is much less risk of mistakes. Thanks to these innovations, factoring is now much quicker and more straightforward than before, which has also meant a reduction in the cost for our customers.
Secondly, there has been a major change in the target group and the use of factoring. In the past, banks suggested factoring to customers that had become too risky to finance using conventional loans. In other words, it was a last-ditch form of short-term funding that provided the bank with much greater protection in the event of the customer going bankrupt. Consequently, some companies were more or less forced to use factoring and were not overly pleased with it. Add to that the administrative switch and it's easy to see why factoring got a bad reputation. The most oft quoted argument against factoring was fear of what customers would think.
The turnaround came some years ago with the introduction of the new Basel II standards, whereby banks were required to maintain a capital buffer to cover their risky activities. The buffer for factoring was significantly lower than for conventional loans, making factoring a more attractive option for banks. As a result, they started to offer factoring to customers with a good credit rating, who in turn began to see its potential.
On the back of these two changes, an increasing number of companies are using factoring to boost their working capital, and for a longer period. Twenty years ago a customer would be with us for an average of two to three years, but that has since doubled.’
Will Basel III intensify this trend?
‘There can be no two ways about it. Basel III has made banks subject to even stricter capital requirements, which can only make factoring a more attractive option. What is more, the new standards focus much more on liquidity. In this connection, the operational relationship between the bank and the customer plays an important role: if a company entrusts its cash flows to a bank, it can regard the risk of loss of liquidity as low and maintain a lower liquidity buffer. In this respect, too, factoring hits the mark.’
So what makes factoring such an attractive option for companies?
‘A financially sound company can benefit by outsourcing the administration of its accounts receivable to us. While we monitor the receivables, the customer can focus entirely on business. And in the vast majority of cases, we are able to collect amounts due 25% more quickly than the customer. Thanks to our experience – we know all of the most commonly used excuses – and reputation, we can encourage debtors to honour their payment terms. After all, no-one wants a financial partner to think that they are an unreliable payer.
More importantly still, factoring is a more flexible form of funding than conventional bank loans. That is because funding develops in line with turnover: if turnover increases, the company issues more invoices, and funding rises too. Factoring is therefore a very attractive option for developing companies.
The "off-balance-sheet" aspect of factoring is another deciding factor. This not only improves the company’s balance ratios, but also has a positive impact on the cost and availability of the company's other credit facilities.’
Is this typically a product used to cope with a crisis?
‘No, definitely not. Factoring is especially popular when economic conditions are volatile, which means periods of crisis and of growth. In such circumstances, it is essential for companies to be able to convert their receivables to cash quickly. This is less important when the economy is stable or less volatile.
That is why the factoring market expanded so considerably in 2009-10, when the financial and economic crisis was at its worst. Because debtors were taking longer to pay, many companies had to contend with cash-flow problems. Quicker collection of bills can go a long way towards reducing that pressure. That is particularly so if you combine quicker collection with a package that includes cover against the non-payment risk and debtor default.
However, factoring is also an attractive option when the economy is improving. If companies receive more orders and turnover increases, there can be cash-flow problems because their working capital need is higher. So factoring is a highly flexible means of funding the working capital requirement based on increasing receivables.
It is not therefore a product just for times of crisis; it can be beneficial for any company. And the best way to prove the effect of factoring is simply to try it out.’
The challenges facing the Belgian transport sector
In this article, we take a closer look at the transport and logistics sector in our country. How has it been doing over the past few years? What trends are likely to take shape? And what is the future of the Belgian transport industry?
Before we start our analysis, it is important to point out that the Belgian transport sector forms part of a broader European and global transport system. That is both a curse and a blessing. Today, past European decisions are still a major determining factor when it comes to the 'health' of the Belgian transport industry. The free movement of goods and persons, a European priority since the early 90s, not only brought with it opportunities, but also immediately became one of the greatest threats to Western European carriers. And that is just one of the challenges the sector faces.
'To give an example, there's the rise of the internet and mobile telephony, which have digitalised the economy. That had consequences for working methods in transport and logistics, but the advent of e-commerce has also had an impact on demand for transportation. On the other hand, a sort of 'global village' has been created. In a way, distance no longer matters, and the exponential growth of container transport is a direct result of that,' says Jean-Marie Becker.
As CEO of MMM Business Media, he has been following the transport and logistics sector in Belgium and abroad for over 30 years. He is also regarded by the Belgian transport industry as someone with a real understanding of the sector.
Consequences for logistics and transport
The aforementioned trends have certainly not been without consequences. National importers and warehouses have been replaced by EDCs and RDCs – European and regional distribution centres – which service several countries at once.
'Moreover, internationally active companies decided to concentrate their production units in Europe, and preferred to seek new opportunities where higher profits awaited them. Here I'm talking about the BRICS and PECO countries. That of course has resulted in a reorganisation of the logistics landscape,' says Jean-Marie Becker.
The reason behind Belgium's continuing key role in this new economic landscape is its geographical location. In addition, our ports still have a decisive part to play, as shipping companies only allow their ships to stop over in a small number of ports for profit-related reasons. Antwerp and Zeebrugge, but also Rotterdam, do particularly well, and as a result our country has been able to get its hands on a piece of the transport and logistics pie.
'A prime example of this is that Antwerp is actually the largest French port if you look at the amount of traffic heading for France,' Jean-Marie Becker stresses. ‘A country such as Belgium must continue to reap the benefits of its excellent geographical position, which acts as a weapon in the fight against the threats looming over the world of transport.’
Adaptability is crucial
In the changing landscape of the transport sector, hauliers must try and keep their heads above water. But how? By making their strengths a specialisation, or by keeping up with developments in the economy and transforming themselves from a haulier into a logistics provider, a 3PL or even a 4PL company.
The terms 3PL and 4PL have come increasingly into fashion in logistics over the past few years. 3PL stands for 'third party logistics', and 4PL of course stands for 'fourth party logistics'. But before we look at the difference between them, lets go back to basics: specialisation in 1PL, pure transportation. A specialisation that is becoming more and more difficult as time goes on. This is a result of, among other things, increasing competition from companies in the former Eastern Bloc countries (or branches of Belgian companies that are based there).
Focusing on particular niches may provide a solution, but many carriers have opted to expand their activities further, providing warehousing services to their customers on top of transportation services (2PL).
'It is a way of bringing added value to your role as a haulier that allows you to distinguish yourself from pure carriers. But if you are really looking for added value, then it's 3PL companies you want, as they also provide logistics alongside haulage and warehousing. By also offering logistics services, these companies gain more control over the supply chain of their customers, and strengthen their position at the negotiating table,' explains Jean-Marie Becker.
However, 3PL companies ultimately remain contractors, as the shipping company for which they work continues to call the shots when it comes to strategy. A 3PL company thus focuses on activities at operational and tactical level in order to squeeze as much profit as possible out of its own assets (trucks and warehouses).
A bridge too far?
The next step in this trend is the arrival of 4PL companies. These companies become real chain managers. That also means that they often do not use their own equipment, but still seek to provide the best solution for their customer's supply chain. A 4PL company will then call upon partners to implement the solutions it comes up with, and therefore often turns to 3PL companies, which take care of transportation, storage, value-added logistics, planning and even supply management. For most Belgian companies, however, this far-reaching development is a bridge too far: they mostly tend towards 3PL specialisation.
'I believe that the future lies with family-run 3PL firms, along the lines of Dachser, Kuehne + Nagel and Galliker,' admits Jean-Marie Becker.
According to him, the future is more likely to lie with them than with large groups in the hands of equity funds. That is because these funds buy and sell companies when this is of most financial benefit, and are therefore a much less reliable partner for shipping companies and production companies.
Niches: a starting point
Regardless of the changes that transport companies have undergone in recent years, the quest for market niches remains a must. No matter how big or small the company.
'There are plenty of examples of companies who have successfully focused their activities on a particular market. A fine example of this is the relatively small company Esser & Lennertz from Bilstain, near Liege, which specialises in wholesale trade in sand and gravel, and has also expanded to become an internationally active construction materials haulage company. However, medium-sized enterprises can also find success on niche markets, like in the case of Havart, which grew from a crane specialist to a logistics service provider for all heavy goods,' says Jean-Marie Becker.
Not just for the small fry
Today, though, even the big players recognise the importance of niche markets. Katoen Natie, for example, is developing no fewer than 17 different business lines, in which it positions itself as a specialist in particular niches.
'That means art, automotive, petrochemicals, port operations, process engineering...the list goes on. But they're not the only ones taking that approach: Jost Group is now looking to 'split' into the divisions Europe & Maghreb, Integrated & Customised Logistics and Air & Sea Freight,' continues Jean-Marie Becker.
Another big name in the Belgian transport sector that has understood very well that versatility and specific niche specialties can go hand in hand is TDL Group, which has simultaneously formed the divisions Fresh Logistics, Building Logistics, Dedicated Logistics, Pharma Logistics and Coldwayexpress, making it both a specialist and a generalist.
Is e-commerce resulting in an overhaul of the sector?
Trade conditions have changed dramatically since the advent of the internet. Small retailers were suddenly in direct competition with global traders. Consumers no longer just purchase goods from the shop on the corner, but also from other (and sometimes distant) countries. This trend is the driving force behind transport and logistics worldwide.
It goes without saying that developments as drastic as e-commerce, for that is the phenomenon described above, lead to the emergence of specialists focused on providing logistics solutions for that phenomenon.
'We are not only seeing logistics providers becoming e-commerce specialists for deliveries coming into Belgium, like in the case of PFS Web, but also companies working in the opposite direction,' notes Jean-Marie Becker.
He is referring in the latter case to Sedis, a company from the west of Wallonia that is a prime example of such a development. This company has effectively responded to the fact that the middle class in China has become more well off and is happy to splash some cash. People love the kinds of products available from Belgium, and Sedis makes sure that everything they order arrives safely at their front door in China. Euroterminal, for its part, saw its revenue almost double in the space of one year thanks to e-commerce.
'In actual fact, anyone can become a 3PL in specific e-commerce sectors, as this is a fledgling sector with an enormous potential for growth,' concludes Jean-Marie Becker.
Dare to believe in cooperation
For many years, cooperation between hauliers was taboo in the sector. All too often, carriers viewed their counterparts as a threat rather than an opportunity. Yet certain forms of cooperation have enormous potential. Especially now the Viapass mileage-based vehicle tax is looming large on the horizon...
Jean-Marie Becker is convinced that the impending introduction of the Belgian mileage-based vehicle tax will encourage more cooperation among Belgian hauliers. 'It's actually astonishing that people didn't start putting their heads together earlier and more often,' he continues.
No-one can go it alone
Becker sees opportunities for cooperation at various levels: between colleagues active in the same sector, but also between companies from the same region. And European networks are trailblazers when it comes to such collaboration. That includes Astre, Big Move, Pallet and others. These networks were born of the realisation that it is not possible for hauliers to master everything to perfection. If you are active at European level in particular, you cannot have an equally strong presence everywhere.
'Colleagues can plug that gap and increase the level of service provided by your company, whilst also improving their own quality level. Cooperation is the key to being able to provide for customers any time, anywhere,' says Jean-Marie Becker.
Sometimes, seeking opportunities for cooperation may go hand in hand with striving to improve quality. RoadSpirit is a prime example of this. This is a Belgian group made up of family firms in the transport and logistics sector who aim to achieve economies of scale in as many areas as possible by pooling their resources.
Mileage-based vehicle tax to affect transport and logistics
The Viapass vehicle tax will not be without consequences for the Belgian transport sector. However, it remains to be seen whether this new tax will have the effect intended by the government. For hauliers, the mileage-based vehicle tax will certainly result in increased costs, some or all of which will have to be passed on to customers.
This will result in rapid changes to the face of the sector.
'At the moment, everyone is busy doing their calculations. How much will the mileage-based vehicle tax cost hauliers? What share of those costs are a result of empty kilometres or kilometres racked up on the way to picking up goods? What share of those costs will it actually be possible to pass on? And they are certainly already thinking about how and when these extra costs will have to be negotiated with clients,' warns Jean-Marie Becker.
Whatever happens: the sector is trying its utmost to arm itself against what is to come, and is therefore on the lookout for solutions to reduce the number of empty kilometres to a minimum. This may be done through collaboration with other carriers, but also through strategic acquisitions.
Absorbing own transport
Another potential consequence of the mileage-based vehicle tax is that many companies who currently transport their own products may no longer regard this as a profitable exercise. And this brings with it an opportunity for professional goods transporters, who can grab the chance to gain extra custom. Extra custom that may help them to compensate for their own empty kilometres.
'And this is not an original idea, by the way. When the transport landscape changed in Switzerland – the first country to introduce a mileage-based vehicle tax – you saw a clear shift from own transport to third-party transport,' stresses Jean-Marie Becker.
The future is bright for Belgian family transport firms
There are many latent threats to road transport and logistics in Belgium. Does the sector still have a future? Belgian family firms certainly do!
Family firms are often in a stronger position than they think. As they are run by people with a real personal stake in the company's equity, such businesses often pursue a long-term strategy. No sign of speculative strategies from equity funds that may cause instability. And no decisions from managers on the basis of the effect they may have on annual bonuses, but instead a long-term strategy aimed at the successful continuity of the company.
Big or small?
It is of little relevance whether the company is big or small. In fact, there is no such thing as a generic critical mass. The specific critical mass of a company depends on its activities and profitability. However, certain trends cannot be ignored. For example, shipping companies are trying to work together with fewer partners.
'But the real question is what the benefits are, and whether carriers really need to enter into such arrangements. A vehicle fleet of 100 trucks is not necessarily better than a fleet of 70. Transport operators must think very carefully about that. First and foremost, it is a question of what they want themselves. What future they see for their company,' says Jean-Marie Becker, CEO of MMM Business Media.
Factors that may play a decisive role are whether or not there are successors to take on the company, whether an operator is prepared to take risks in order to grow, and whether they think it is all worth dedicating their lives to, day and night.
Flexible family firms
One of the strong points of family firms is their flexibility, which allows the strengths of a small business to be combined with those of a larger company. Healthy family firms have all the necessary resources in-house to be able to respond to tenders. And these are of crucial importance in the modern transport and logistics sector.
However, family firms should not lose sight of the importance of management tasks. Family firms certainly like to push themselves to the limits of their capabilities. When a company gets too big for the family to handle, however, it may be advisable to hire in an external manager to ensure all management functions are performed professionally.
'Van Moer Logistics is a prime example. Manager Jo Van Moer realised a few years ago that his company had grown too large for him to continue managing it himself. That is why he hired Eric Noterman, CEO of a large firm, to set his company on the path to growth. In this way, Jo Van Moer lifted an obstacle that may have impeded the further growth of his company,' opines Jean-Marie Becker.
Family firms who have their affairs well in order are not only able to stand up to bigger competitors and grow to become a solid 3PL provider, but can also look optimistically to the future in spite of factors such as the mileage-based vehicle tax, re-flagging, 'Code 095' driver training, new rules of play on weights and dimensions and predicted technological trends, such as the arrival of increasingly networked and even self-driving trucks.
How will the Belgian transport & logistics sector evolve?
Jean-Marie Becker, CEO of MMM Business Media, talks in more detail about five hot topics in the transport and logistics sector.
Diesel engines are currently in the firing line, not least due to the Volkswagen scandal. For trucks, diesel remains an essential fuel source, although a growing number of alternatives are now appearing. Do you think they are feasible alternatives for the short term?
Jean-Marie Becker: 'Today, LNG has a head start over other alternative fuels. But many transporters are still looking for the right solution, and no clear winner has been crowned yet. For their part, most vehicle manufacturers are placing their bets on LNG. However, the problem is that LNG-fuelled trucks still have a limited capacity. If that capacity were to be increased, there would be more potential applications, and more of these kinds of trucks would start appearing on our roads. Iveco is now talking about achieving engine power of 400 hp. That's going in the right direction, but the possible applications remain on the limited side. In addition, there are currently very few LNG filling stations, although it is true that transporters usually open their own station when they purchase a number of trucks that run on alternative fuels. These carriers are also contributing to expanding the supply network, as their stations are open to third parties, too.'
Is there a future for the hybrid and electric trucks of today?
Jean-Marie Becker: 'Hybrid trucks can already be used for inner-city distribution. However, for the time being the technology only works in smaller vehicles. In all other cases, today's technology doesn't stand a chance. The same applies to fully electric trucks. Due to the extra weight of their batteries, they lose so much loading capacity that they are no longer profitable.'
The appearance of Eastern European carriers has caused an upheaval in the Belgian transport industry. Re-flagging of fleets, increased and sometimes unfair competition... Belgian carriers have ultimately been given two options: prepare to compete or redirect their strategies towards national transport in certain niche sectors. How do you expect this situation to develop?
Jean-Marie Becker: 'Europe as a whole certainly faces a number of threats, but this has also given rise to opportunities for Belgian carriers. The economic reality has also changed compared to a good fifteen years ago. Today, Belgian carriers don't just set up a branch in Central or Eastern Europe to avoid paying high social security contributions in Belgium: having a branch in those regions also represents an additional asset in negotiations with customers.
Let's not forget that many shipping companies are now located in the former East Bloc countries. This means that there are opportunities there for carriers. Primarily because there is no longer an imbalance between traffic coming from and going to Eastern Europe. Consumption has also increased there, meaning that a lot of processed goods are now being transported to those countries, which was certainly not always the case. By setting up a branch there, too, you can ensure you get acceptable prices and balance out your outbound and inbound prices. Combined with a strong foothold in Belgium, that gives you a solid basis to grow further.'
By 1 September 2016, all truck drivers must have undergone 35 hours of training, otherwise their driving license will no longer be valid. Do you think this will be a problem for road transport in Belgium?
Jean-Marie Becker: 'On the whole, it is believed that 20% of drivers will not have an official attestation of competence, as they have either no training at all, or have not received enough mandatory continuous training. This means it is high time to turn the tide. I personally think that 'Code 095', which is the official name of the training course, is a good thing, as it will bring additional skills to the sector as a whole.'
And now one last question on the mileage-based vehicle tax. Do you think the sector will be able to absorb this extra cost?
Jean-Marie Becker: 'Well, if you bear in mind that the cost impact of the measure will be around 10%, and the average margin in the sector is 2.5%, you don't need an expert scientific study to realise that the sector simply cannot afford this additional tax.
Transport operators will have to do two things. Firstly, they must attempt to pass the cost of the tax on to their customers, but they will also have to increase their productivity at the same time. If they do not, their businesses may swiftly end up in financial difficulties. There will certainly be a good deal of concentration. In fact, this is already underway. One of the motivations behind acquiring other companies is the desire to expand domestically. With more branches, you can limit the number of empty kilometres to a minimum.
Collaboration is another solution, but it isn't all that simple since the computer systems used by the collaborating companies must be able to 'talk' to one another, and you also have to think about how to deal with differences in tariffs. If the opportunity arises, carriers may enter into collaboration with a few of their clients. But all the pieces of the puzzle will have to fall into place.
Because the mileage-based vehicle tax applies to all distances driven, companies who transport their own products will see their costs rise even further than professional goods carriers. Collaborating with a carrier or relinquishing their fleet to them is going to be the only way to limit the impact of the tax. The acquisition of fleets in this way presents an excellent opportunity for professional carriers. But beware: they will have to be quick off the blocks, because there will be more than one company seeking to fill up their empty kilometres in this way. However, the last thing they should do is acquire these companies for the sake of it, as their activities must still be in line with those of the carrier themselves. So a little bit of research beforehand is advisable.'