toad-rail integration: the )utch formula
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Transport Act, 1968, will fail in its lose if more goods are not carried by The Freightliner network is increasing even though the separated accounts show a loss and indicate that several s must pass before the network is le, it is hard to imagine that the system be cut hack, or even scrapped, by any ;mtnent in the next decade. When so h public money has been poured into a ern system which has required many essional road hauliers and own-account ators to change their form of operation :ally, balance sheet realities are likely to icked under the carpet.
L Holland the State railways were profituntil three years ago, but since then its have been recorded. In a recent view with Mr. John Dorjee, managing :tor of Van Gend and Loos—the largest haulage organization in Holland—I told that the railways would probably osing money for another 10 years. ----which is owned by the Netherlands Itys—has been given additional responties recently. The railways operate no :les of their own, apart from a few run le signals department. VGL do all the aion and delivery work for sundries parcels traffic and their staff has rexi rail staff in rail depots and tranship centres. Even the canvassing of :Is customers is now a VGL responsi
insition period
ie commercial responsibility lay with Dutch railways until April 1968—rail Aing the profits and the losses of As and smalls operations. Now VGL been given a transition period of four ; in which to make the whole operation :able. Thereafter, full commercial rewill be expected. The railways will be 's contractors—until last April they VGL vehicles.
though at the present time only—to : Mr. Dorjee—"a rather small part of 3tal parcels and smalls traffic is under :ontrol" this quantity amounts to over 1,000 tons per year. This traffic is fully -ated as between road and rail and like the practice in Britain—is almost ;ly palletized. The introduction of mecal handling methods in the Netherrailways and in the VGL organization early 1950s was very costly and was ed by the conviction that labour costs
I continue to rise, so that in the long he expensive investment would pay off. Dorjee had no doubt that the overall losses in the early years would have been much greater if the investment had not been made. Wages, he noted, were still going up!
The new road-rail organization has called for the country to be divided into a number of zones, which are in fact known as "groups". The principal station in each group is the "group head station" and all such stations are inter-connected by rail. Most of the regional rail services in Holland have been replaced by road services in recent years and while movements between group head stations are by rail, transport within the group is by road. There are at the moment 27 groups.
Each day, with a concentration of traffic in the afternoons, sundries traffic is brought in to the group head stations almost exclusively by road. Group wagon trains run according to fixed schedules during the evening and night between group head stations each of which receives at least one railway wagon load from every other group station. On arrival the goods are unloaded and sorted into three categories: (a) goods destined for the town in which the group head station is located. These goods are sorted in delivery round order.
(b) goods destined for other places in the group. These are sorted according to regional delivery service requirements.
(c) goods which are forwarded by road to an important town in the group, where they are further sorted and delivered in the town and its environment.
24-hour cycle
The goods in category (a) and (h) are placed in the bays while those in category (c) are forwarded during the night. The next morning, delivery service drivers load their vans and deliver the goods, the total transport cycle taking not more than 24 hours.
Another powerful reason why the Dutch rail-road services palletized so early was their acceptance of the need of the carriers to adapt the transport system to the transport user's internal conveyance. When pallets and fork-lift trucks are "common currency" between users and providers of transport a failure to accept reality would have been serious. VOL use 40in. X 48in. pallets which are moved in the depots by fork-lift and pallet trucks. They are prepared to face a pallet loss of between five and eight per cent a year as an unavoidable on-cost.
Package labelling is crucial to economic parcels operations and the Dutch employ an ingenious though quite logical system. Labels are affixed either by customers or on arrival of the goods in the departure sheds to indicate the group head station number code. On both sides of the label the name and number of the destination group head station is printed together with—on one side of the label—a black dot, the size of a marble, and on the other side a cross.
The dot indicates that the goods are for consignees in the town where the group head station of destination is located—in other words, where a local delivery service by road operates. The cross indicates that the goods must be forwarded to other places in the group of destination for delivery within the region.
Goods which are not already palletized by customers are placed on pallets as soon as possible after arrival at departure points. (If necessary weighing or measuring precedes this.) The pallet units are kept together as much as possible and are then conveyed by pallet truck to an assembly point where they are picked up by fork-lift trucks and loaded into their respective (covered) railway wagons. Small lots too small to build complete pallet loads for the group head station go to a sorting area consisting of two rows of box pallets. Here complete pallet units are built up which are conveyed, also via an assembly point, the the railway wagons.
Almost all important transport users enjoy carriage at flat rates. Their consignments are not normally weighed and measured—except for sample checks. Most of the flat-rate customers have their goods labelled by their own staff.
VOL have organized a pallet-exchange system which is increasingly popular. Goods sent by flat-rate customers are palletized in the factories according to group head station of destination and the pallet exchange system is effected on the principle "empty against full". A customer dispatching a number of pallet loads receives the same number of empty pallets in return. Thus 95 per cent of all cargo is palletized. Goods which cannot be palletized are placed in a corner of the railway wagon. Stowage is according to a fixed pattern.
On arrival of the wagons at the group head station they are unloaded by fork-lift trucks and complete pallet loads for one consignee or for one particular town in the group—marked at the departure shed or by the consignor with conspicuous, brightly coloured stickers on the top layer of the packages—are conveyed straight to the appropriate delivery bay according to whether for town or regional delivery. The "mixed pallet units" consisting of goods for several consignees or places in the group, go to a sorting bay, where the goods are sorted according to local and regional destinations (indicated by the dots and crosses on the labels). In a secondary sort the goods are then sorted according to delivery bay.
Palletized inter-urban road services have been developed between group head stations and a number of towns in the groups. The progressive reduction of groups served by rail from 36 to 27 shows the increase in the road share of the total movement, for the nine former group head stations and a number of other important towns in the groups are now served by road from the group head stations.
Transport between the sheds of the group head stations (trans-shipment sheds) and the sheds of these other places (trailer sheds) is carried out palletized in big semi-trailer combinations. In order to speed-up transshipment from railway wagon to semi-trailer at the group head station of arrival, the towns which were formerly group head stations have their own labels which make it possible to form "through pallet units" at departure points. Such units at their arrival at the group head station of destination can be conveyed from the railway wagons to the semi-trailers for direct transfer, without having to break down the pallet unit in order to sort out the cargo.
VGL operate about 800 vehicles, many of them Commer Walk-Through vans, renewing 100 vehicles annually. The van capacity chosen-1+ tons or 81 cubic metres—seems small but the modest dimensions and cubic capacity enable three trips a day to be accomplished instead of—according to VGL—only two with larger vehicles. Because of the nature of the work the vans inevitably stand for part of the day, in traffic or at customers' premises. VOL are confident that the output with the small vehicles is greater for a given expenditure.
VGL take research seriously and employ 10 men on it, full time. There are three professional economists—Mr. Dorjee is one himself—labour analysts and consultants. "We are not entirely comparable with the BR and BRS organizations, but I feel we are more efficient", he told me.
Labour relations in Holland present fewer problems than in Britain. There are three main unions run by Roman Catholics, Protestants, and Socialists. "In great measure they collaborate; their views do not differ much on fundamentals. I think the RC and Socialist union will amalgamate soon—and probably all three will merge one day," thought Mr. Dorjee. The central transport workers' union—recruiting dockers and lorry drivers—is a recent amalgamation.
Proud Dutch
The Dutch are rightly proud of winning 40 per cent of all Common Market road transport, though they have only 21 per cent of Common Market licences. I asked Mr. Dorjee if he foresaw an international market for drivers. (VOL have a daughter company with 35 vehicles plus trailers on international operations.) "If the cost of living in the common market is harm
nized," he said, "this could happen. Drivers wages in Holland and Italy are different now—in the long run they will be the same. The Common Market policy is for free mobility of labour—there are Italian labourers in Holland and we ourselves employ 100 Turks. There is no discrimination against coloured immigrants from Indonesia or elsewhere. They are teased a bit but some qualify for promotion in a year or two."
What is the explanation of the virility of the Dutch economy and particularly of the much-envied road transport and ports sectors? Mr. Dorjee said that a good start was made when the rail system was rebuilt with British and American aid in 21 years instead of the 5 years experts forecast, after the total destruction of the war. But the psychological climate of the whole country was transformed when the Indonesian empire broke away. "We thought we'd be poor thereafter; the profound shock acted as a great stimulus to development."
Mindful of the Dutch railway losses I asked Mr. Dorjee if—with the benefit of hindsight—the Dutch would have been wiser to develop a wide road network instead of rebuilding the railways. He agreed that some Dutch road hauliers would be happy to see the railways concreted over. "We can't accept the rail losses and we're taking active steps to improve matters. But the space-efficiency of railways in this densely populated part of Europe is a major factor; growing road congestion will help to put more traffic on rail. Water traffic here is 'a threat to road and rail—we have a great controversy on track costs of road, rail and water transport just now—as the water carriers escape all track costs." He foresees a lot more lorry piggy-backing by rail across Germany as a result of Herr Leber's policies. The 50 litre limitation on fuel applied at the German frontier was highly unpopular in Holland. "No such policy operates when German hauliers cross our frontiers. They tank up with our cheap fuel and travel to or from Rotterdam very cheaply."
VGL aim to isolate the financial results of all main activities despite the difficulty of cost-splitting between some integrated functions. Arbitrary assumptions may have to be made but they are preferable to an obscure global position.
Innovation, often in conjunction with the research departments of customers, is welcomed. The impressive clothes distribution service giving an overnight delivery service from hundreds of manufacturers to shops, with clothes on hangers in Cellophane bags is being imitated in several countries. Security van services for banks are a recent feature. Collective delivery services for shopkeepers are being tried out. And there is a readiness to operate commercially under various flags—VGL own two ostensibly private concerns concentrating on removals and packing and forwarding. "In some markets we have to fight to get in," said Mr. Dorjee. "If we buy an established firm we save time and can hope to progress against fierce competition. It is a matter of balanc ing the risks involved in such activities." •