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fleet Management Conference 1969

Report by lain Sherriff, John Darker and Ashley Taylor

NEARLY 400 delegates attended Commercial Motor's sixth Fleet Management Conference in Manchester on Thursday of last week. Before introducing Mr. Douglas Richards, president of the SM MT, who opened the conference (CM last week), Lord Chesham, the chairman, said that the theme of the conference, "The challenge of change", was particularly apt at a time when the industry was going through a period of immense change.

Papers were presented by Mr. E. T. Hunter. motor manager of the Zurich Group, Mr. J. M. Silbermann, managing director, Brent Group of Companies Ltd., Mr. J. H. Alden, chief engineer, Vauxhall Motors Ltd., Mr. W. W. Heubeck, managing director, Ulsterbus Ltd.. Mr. D. E. A. Pettit, chairman, SPD Ltd. In addition there was a dramatized version of an operator's licence application. This presentation proved particularly useful to the ownaccount sector of the industry; many from this sector were seeing the inside of a "traffic court" for the first time.

Delegates attended from all over Great Britain, Ulster and the Republic of Ireland. and were drawn from both the operating and manufacturing sides of the industry.

WHEN Mr. E. T. Hunter, motor manager, the Zurich Group, introduced his paper, "A realistic approach to fleet insurance", he was not afraid to be controversial—indeed, he praised Mrs. Barbara Castle for her stress on safety aspects and said he regretted her departure from the Ministry of Transport.

Mr. Hunter urged transport operators to look for insurance brokers who would give regular service and advice throughout the year. The values attaching to burglary or fire insurance changed, often quite rapidly, and the good broker would go through all the current policies with his client.

Road transport operators who shopped around for the cheapest possible fleet insurance were condemned by the speaker. "We at Zurich need to insure firms for a period of years to gain experience of claims. We do not pay much attention to the duplicated letters asking for quotations that some brokers send in annually," Mr. Hunter deplored the indifference of some road transport operators to safety aspects, in particular to the costs involved in insurance. Premium cost could be lowered if driving standards were improved, he said. Instancing a recent accident involving a lorry in East Anglia where a tractor driver was killed at 8 a.m. after the driver had driven to the Midlands and back on an excessively tight schedule, Mr. Hunter stressed that employers should not attempt to over-work their drivers with resultant hazards to other road users.

Welcoming the influence of Training Boards, and the LDoY competition in improving driving standards, Mr. Hunter said there were still too many transport operators who were uninterested in training. The likely introduction of 44-ton g.v,w. vehicles made sound driving training and high standards of vehicle design imperative.

Mr. A. R. Irvine, motor manager, Hogg Robinson and Gardner Mountain (UK) Ltd., asked whether cheaper premiums would be likely for Aand B-licence operators and possibly dearer premiums for C-licence operators choosing to operate for hire or reward. Mr. Hunter said it was hard to answer this question. His company insured fleets, and premiums depended on fleet experience. The premiums of Aand B-licence operators might improve if the operators complied with the Transport Act; C-licence transport operators who carried for others might have to pay more because of the greater mileages undertaken and the increased exposure to risk.

Mr. P. V. Connell, group transport manager, Alston's (Long Melford) Ltd., queried the possible reduction in fleet insurance rates if an excess of E250 or £500 for accidental damage were built into the policy. Mr. Hunter said it all depended on the insurer's experience of the fleet in question. In one fleet with f: 1 00 excess clause it was discovered that a 40 per cent reduction in premium could be given. He thought it was possible that with a £250 excess accident

damage provision the premiums might be lowered by about 15 per cent.

Mr. W. W. Heubeck, managing director, Ufsterbus Ltd., wanted to know whether it was possible for a company such as his to escape from the costly "knock-for-knock" principle. He felt that bus drivers, in general, were unduly penalized as regards insurance in contrast to other road users. Mr. Hunter said he rejected Mr. Heubeck's thesis. So many drivers told a good story! It might be that most bus fleet drivers were very safe but they operated in heavily populated areas. It was possible that the "knock-for-knock" agreement operated to the advantage of bus companies. After all, asked Mr. Hunter, if a bus collided with a Mini, who suffered most?

The "knock-for-knock" agreement, said the speaker, saved time and man-hours--hence money. "If you go it alone you need qualified insurance people to run the department." In his experience when you tried to recover from third parties involved in accident claims you were lucky to get one-third recovery. In any case, added MT. Hunter, a company running its own insurance would have to come to terms with other large organizations with whom it was frequently in contact. Over a period of time claims and counter claims evened out. He had no doubt that the "knockfor-knock" agreement saved money to all concerned in the long run.

Mr. J. W. Wilson, proprietor /partner, Cheshire Caravan Transport, asked whether insurance details should be furnished when operators applied for a goods vehicle licence. Was it helpful to provide the Licensing Authority with evidence of adequate cover? Mr. Hunter thought it would be a good idea if operators did submit evidence of proper cover in the circumstances.

Mr. Fred Hope, managing director, Self Energising Disc Brakes Ltd., asked Mr. Hunter whether he impressed upon vehicle manufacturers the need for first-class brakes. Much bigger brakes were needed in view of the demands imposed upon them. Mr. A. Williamson, assistant engineer, Vauxhall Motors Ltd., referred to a comment of Mr. Hunter concerning low kerb weight vehicles and lack of safety. Low kerb weight in Mr. Williamson's view was a measure of the efficiency of the designer. Vauxhall spent millions of pounds to ensure that components were always safe in operation, said Mr. Williamson, and in fact British commercial vehicle braking systems were better than those on comparable vehicles in Europe.

Mr. Hunter said he saw only the results of accidents. Vehicles might all be perfect, though he felt that manufacturers were not always as advanced as they could be. He gave the fitting of load-sensing valves to tractive units, as an example. Not all drivers were adequately trained.

Mr. J. R. Burrill, transport engineer, J. Sainsbury Ltd., asked whether driver training schemes resulted in improved accident records. Mr. Hunter said that enlightened transport operators who carried out intensive training certainly achieved better results with fewer accidents than other transport operators who discounted the value of training. His company's records indicated all too often that many transport employers took on drivers because they possessed a driving licence and claimed to have driven a particular type of vehicle.

"THE Road Transport Industry Training Board report on manpower in the industry makes startling reading," said Mr. J. M. Silbermann, managing director, Brent Group of Companies Ltd., introducing his paper -Marketing haulage". Out of a total of 215,000 people employed by public carriers only 275—or 0.1 per cent—were employed in selling haulage. "It's a wonder to me that we have any customers at all," he said. Under the present licensing system which had been in operation for 36 years, aggressive selling was regarded as illegal if not immoral—an attitude that was not a sensible commercial approach to business.

Mr. Silbermann pointed out that Ellisland University, Illinois, was now catering for the marketing aspect of transport by organizing an eight-day course on the subject. "While I do not think that we should follow blindly all that happens in the USA, they have been pioneers in commercial matters," he said. "There are valuable lessons to be learned here."

The introduction of operators' licensing he saw as an opportunity for carriers to introduce marketing into their business, in fact he considered it to be an essential part of the business.

Proper marketing meant that not only the needs of one's customer had to be satisfied but also the needs of the customer's customer. He illustrated the marketing techniques used by manufacturers of consumer goods who studied the requirements not only of the sales outlet but also of the eventual purchaser of the goods. He visualized difficulties in introducing the marketing concept, one of which was the deep-rooted conviction of own-account operators that their existing system was the best. The danger of own-account operation, in his opinion, was that it presented a false picture when compared with the public carrier in that many of the overheads of own-account operation were not taken into account when counting the cost and compiling the rate. He posed a series of questions to the delegates. Does the own-account operator know his true responsi

bilities or his true costs? Does he delegate too much authority and hope for the best? Does he hide away his overheads, albeit unintentionally?

Mr. Silbermann cautioned the own-account man not to let blind prejudice inhibit him. He suggested that if this type of operator was to take advantage of the new licensing system and carry goods for hire and reward then he must be prepared to become a public carrier with all that this would entail. He suggested that if the own-account man could not fully utilize his fleet he must be prepared to sell off, and hire vehicles from the public carrier.

Mr. Silbermann understood that in the eyes of some transport managers this would mean a diminishing of their authority, but said that in such circumstances these men would fill the role of a purchasing officer who would require to hire the type of transport best suited to their specific needs.

Mr. R. Cull, director, James Duke and Son Ltd., asked whether a customer hiring haulage should not in every case add in a proportion of his traffic-office costs to ascertain the true cost of the movement. Mr. Silbermann agreed that all relevant costs should be included, and stressed that the overheads should also be included in the cost of operating his own account operation was being influenced by by the shortage of vehicles available from public carriers. With this Mr. Silbermann

agreed. He suggested that while the credit squeeze may have had some bearing on this state of affairs it was more likely to have been created by the restrictive nature of the 1933 Act. -We have been in a straitjacket for 36 years," he said, "and while the Act may have been valid at the time, it is long out of date." The shortage, he considered, would now be short-lived.

Mr. H. R. Featherstone, director, Freight Transport Association, described Mr. Silbermann's presentation as both refreshing and aggressive. He thought it was incumbent on all types of operators and customers to take account of the new situation which would develop following the introduction of the 1968 Transport Act. While he accepted that some own-account men did not take all of their costs into consideration, he wondered if this was not also true of a number of public carriers. Turning to the marketing aspect, Mr. Featherstone asked if there was not a danger in marketing if the carrier was to tell his customer—the own-account man—that he didn't know what he was doing.

Mr. Silbermann pointed out that before a public carrier made any approach to a customer he should select a segment of the market in which he was prepared to specialize. Thereafter he should research that segment and having completed an accurate costing for the operations in that segment he could approach the customer knowledgeably. And beam his marketing campaign accordingly.

Mr. D. E. A. Pettit, chairman, SPD Ltd., while agreeing with Mr. Silbermann felt that he had not got to the crux of the matter. "You have to become intimately associated with the customer's marketing problems," he said. Mr. Pettit, suggesting that the carrier should be in at the early planning stage of the customer's marketing discussions, agreed that the carrier of today experienced great difficulty in getting beyond the physical side of the business. Marketing, he said, meant specialization in research. Mr. Silbermann agreed that the end need must be studied, but pointed out that he had said just this in his paper (CM last week), He warned the delegates against becoming too involved in their customers' forward planning. He had been embarrassed on one occasion when he had been invited by two customers to sit in on their planning meetings and discovered they were both preparing to market identical products. He suggested that too close an involvement meant living in the customer's pocket, and in his opinion this was almost a return to own-account operation. received by the buyer was discussed by Mr. J. H. Alden, chief engineer of Vauxhall Motors Ltd., who quoted extensively from Vauxhall practice and also commented on the industry's approach to this subject in general. He made special reference to his factory's new 750-acre test ground and to its value in future development work. To a certain extent research must be influenced by the troubleshooting element, he said, as the knowledge of current vehicle behaviour was an essential aspect in assessing the overall situation. Considerable time must inevitably elapse between the evaluation of a component and its incorporation in the final product.

Mr. Alden's presentation, based on coloured slides, was liberally illustrated by examples of current automotive research practice. Of particular interest were his references to various possibilities for development in the future. He felt that it would make good sense for tractive units to be four-wheel driven. Another design that might have considerable potential provided for the employment of two pannier-mounted engines which would place the weight where it was wanted, in the centre of the chassis. One could be used when running light. Mr. Alden said there was a Jot still to be learnt on

turbines, a subject on which their parent company had been working closely.

The commercial driver spent his life in a steel box where normally the noise level was too high. The industry needed to study the driver's comfort, which was not necessarily the same as producing an attractive appearance. Battery-driven vehicles had the disadvantage of a disproportionately high weight but held out certain possibilities for the future. Self-coloured plastics panels offered useful scope for design.

To achieve large capacity in a truck one might have a very low tractive unit of much the same proportions as a minicar, located beneath the forward part of the semi-trailer body. This could well give a 15-metre length for the load, a 2.5-metre width and a capacity of 38 long tons.

They were already carrying out such trials as the cab impact test which had been devised to meet the Swedish regulations. This necessitated a 1-ton weight being dropped on the cab. The result had been production of a strong cab which entailed considerable extra cost. In their general testing Vauxhall, among others, used the Belgian pave track at MIRA and it could be considered that 1,000 such track miles equalled 100,000 miles on hard-top roads. The final assessment of a vehicle must, of course, be under actual working conditions in the hands of operators including, if appropriate, site work.

Vauxhall employ 1,700 people in the engineering products department, these including 400 engineers and 360 draughtsmen. They were a British commercial vehicle design team that created and developed their own all-British vehicles. The department has used up to a total of 7m sq. ft. of paper a year and had now adopted extensive use of microfilming. When the design for a product was blessed by the product committee, actual production might still be three, four or five years away. First of all, advance design was taken to the point of approval already mentioned, in the next phase the approved products went into continuous development and finally there was further development and improvement to components oi models continuing in production.

In any good engineeririg organization it was necessary to have a separate experimental test audit section that would provide a check on the enthusiasms that might possess the main development department. In all this work, seeing was believing and an early need was to obtain experience on the road. When testing on the highway the endeavour was to make prototypes as close as possible in appearance to some current models. At the outset a mock-up was employed to check positions and accessibility of the cab. Mr. Alden quoted one version of which 18 prototypes were built at the beginning for assessment.

They were naturally extremely conscious of the importance of braking systems and rigs were employed to reproduce all the wear factors. Nevertheless, it was once again necessary to perform the fullest testing on the highways. An optics laboratory was needed to ensure that all vehicles compared with worldwide regulations in relation to lighting and associated problems.

A principal preoccupation at Vauxhall now was to provide good accessibility to components, and this was getting really intensive design attention. One of the future design possibilities illustrated by Mr. Alden reflected this approach—a platform lorry with an underfloor engine ahead of the rear axle, the whole power unit/axle assembly being designed to be "wheeled out" from under the chassis if necessary, but offering good accessibility in situ.

He concluded by stressing the importance not only of attracting young people into the industry but of giving them an early chance to show their capabilities. Too often youthful enthusiasm had been frustrated by employment on dull tasks designed to broaden experience. Vauxhall was now putting engineers straight from university onto design and development work, with encouraging results.

TO GIVE DELEGATES—and especially own-account operators not familiar with traffic courts—an idea of the procedures likely to be adopted in disputed applications for operators' licences, a simulated application was staged in the conference hall.

The fictitious application was to vary an operator's licence by adding 25 vehicles not exceeding 16 tons gross, to be operated from a new base, some 50 miles away from the main operating centre but in the same traffic area. The applicant was an own-account operator running 30 vehicles carrying its own traffic, and 10 32-ton-gross artics still specified on a B licence and carrying for the applicant company but also for other named companies.

The applicant was Proposing to branch out into general haulage (for which the new vehicles were required) but, having no maintenance facilities at the new base; was proposing to contract this out to a local garage.

An objection from the trade union regional office was based on the fact that this garage was not equipped to undertake such maintenance, and that in any case the applicant company had persisently refused to employ skilled fitters in its main base.

Two new directors, to run the haulage side, were to be employed, and this had been notified to the "Licensing Authority". The county police had lodged an objection on the grounds that these two men had a long record of very bad vehicle operation as hauliers, and were therefore not fit and proper persons to be involved in the management of the business, At the "public hearing", the applicant's advocate tried to show that the union objection was motivated by malice, following failure to secure a closed union shop at the main base, and that the police were similarly biased through failure to secure conviction against the two new directors in a criminal case.

An Interesting point emerged when the union representative urged the LA to have the contract-maintenance motor trade premises investigated by his inspectors. The LA said he had no powers to inspect commercial motor trade premises, but only those from which vehicles were operated by holders of operators' or carriers' licences.

The police witness produced a list of vehicle-condition and driving-hours offences for which the two new directors had been convicted in the former haulage business, though it was established that the actual applicant company had a clean record.

The "Licensing Authority" was concerned about the two new directors, whose past conduct was well known to him, though he felt that the naming of a licensed transport manager other than these two' men, at the new base, might go some way to meeting the situation. But he adjourned the application to give the applicant a chance to bring the two directors into court for examination, and also to enable a witness from the contract-maintenance garage to give evidence as to the facilities for maintaining commercial vehicles under the proposed contract.

The presentation was undertaken by INI Players, to a script written by CM staff.

Accepting a spontaneous invitation to comment on the presentation, Mr. Charles Hodgson, North Western Licensing Authority (a guest at the conference) praised it for its realism and competence. It had, he thought, brought out some points which he had not fully appreciated before and it was particularly timely since he was taking the chair at a meeting of the Licensing Authorities the following week.

Mr. Hodgson thanked Commercial Motor for "telling me what I shall be doing next year"; he remarked later that the decision given in the case was exactly the one he would have given in the circumstances.

(Other points made by Mr. Hodgson appear on page 29).

IN the session devoted to management views of productivity schemes, the presentation of papers by Mr. D. E. A. Pettit, chairman of SPD Ltd., and Mr. W. Heubeck, managing director of Ulsterbus Ltd., was followed by a joint question period in which the two speakers were joined by Mr. D. Murch, SPD's personnel manager.

Mr. Pettit enlivened the introduction of his paper, "Productivity in freight transport: the SPD scheme," with many quips and witticisms but he spoke with marked humility. Productivity bargaining provided no talisman for good labour relations or for maximum efficiency of operations, said Mr. Pettit. He approached the subject with optimistic caution—a very recent minor stoppage of work at a small SPD depot reminded him of the maxim "Physician, heal thyself".

Warning operators that it was not possible successfully to "carve chunks" out of other people's productivity schemes, Mr. Pettit contrasted the change since Adam Smith had urged "more workers and a better division of labour". Today, technical considerations and the inter-relationship of people and capital equipment were major considerations, within the background of the Government's "Queensberry Rules".

Progress in achieving improved productivity was possible, said Mr. Pettit, so long as people felt themselves to be involved. Management must enjoy extensive workmeasurement techniques before introducing a scheme, not forgetting the importance of consultative machinery. It was necessary to look at traditional consultative procedure periodically—there was a tendency for barnacles to grow on it!

SPD had found it possible progressively to reduce hours of work of drivers, allowing them to go home after their measured task had been completed. Usually, the drivers completed their work quota about two hours ahead of time; when the hours were 531 they completed them in around 51 and when total work time was 50; the work was done in 48. There was a chance to develop the trend in anticipation of a 37 t-hour working week, or shift-work systems, or a rolling four-day week, or whatever.

Mr. Pettit stressed that market research should be undertaken in advance of a productivity scheme because of changing factors in distribution. It was also vital to secure the full participation of national officers of trade unions. The unions must commit themselves to agreed company objectives, and local management must be involved in the discussions, not least because of the importance of good communications. Concluding, Mr. Pettit said he felt SPD had squeezed most of the possible benefits from old forms of productivity planning. A "total" approach was now called for and much thought was being given to planning the next advance, relating input across the whole field of deployed resources with rewards for the staff and management employed.

Mr. Heubeck, in a very forthright address, said that productivity schemes as at present constituted were based on a fallacy, and in a sense were only storing up trouble for the future. The basic problem was that there was unjustifiable wage disparity between groups of workers, even in the sbme industry, which did not reflect the contributions the men made to the national effort. He instanced tanker drivers receiving £30 or perhaps £40 a week, while his Ulsterbus drivers, even under the productivity agreement and with merit pay, would not reach £20 basic until 1971—yet their work was as valuable.

Professional managers in this country had, he said, been belaboured by politicians and economists for too long without protesting; now it was time to answer back. If, as he believed, Britain was now the sick man of Europe, the managers were not the ones to blame.

Mr. Heubeck was scathing about some of the shortcomings of trade unions. One Union that was vociferous about its democratic methods was in practice seldom democratic at alt. Decisions affecting the working future of many employees were commonly taken by a small group of shop stewards, and the men's representatives seldom had the ability to understand the financial and other aspects of detailed agreements. Failure to understand could lead to precipitate action when the reply to the question "How much?" did not come up to expectations.

He felt that, however reluctantly, managers were justified in acting unethically on occasions when they knew that to do so was the only way of getting progress that would benefit both the company and the staff.

Discussion time was lively. Mr. J. H. Le Pla, general distribution manager, T. Wall and Sons lice Cream) Ltd., asked Mr. Pettit whether it was possible to get a simple measure of productivity which did not inhibit flexibility. Also, if sectional bargaining had succeeded depot bargaining was it not better to move in the direction of group bargaining?

Mr. Pettit said SPD was not at all interested in individual incentive arrangements for staff. There was some sectional bargaining and he felt the next step was towards group bargaining offering high basics. He had not mentioned the clerical side in his address but SPD had thought that clerical staff would be catered for by a separate scheme as data processing was progressively introduced into the organization. In fact, 500 clerical staff had been saved since 1963 and what was now looked for was an overall reward yielding high management salaries with a parallel scheme for clerical staffs.

Continuing, Mr. Pettit said many formulae were being looked at here and abroad. There were value-added and global-surplus schemes and SPD—and others—might eventually move in this direction.

Mr. J. G. Dudley, director, David Rees and Co. Ltd., wanted Mr. Pettit to define the basic factors concerning productivity in small firms. If productivity was achieved was this not simply a matter of "putting our house in order? If we put our house in order is not the field of productivity to that extent diminished? Should not smaller firms be content to seek efficiency and profitability?'

Mr. Pettit said management self-criticism was always called for. Many of his depot managers were excellent, but some were indifferent. Perfection was never achieved but there was room for manoeuvre in a changing environment. SPD had built a marvellous post-war depot distribution system at a cost of some £10m, but its whole basis was changed by revolutionary changes in retail distribution, the building of motorways, more stress on direct deliveries and so on. New levels of achievement were opened and there was the possibility of improved organization.

As regards the most efficient depot size, Mr. Pettit went on, SPD did not know the answer. The scale economy problem was a difficult one. Much depended on the size of the community served—several small depots might be better than a single large depot. He felt that against the pressures of Govemment legislation small companies had not much of a future. They could not solve the problem of capital-intensive operation while remaining small companies.

Mr. Barry Wild, managing director, Harold Wood and Sons Ltd., queried how far trading accounts should be available to staff at productivity discussions.

Mr. Heubeck thought everything should be revealed. Mr. Pettit thought the figures should be made available in considerable detail in so far as the staff representatives could understand them. But it was no use providing staff with figures in advance if this served to provide them with a stick to beat the management. In SPD, wages as a proportion of total cost had fallen from 28.9 to 26.5 per cent between 1960 and 1968, a sign of effectiveness of the productivity approach, though in this period wage rates had increased by over 100 per cent. It should be borne in mind that the Workers' share of productivity gains should not be more than 30 per cent; the company needed its share and there was some hope that the consumer would also benefit in terms of a cheaper or better product.

Closing the conference, Lord Chesham revealed that next year's Fleet Management Conference would be held at the London Hilton Hotel on September 17.