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Good Service

17th November 1931
Page 50
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Page 50, 17th November 1931 — Good Service
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Which of the following most accurately describes the problem?

THE SOLUTION

of RATE-CUTTING

By W. R. JACKSON, The Warpool Transport Co.

HAVING stated, in last week's issue of The Commercial Motor, my views on some of the chief causes of rate-cutting, the cure for which is to create a profitable demand for hauliers' services, I will now explain how I think this object can be accomplished and a stop put to subsidizing unprofitable rates. There are two important points to bear in mind; they are to study customers' interests and to offer service better than that afforded by rate-cutters. This can be done only by having a thorough knowledge of the business; it can best be obtained if the four operations of which the service consists, namely, buying, making, costing and selling, are considered separately.

First, buying can he regarded as the foundation, for if the selection of vehicles, or the supplies with which they are operated, be wrong, the whole business will be wrong, however perfectly the other three operations are carried out. Choosing the right vehicle for the job needs careful thought; the day when a man could buy a second-hand 5-ton lorry and look for work has gone.

Advantageous to Buy the Best.

Usually it pays to buy the best, especially where time and distance are an important consideration. This also applies to materials, by which I mean everything connected with running lorries, such as tyres, petrol, brake facings, paint, etc. Not only do cheap materials cost more per mile, but there is loss of use of the vehicle while parts are fitted or repaired, and the risk of losing business by reason of delays.

There is no other industry in which cheap buying can cost so much. Trying to save Is. a gallon on oil has caused heavy losses to many haulage contractors. A careful study of use against price will give convincing proof that tl.e best is the cheapest, because profits are made by what is earned rather than saved.

Now for a consideration of making the service, which consists of labour and management. The subject of drivers is too wide to give all my views here, so I will say only that it should be more fully realized that the men play an extremely important part in a business. They have to be trusted, away froni any supervision such as exists in a factory, with the vehicle and its load. They are to some extent in control of the time and material consumed; on their care depends the avoidance of accidents, and they represent their employers and customers wherever they deliver.

Drivers should be chosen for qualities other than the way in which they change gear, and should be paid well for the work they do. It is unreasonable to expect . c28 good work for poor pay. The worst employers are always blaming their men, yet they would not expect a good suit for half price.

Next we must consider management ; under this department comes the actual making of the service from the materials and labour that we have already mentioned. It consists of loading the lorries.., to the best advantage, avoiding waste running, using idle time for maintenance work—all the details that make the service a good one. One of the first considerations in any management policy is to avoid buying more vehicles than are needed, in the hope of getting more work ; that way undoubtedly leads to uneconomic rates, with their resulting evils.

The fleet should be kept to a minimum and added to only when there is a certainty of keeping more lorries profitably employed. That inherent desire to expand, which is uncontrolled by the caution of experience possessed in older industries, has put many small and profitable haulage firms out of existence, and at the same time added to the surplus vehicles which are the chief cause of rate-cutting.

Another question, which I think should be considered one of policy, is that of combating the subsidized competition referred to in last week's instalment of this article. In my opinion, the only way to prevent manufacturers from giving unequal terms or service is for every haulier to make sure that he receives his share. The vehicle manufacturers have a certain margin for discount and service, and, in my opinion, the haulage contractor who is easily satisfied is letting his part of this margin go towards keeping rate-cutters in existence, and in that way is helping to keep rates at an unprofitable level.

An Unfortunate Situation.

If this policy be carried out the manufacturers of vehicles and supplies will soon be made to realize that It will pay them to be more discriminate in sales and free service. As it is, the haulage contractor who neglects his lorry by insufficient maintenance, overwork and cheap labour, is doing so, not at his own expense, or even that of the maker ; the cost is being paid by his more careful competitor who is not claiming free service.

The next department is costing, which seems to me to be the most neglected subject in the transport industry, for even the few concerns which use cost systems seem to make big mistakes. The difficulty appears to be in the difference between theory and • practice; estimated costs so frequently fail to allow for the happenings (which, apart from actual outlay in time and materials, result in inevitable expense), such as fog, snow, fallen trees, floods, strikes, holidays, punctures, accidents, illness, trade depressions, bad debts, and a dozen others, any of which can cause a reduction in earnings. For the firms who are optimistically working on theory cost alone, these will mean a serious loss at some time or other.

There is no reason why every haulier should not know his costs. " S.T.R.'s" articles and the Tables of Operating Costs in The Commercial Motor show them clearly and simply, and the haulage contractor who disregards them because he cannot obtain business at those rates, would, as " S.T.R." once said, do better to sell newspapers; he would at least make a profit.

Having considered making the service and knowing its cost, we come to the most difficult part of all, namely, selling it. By selling I mean securing work at a profit ; there is no difficulty about working for a loss, because the office boy could keep a large fleet of lorries fully employed on that basis. If the haulier has a proper knowledge of the costs he will now find it harder than ever to obtain business.

The only solution is to find work which is more important than price, and there is such work to be found.

There will be more and more as senders of goods begin to realize that delays to their goods are not bad luck, but a direct result of cheap service. At present hirers of transport are inclined to think that so long as the goods are carried, the cheapest way is as good as any;• it is for the contractors to show them that they are wrong, that punctual loading, quick delivery with properly maintained lorries and pleasant drivers, means more, in time and sales, than a saving in rate.

The best way to sell transport is to keep in touch with as many users as possible, and continually to approach them with offers of good service, rather than low rates. If the rates that the users pay at present be unprofitable, there is bound to be a change in time, which will give the haulier his chance.

It has not been possible to deal fully here with every point raised, but I have tried to express some views on the business which may not have occurred to many men who are naturally dissatisfied with the present , state of things. I feel sure that if these suggestions be considered carefully they will enable haulage contractors to give better service, look after customers' interests and in time create a goodwill which will withstand rate-cutting, and increase business. Unprofitable working cannot last for ever ; traffic must in time go to the sound firms who offer good service at a fair price.

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