MEETING THE CHALLENGE
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By Alan Smith, F.R.S.A. THE effect of competition from other sources of energy has been to make the coal distributive industry consider the methods to which it has adhered for many years: " The time has come when we have got to go out and sell coal," was how one merchant put it to . me., Another thought that the National Coal Board should do more to maintain the consistency of .quality of coal.
"A customer might have an installation designed for a certain grade of fuel," he explained, "and we would undertake to supply him, but no matter how well we might serve him,. our efforts would be negatived if the coal weren't consistently of the standard required.".
Hint to Producers This hint to the producers was echoed by several other traders, and concerns what seems to be the chief step •that could be taken to maintain coal sales, overriding any improvement that could be made in methods of supply. A striking example of new thought applied to selling coal, in the domestic-fuel section, is the use of 56-lb. paper sacks.
J. H. Bennetts, Ltd., Penzance, adopted this means in December, 1957. Unqualified success has resulted. "We are now more than ever convinced that this method is the future of the bagged-coal trade," Mr. Bennetts told me. The company's sales of " cleanpacked " fuel continued to rise, disproving the argument that the public would not pay the extra cost. It might, however, be borne in mind that as the price of coal in Cornwall is inflated by long-distance transport charges, the premium for packaged coal may not be relatively as much as in, for example, the East Midlands.
Nevertheless, with rising standards of living, the experiment might well succeed in other areas. It presupposes, however, covered loading facilities and the use of roofed vehicles. Bennetts have built a depot where lorries tip into . bunkers and the fuel is fed through to the sack-loading machines. The packing rate is 120 sacks an hour.• Not only is fuel delivered in paper sacks, it may also be bought at an order . office, in which case the customer can take it home by car. This aspect has aroused great interest in the coal trade as a possible way of coping with sudden peaks of demand in winter. It is envisaged that when a customer, caught coal-less by a cold snap, has to be told that his order for 5 cwt. cannot be delivered for two weeks, his position could be ameliorated by the offer of a 56-1b. sack to tide him over for a day or two.
For the domestic coal trade is intensely seasonal, and the position has far from been improved by derationing. Abolition of control was, in the public mind, synonymous with abundance, and there was probably less stimulus last summer to buy at low prices than before, when people would congratulate themselves on their forethought in stocking up a rationed commodity. But came the cold spells this winter and in an hour or two merchants received orders for weeks of delivery work at full stretch.
Brig. Kenneth Hargreaves, head of the Hargreaves Group, whose distributive interests are mainly in Yorkshire and Lancashire, endorsed the need for progressive methods in selling coal, but, whilst he told me that he thought the wide adoption of paper sacks was vital, he felt that this must be accompanied by means to stimulate summer stocking. A combination of low summer prices; backed by good advertising, together with the sale of fuel in convenient packaged form to meet winter peaks, would spread the load on the transport system.
All the traders to whom 1 spoke were more confident that domestic sales of solid fuel could be kept up than they were about the position in the industrial market. Although electricity and gas were convenient forms of heating, they were more expensive than solid fuel, and the modern type of slow-burning stove was doing Much to sustain demand.
Domestic Outlook did, however, mention to the Coal Merchants' Federation that house-coal deliveries in London over the past four years had fallen by a third. But this, apparently, had not been matched elsewhere: in fact, the coal not taken up by London was eagerly bought in the rest of the country. An assumption in years past by the N.C.B. that demands for house coal would decline had led to difficulties whereby urgent changes had had to be made to meet current needs for this type of fuel.
Developments in electricity and gas production, though, might alter the present economy vis a vis solid fuel. The Gas Boards, for example, are hoping for great things from the import of petroleum gas, which might make possible the sale of gas at extremely low prices. It is reckoned that a 30,000-ton tanker could import, in a year, gas to the equivalent of 2m. tons of coal.
Gas Boards' coke output is rising and this, so far as road transport is concerned, is an encouraging aspect. Tonnage consumed in 1957, apart from foundry and blast-furnace coke, was 131m., of which about 10m. was shifted from the gasworks by road.
Shifting Coke
In that year, the Boards sold 40 per cent. of their coke through the trade, and it would seem at first sight that the distribution will remain largely with them. Coal depots have been established on the railway network, but this does not always provide the most satisfactory connections for shifting output from the gasworks, some of which are, indeed, not railconnected.
In fact, some disused gasworks are being kept open solely as coke depots, the fuel being bridged from distant works. The Boards are, however, encouraging the trade to sell coke and many distributors are making great efforts to raise their coke business, so that the proportion of sales by the trade may rise above 40 per cent.
But whatever the commercial arrangements are, road transport might recoup in coke haulage part of what it loses in coal. So far, coke seems to be most popular in areas remote from the pit districts.
The Clean Air Act, 1956, is a factor in this respect, even if so far few local authorities have taken appropriate • measures under its provisions. Concern about this was expressed to me by Mr. A. T. Austin, of Associated Coal and Wharf Companies, Ltd., which operates in south-eastern England. He thought that some authorities might declare smokeless zones without regard to the ability of the industry to supply suitable fuel.
At present, the supply of smokeless fuels was, he Eaid, insufficient to meet any big programme which might be launched under the Act. Coal of the right quality burned in a modern appliance, such as an underfeed stoker, however, eould not infringe the Act. From this it would seem to follow that even if the whole country becomes " smokeless,". it will not necessarily mean the complete abandonment of the raw mineral.
Mechanization Problem
This is but one of the many imponderables which underlie the trade's biggest current problem—that posed by mechanization. The present structure of fuel distribution will haVe to change in keeping with the altering pattern of consumption: therefore the trade must pause to consider how best to implement costly mechanization plans.
Although the cost is high and the financial benefits are not quickly felt. mechanization is being forced upon the trade, because of growing difficulties in retaining labour, even if, with today's level of unemployment, this stimulus has for the time abated. Mechanization will necessitate a rationalization of depot-to-customer distribution, with the closing of many small depots and, the re-equipping of the remainder.
This has already been achieved in the oil industry, and as a leading member of that estate sat on the Robson Committee, it was probably no accident that they did not sympathize with the trade's rather cautious attitude towards mechanization.
Mr. W. A. Smith, director of Charrold, Ltd., is a supporter of mechanization, though he takes the view that it should be pursued primarily for its own sake in reducing physical laboriousness than for commercial advantage in these days, the one leads to the other, in any event.
He pointed out that the extent of mechanization at any depot was governed by its throughput. The layout of the Charrold-designed depot at Palace Gates, in North London was appropriate to deal with 55,000 tons a year, but where only 12,000 tons was being handled the equipment could not he as elaborate.
Clearly, then, the higher degree of mechanization, the greater the number of small-medium depots that must be amalgamated to achieve the optimum throughput. Nevertheless, mechanization remains expensive. Like the Charrington group, of which Charrold are a part, A.C.W. maintain a constant survey of their structure to discover where such amalgamations can be made for the purpose of introducing mechanization, and this policy is probably common to all big undertakings.
What it spells for the small man who cannot but continue to work in c/6
the time-honoured way in cramped railway sidings using rudimentary equipment . is not, perhaps, hard to discern, although one must remember that in British commercial life small businesses are often stubbornly tenacious. Their future might lie in co-operative working, with joint investment in mechanization at a common depot, but the retention of individual operating identities. Moreover, in the course of my inquiries 1 detected-no expansionist policies by big concerns aimed against small businesses. A " live-and-let-live " attitude was more apparent.
One of Charroldl's majOr contributions to mechanization has been the conveyor delivery vehicle . for bulk industrial supplies, It was evolved, said Mr. Smith, so that improved service could be given to customers, bearing in mind the competition from fuel oil (which Charrington also supply).
His claim that the high cost of such vehicles could be recouped because of the avoidance of delays in trimming, as is necessary when fuels have been tipped, was confirmed by A.C.W., who have found their Charrold conveyors particularly valuable for deliveries to premises difficult of access. Hargreaves, on the other hand, although they too find their conveyor lorries satisfactory for serving small premises, have many big consumers whose stockyards are laid out for tipper delivery, and the higher cost of conveyors discourages their adoption.
For domestic work, Charrold offer the Autobagger, a machine which undoubtedly reduces physical effort but about which reservations were expressed. Designed against a metropolitan background, it is not of strong appeal to those merchants whose custom prevents them from dispatching vehicles with loads all of one grade of fuel and thus employ " fiat " lorries. This is often the case in London, but not always so in the rest of the country, except in the immediate vicinity of collieries. Greater exploitation of the Autobagger may be possible with the amalgamation of small depots into larger units, from which suitable loads for it could be aggregated. "
Ideas on reshaping coal distribution are widely discussed in the industry, which is by no means taking oil competition lying down. For the Hargreaves undertaking, who collect half of their coal direct from the pits and whose business is mainly in industrial fuel, the approach is different, for example, from that of A.C.W. The southern" concern have an equal interest in the industrial and domestic markets, besides wholesaling to other traders, and take over half of their supplies by sea, about a third by rail and the rest, nearly all coke, by road.
Contrasts in Working
Broadly, Hargreaves collect from more points but deliver to relatively fewer consumers than do A.C.W. Hargreaves have 400 vehicles, . nearly all of which are tippers, and hire subcontractors to a large extent
A.C.W. have 100 tippers to handle their industrial trade and 350 platform vehicles for the household market. On a tonnage basis, therefore, nearly four times as many vehicles are required to distributedomestic coal as for industrial supply. And if this is an incubus upon A.C.W., they at least do not have to cope with pit loading delays. A Hargreaves vehicle may sometimes have to wait for three hours or more to take on a load of a grade in high demand.
Ideas Exchanged An encouraging feature of the coaldistributing industry is the extent to which the individual companies, often through the channels of the Chamber of Coal Traders, interchange ideas and knowledge of their experience. This might be because of the regional demarcation of influence of the big groups, or the fact that the various companies feel that they are all in the same boat.
In the course of my investigations,. I found with everyone an exceptional frankness, and an awareness of aspects broader than his own immediate purview. My conclusion is that radical and progressive changes are afoot in this vital activity, even if the present outlook is cloudy and uncertain. This is taken as a challenge.