Size and structure
Page 19
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Some critical problems of small and medium-sized transport operators in this country were touched on by the managing director of the Transport Development Grout), Mr J. B. Duncan, in his Spurrier Memorial Lecture this week. The viability of the 10-vehicle fleet run 24 hours a ciay by the owner/boss from his home is accepted, but profitability should not depend on what Mr Duncan characterized as "a rnost superhuman efforts". TDG has noted that when adequate staff are employed to avoid this situation, the 10vehicle fleet may have to be expanded to 26 vehicles to make the operation profitable again. Above that size, management and succession problems loom large. Small wonder that increasing numbers of small proprietors look to the holdingcompany type of solution. But only a ,small proportion of candidates pass through the mesh of accountants' scrutiny.
There is increasing evidence, supported by Mr Duncan's remarks, that well-established firms operating 50 to 150 vehicles are finding finance for further -development a major problem. Inflation is almost as hurtful to the medium-sized firm as to the small, .perpetually under-capitalized one. It is ironical that a chronic lack of working and development capital should be a feature of an industry which, as Mr Duncan showed so clearly, has thrived on its ability to replace its principal capital assets vehicles — so readily and thus achieved unrivalled operating flexibility.
Questioners at Monday's CIT meeting were unable to shake Mr Duncan's belief in the TDG article of faith that each constituent trading company under the holding umbrella must be given business freedom, with no imposed commercial, purchasing, personnel or wage level decisions. But the holding company's role is not just a passive one: a vice-like grip over capital expenditure is another tenet of faith, and weak companies must sometimes swallow the medicine of the company doctor.
It is salutary for the industry to be reminded of the facts of its own life by a well-informed and shrewd insider. The many newcomers to the industry may well find the heat in the kitchen too stifling to bear.