Why Use Clearing Houses?
Page 27
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A Well-known London Operator Sees Little Value in Clearing Houses and Points to What He Regards as Their Deficiencies
By Richard A. Pierson, mririZt Pierson By
Ministry of War Transport's new scheme has caused consternation.in the ranks of the clearing houses, but so far as the operators are concerned the less traffic passing through clearing houses the better for the transport, community as a whole.
The passing of the Road and Rail Traffic Act in 1933 was the haulage contractors' charter and, generally., its operation has been very satisfactory and hauliers were beginning to feel the benefit of it just previously to the outbreak of hostilities. The railways offered a certain amount of resistance to the progress of road transport, but all that has now been abandoned. We are now all working with the same object in view. The prime reason given for the Minister's .decision to control transport was for the prosecution of the war and the saving of man-power, fuel, tyres and other incidental equipment which is in short supply in war-time.
Practically the whole of the work now moving is in connection with Government schemes and fuel is granted to operators only where the work is of an essential nature. The operators do not require a variety of third parties to handle the orders; they think it makes only for congestion. This was conclusively proved by the emergency Pools, which operated in the various ports and administered the work very ably, expediting the deliveries at considerably' less cost than clearing houses.
It is, . obviously, ridiculous in war-time for towns to carry clearing houses which are in competition with one another, particularly as these, in some cases, amount to as many as 20 firms, The appointmene by the Government of one vehicle operator, or official, to handle all the traffic emanating from any one town or area would, go far towards ending the chaos which is caused by clearing houses competing against each other for the business, and controlled undertakings will achieve this.
Small Hauliers Have Lived In Spite of Clearing Houses
Our learned friend S.T.R. recently mentioned that many small contractors were able to live only by the support given to them by clearing houses, but it would be, much truer to say thatmany small haulage contractors have lived in spite of clearing houses.
An operator has always been at the mercy of the disgruntled transport man who has been working with his firm and getting to know the customers. He subsequently falls out with that firm, has no chance of obtaining an operator's licence and needs only a few pounds to start as a clearing house. There is nothing to stop him from advertising long-distance haulage and users are often 'unaware that the clearing house has no transport. In this 'way another competitor and potential rate-cutter is born.
Where rates are being quoted at 40s. per ton the clearing houses stand to get 4s. per Ion.commission, which means . that operators are gettigg a net rate of 36s. If the clearing houses decide to cut the rates by 2s. fid. they lose only 3d., but the operator loses 2s. 3d. This may mean a difference between profit and loss on the return load. In peace-time many operators 'preferred to run empty rather than to accept rates which were uneconomic. One has only to remember the serious decline in rates, to an uneconomic level,, for tomatoes, potatoes'and tinned plate when being moved from Wales to the sbuth-west ports oetore the war. Clearing houses were competing wItri each other for the traffic and this cutting steadily went on until .one. or other secured the order, after which a mad scramble ensued to get contractors to 'handle the traffic. S.T.R. would find it difficult to explain how it could be 'handled at the rates generally allowed.
Clearing houses flourish only where commodities of a low-rated character are available and it is th.is very traffic which required that the contractor should get as much as he could to cover his costs. Some measure of control, by the Regional Transport Commissioners would result in contractors getting a fair price for the work they do without having to pay 10 per cent. to an outsider. Furthermore,in a few years, the standard of vehicles and maintenance would be greatly improved, thus providing a very fine unit should war ever come again to this island.
Clearing houses generally have to offer transport over which they have no control and, in many cases, they tout for their work and then tout for operators to carry the work they have managed to get by cutting the rates.
If clearing houses want to exist in the new order of things they should be controlled by a fixed schedule of rates throughout the country and any kustomers that they introduced should be charged at a fixel. rate, entitling the. clearing house to commission upon the order, although 19 per cent. is*far too much. Booking agents for passenger road transport were appointed by the operators and worked on a nominal commission of 5 per cent, of rates fixed by the operators, not the agents.
Hangers-on With No Interest in Transport Operations The industry generally has had to suffer many vicissitudes and it does not want a lot of people hanging on to it who have to interest in the operations of transport beyond keeping an eye on how much they can get out of it in the shortest possible time. Clearing houses generally are dealing with transport of which they have no direct knowledge or control and they are entirely dependent upon the operators to get them out of their .troubles. Unfortunately, the operator always suffers the blame and is often unaware that he is being blamed undeservedly.
With the advent of the lorry charter and the Road Haulage Wages Board, the industry assumed the status of a profession, which is All 'able to look after itself, and the small operators who have been dependent on clearing houses in the past would be well advised to get into touch with a reputable contractor owning vehicles, where a mutual aid society may be formed. There are often many reasons why a vehicle is unable to be available at a given time. If a small vehicle owner be working for a larger contractor, users may be covered by another vehicle and the practical advice and help which the larger contractors generally give to their smaller contractors, without charge minimizes and localizes the failures.
The smaller contractor who wishes to have a cash advance from a clearing house has to pay 2-i per cent, per month for the privilege, which means he is paying 30 per cent, per annum. The authentic contractor invariably makes an advance and makes no charge for it.
— The conditions applied by clearing houses are usually most onerous and if, by any chance, the contractor lays himself open to any one of the many claims for which he is liable in accepting the work, he finds not only that he loses the price of the job but he is involved in a far more serious loss which his insurance company will not stand.
Some clearing houses, in addition to a schedule of conditions, make drivers sign that " the rate given is Accepted by the driver on behalf of his arm" and this is pencilled right across the confirmation notes.
At a meeting attended by several of the biggest longdistance ,contractors in the country to discuss the carriage of abnormal loads, a resolution was passed urging that the Government Departments concerned should be asked to arrange that the traffic controlled by the Departments should not be passed to clearing houSes to the detriment of vehicles -engaged by haulage contractors who have equipped vehicles for the class of work under discussion_ If such Departments and other users could be persuaded to adopt this policy contractors would be on the way to removing a source of contention and unhelpful influence from outside the industry.