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Haulier puts monopoly report behind it

12th November 1983
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Page 92, 12th November 1983 — Haulier puts monopoly report behind it
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Which of the following most accurately describes the problem?

) YOURSELF not only in elight as Britain's last ined road haulier, but subject of much adverse in a Monopolies and Commission (MMC) re an associate company )e reason enough for ned spirits. Yet MacHaulage, that last basstate haulage and assoof the Caledonian yne ferry company, is 'd at work, serving the f many isolated commun Scotland's west coast Hebrides.

AMC efficiency audit on published in February r as part of the series of on the nationalised secle possible by the 1980 ition Act, cast a dark shaoss both companies.

udit found that many of I transport industry's ails of undue preference Iccorded to MacBrayne were true; and that the -length trading ship required by law had nored to the extent that yne Haulage was bound onerous requirements private-sector customers ci access to confidential information.

ii threat of privatisation >Neer the haulage comading many to suspect night be sold off in parts blished companies. But 3 h Secretary George

— hardly the most doc of Mrs Thatcher's cabnisters — has followed a rastic and more sym tic approach. He has !d the assurances of the ly's parent, the Scottish

Drt Group, that many of IC recommendations are

being implemented, and ng for evidence by next of those recommenda'as to appoint a full-time :ecutive at Calmac, rather pending on the shared s of deputy chairman /hittle, who also has reslities with the Scottish )up.

was implemented with !ointment of former North ..rries assistant general er Colin Paterson last !r, and he is operating po!eared as far as Calmac s is possible to the spirit AMC recommendations. arm's-length relationship with MacBrayne Haulage is central to that. "I defy anyone to say we're favouring MacBrayne Haulage. Whatever they get can be achieved by others. We want business from all hauliers," he told me.

MacBrayne Haulage general manager Jack McLaren leaves discussion of the MMC row to others, and is unhappy about the "nationalised" tag attached to references to his company. "We ate a company within the STG, but to say we're nationalised makes it seem that we get a handout. That's not the case." He goes further by saying the company is a profit-earner for STG. While the Group's annual reports have concealed its performance within the travel agencies-to-insurance Scottish Transport Investments company, McLaren points to Companies House figures which show a £217,000 pre-tax profit on £2.6m turnover in 1981, when it carried 64,548 tons. Last year, the STG report shows turnover up to £2.7m and tonnage to 64.968.

Nearly half of the tonnage moved by the 28 articulated units and 28 rigids goes to Lewis and Harris, the largest and most northerly island of the Outer Hebrides, providing an essential link with the rest of the country and using Calmac's flagship, the 1,900-ton SuiIven which operates the ail-year Ullapool to Stornoway crossing. Stornoway is the second largest of the company's 12 depots, and it usually receives five trailers from the mainland every day, three or four from Glasgow and one or two from Inverness.

MacBrayne Haulage treats most loads as general haulage and finds itself handling anything from individual parcels to 20-ton single-drop loads. The coming of Lewis Offshore and the prospect of an oil boom one day on the west coast imposes new demands on the company's resources, but these are still only a small part of its activities.

A walk around the Glasgow depot reveals loads as diverse as mail order packages and inflatable dinghies. The company also runs tar tanker trailers.

Its major problem, not only at Stornoway but throughout its territory, is the one-way flow of traffic. The islands' needs demand that those regular flows go in every day, but their exports are much more thinly spread with four incoming loads matched by one going out.

From Lewis and Harris there is a regular flow of Harris Tweed, raw wool, and fish meal. McLaren finds he can reduce the effect of this by using flat-platform trailers and carrying empties back in piggyback fashion, at least to Inverness, He has also been able to reduce costs by basing three tractive units at Stornoway and two at Ullapool and not running accompanied trailers on the ferry. This has been operated using shunting slave units at the ferry terminals and has cut out the need for drivers to sail with the loads and so add to labour costs and trap drivers into the awkward effects of hours regulations which classify the ferry crossing as duty time.

While this has been good for MacBrayne Haulage, the MMC report confirmed that its competitors were expressly forbidden from adopting a similar policy, and Calmac had ruled out the use of dock-spotter shunters on grounds of cost.

All that has now changed. From November 1, Calmac has introduced its own slave units (deliberately opting not to use an associate's services) and is carrying unaccompanied trailers for £6.25 per square metre instead of the £5.25 rate for accompanied trailers.

This charge reflects the higher cost of the operation which is being confined to the Stornoway service meantime, but the shorter vehicle length alone will mean a saving for hauliers before their other savings are taken into account. The trade associations regard this as a step in the right direction.

This could open opportunities for MacBrayne Haulage or its Lewis competitors to provide traction for unaccompanied trailers being sent from the mainland, but it is a sign of the arm's-length approach that Colin Paterson plays down this aspect of the move. For him, the main advantage is that it releases more deck space at peak periods.

As a further step in its constant quest for efficient operation, MacBrayne Haulage also swops over drivers on the trunk runs from Glasgow. Highland and Glasgow drivers change over at Dalwhinnie, on the A9, thus saving the need to pay overnight subsistence pay as well as keeping well within the hours regulations.

According to McLaren, the hours regulations which have been much criticised in the Highlands where the combination of remoteness from main markets and poor roads has had a major impact, are not a serious problem for his company.

The wage agreement with MacBrayne Haulage drivers is based on a 25mph running speed. That permits 200 miles in eight hours but there is a bonus payment for 250 miles per day, and improvements to the A9 mean that the 10 hours allowed for a return duty to Dalwhinnie (from either Glasgow or Ullapool) can be done in seven-anda-half hours or perhaps less. Scrutiny of tachograph charts will reveal whether drivers exceed the speed limit.

Neither the volumes on offer nor the social responsibilities of its role leave MacBrayne Haulage much opportunity for specialising in the way a ruthlessly commercial company can in a more densely populated region. Nor can it pick and choose.

Only the physical dimensions of Calmac ferries restrict its traffic to the islands, and it will go to some effort to cope, for instance, with dangerous goods. As there is no open cargo deck space on the Suliven, hydrogen cylinders for instance must be shipped on the Uig-Tarbert ferry, tt brides, which connects with Harris. In such cas other vehicles are permit the open section of the deck. Unfortunately, it is s possible to provide cusi with next day deliveries c loads.

While Uist and Skye are the next most important rr for the haulage company, ating 21,791 tons last year not always the case. changing drinking tastes the Scotch whisky trad deep recession, Islay was equally important and sented 20,075 of the 62,4: carried in the peak year c when there were 82 lorriec fleet. Last year that fell tc tons and there is no optirr the trend changing in th future. Loads of around 7C week are the norm at pres,

A private-sector ha James Mundell of Ta Argyllshire, handles arm per cent of what is left whisky traffic and repres major competitor for Mac! Haulage on this route, maintaining a "hand in mutually helpful relatic with MacBrayne.

MacBrayne Haulage ma a daily commitment to 1st has a depot at Port Ell revenue has helped off: disappointment caused low tonnages, thanks tc newspaper and Roya contracts, but a manifest the arm's length relat with Calmac could spo that.

The first of a series of analysis projects on th network (dubbed "Cal revealed a demand for timetable devoid of s( variations and a fruit of tl the introduction last mor later first sailing (8.45anr Kennacraig on West Lo' bort.

While this was selec meet not only passenc mand but also hauliers' r ments, it means that 0and newspapers will arrh, It is almost certain to be instead by Loganair, the n airline recently taken o British Midland Airways, introducing an early rr flight at the end of this Unless island pre persuades Calmac to a schedule, MacBrayne Inn look forward to havir the Royal Mail parcels c before long.

"Calmap" nonetheless tental long-term hope fc Brayne Haulage and its cc is a research exercise id to match passenger ght services to the needs narket along lines similar icotmap project underta

the associate Scottish oup, and it is being aclied by intensified mareforts to encourage more traffic to the islands. If icceeds, Colin Paterson 5 that the island econo ill and stimulate dew more freight.

the haulage company traffic for delivery anyn Britain, economics dic e use of subcontractors is south of Glasgow. As s English operators are id to backload south for 1, Jack McLaren would be to do otherwise.

so calls on other hauliers ict traffic from the south rocesses parcels traffic the Scottish Parcels/ ie network operated by 31 Freight. The Roadline tion is an appropriate one C's parcels group is I by Steve Abel, the Aber who established MacHaulage after STG broke

old David MacBrayne )rry/bus company into .e units.

jor part of the company's its formation was to take the traffic carried usly on weekly cargo rs from Glasgow, and

J ng ed it into maximum articulated vehicle operathe first time.

d to operate the most ,-available vehicles in arly days and obtained a 3 fleet of Guy Big Js beDuld be more selective. It me to like the perform

f the Rolls-Royce Eagle esel and specifies this in id Foden tractive units 3re the types currently in

Two of each will be next year subject to STG

p prova I.

old MacBrayne cornpreference for Bedfords ier work persisted until ear when it stopped 3 naturally-aspirated enThe haulage company's angineer was unhappy

turbocharging for Mace's operations and

td custom to the Dodge 3ndo 2 for eightto 12 tonners. They have proved very successful and four more are wanted for next year.

Jack McLaren has looked at the possibility of running at 38 tonnes but sees no advantage at present. To test the market with one vehicle would generate many unwanted problems. Its drivers would require to be paid at an enhanced rate, there would be jealousy over which drivers did handle it, and a second tractive unit would be needed in Stornoway to avoid parttranshipments of full loads.

There would also be an immediate need to fit sideguards to all semi-trailers likely ever to be used with the 38-tonne tractive units. McLaren accepts that this caution could cause problems if, for instance, a customer wanted to move a 26 ton casting, but for the ordinary customer he offers this reassurance. "It won't affect the customer because he will get the same tonnage rate. It will not cost him any more."

And rates are an area in which MacBrayne Haulage is bound by market forces. The level of competition is such that it cannot exploit its specialist knowledge unreasonably, and it finds itself used as a guideline for some of its competitors who reckon they can win business by quoting just below the MacBrayne rate. It also has been helped by Cal mac's ability, through Government subsidy, to freeze most of its rates since March 1981.

Even if the much called for road equivalent tarrif (matching ferry charges to the equivalent cost of an equal distance by road) never appears, freight charges to the islands will have been kept well below the rate of inflation over the past three years.

Another bonus for all road transport operators using Calmac is yet another product of the MMC report. All three Shipping Services Advisory Committees — the user groups which act as watchdogs for Calmac's planned changes in services on the Clyde and Western Isles — have agreed to extend representation to nominees from the Road Haulage Association and Freight Transport Association from their next meetings early in 1984.

Calmac offered the hitherto local authority dominated committees the chance of fulfilling an MMC recommendation that someone other than Calmac general manager Ian McLean should chair the sessions, but they were happy for the existing arrangements to continue.

Colin Paterson, who looks forward, to a future with less overt MacBrayne-bashing (a pursuit comparable with British Leyland-bashing elsewhere) is happy about the RHA and ETA representation. "I think it will be very useful to have them on the committees."

Jack McLaren sees MacBrayne Haulage maintaining existing policies. It must remain orientated towards the west coast and its needs, and may be able to start expanding. The reduction of the fleet from 87 vehicles in 1978 achieved significant cost savings but further large-scale cuts would compel what was left to bear greater shares of largely irreducible overheads.

But whatever happens, it is unlikely to be against such a traumatic background as that generated during the period of the MMC report.

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