WHEN HIRE COMPETITION IS KEEN.
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Many a Garage Proprietor Who Goes in for Haulage Work is Thinking of Giving It Up Because He Imagines It Does Not Pay Now
By " Vim."
" IHAVE decided to put both -my lorries up for auction next month," said the proprietor of a garage to rfle recently. "Prices. are being so cut that there is nothing in haulage now, except the worry ; and in any case we don't. get enough jobs to keep the men busy." Observe the soon-say-die state of mind into which seine people slip directly they are faced with a little competition,
happen to know _something about this garage proprietor's circumstances, and am quite positive that he will he making a lotig mistake if he clears out of the haulage side of the trade for the reasons which he gave me. That an agent foreommercial vehicle.e should arrive at the conclusion that to run hire lorries in competition with his customers was bad policy could be understandable-; but that the owner of a public garage who possesses no such agencies should throw up the sponge the moment appearances begin to go against him is not so-easily understood. So, with the object of heartening, if possible, other traders who may be despairing in circumstances not very different from 1 hose of our .friend abovementioned, let us try to unravel the facts.
He acquired his brace of lorries towards the end of the war BO as to be able to Undertake a contract
• which was offered him at a remunerative price. When the war unofficially ended with the declaration of armistice, all war contracts did not ; and so, instead of finding himself with idle vehicles on his hands, he continued to fetch and carry loads for the construction of a perfectly useless factory, which is now a white elephant of the most elephantine proportions' Soon after the awakening of officialdom to the true state of affairs, Dr. Addison appeared with his housing scheme. The small town, where lives our friend, rose to the occasion by laying out a new and model town, which`bicls fair to become a ft mate for the white elephant aforesaid. Anyway, haulage work was still to be had at good prices for the asking, with the ratepayers to foot the bill.
Work That Came Without Looking for It.
Then came a horrid change in things. Building schemes in general, and this one in particular, underwent revision. The two lorries, deprived of their stock work, were often at a loose end. However, there was still a good deal of private cartage to be done in the district, and as there was nobody else owning three-tonners within miles, jobs of one kind or another flowed in steadily and kept these vehicles on the run most days.
Finally, came a time when lorry-owning competitors entered the arena. Shortly afterwards the supply of hire vehicles in the neighbourhood exceeded the loads available at tke old prices. Thereupon, rates were cut by those competitors, and the owner of the garage discovered that he must either accept from XI to 30s. per day less for his lorries or lose the jobs ; and even at the reduced prices jobs did not come in of their own accord. Hence, as they say, "the Pyramids"' hence, in other words, our friend's conclusion that he may as well sell his lorries as go on losing money over them.
The truth of the matter is that hitherto life as a hire vehicle owner has been too easy for him. When he was getting fat prices he knew that they paid him
handsomely, but I am sure that he does not know now whether the lower prices ruling to-day mean a bias to him, because he keeps no proper records of his running costs. The wages he pays his drivers are substantially the same as they used to be, land the general impression he gets amidst the rush and tear of his ordinary garage business is that in the main expenses have not come down a lot. On the other band, he does know for certain that earnings, even when his lorries are employed, are much below what they were, and so, without bothering to go into figures, it is quite plain--to him, at any rate—that hiring does not pay these days.
Careful Costing and Refusal of Unprofitable Contracts.
In thinking this, he is, of course, fundamentally wrong. Hiring does pay still, only not at a rate which permits of carelessness in keeping track of costs. The margin is finer than it was, that is all. It is not possible at the present time to be extravagant and make a profit ; but, low as prices are in some neighbourhoods, they usually offer a reasonable return ort capital, assuming that running expenses are looked after with scrupulous Care. And where those prices are obviously cut by competition below the point of reasonable profitableness, any hirer who, like a garage proprietor, has other sources of income, would be well advised to put his vehicles away for a bit, for nothing is more certain than that either the cutters will go bankrupt or that they will be obliged to increase their charges. As to the apparent dearth of work, I fear that our garage proprietor fails to realize that orders for haulage require to be sought with as mach diligence as orders for new cars. The fact that jobs have ceased to flow in automatically does not prove that there are no jobs, but only that the people who are offering them are free to pick and choose. The hirer has to "go out" after orders instead of leaving it to a junior clerk to book them down as they are brought into his office. He has to advertise, to circularize, and to make personal calls on those who are likely to be placing out haulage contracts.
That is why I think that the garage proprietor to whom I have referred gave me poor reasons for selling his two lorries. If he had said that the other part of his business occupied all hia time, or that he wanted the room that. the vehicles occupy, I should have agreed that he was doing a wise thing in knocking them down to the highest bidder. But when, as the case is, he has both the time and the room, I have with regret to disagree with hie decision. What he ought to do is to take hold of the haulage department with both hands, ascertain his actual running costs, compare them with the valuable costs data which have appeared and are appearing in this journal, eliminate all inefficiency, and definitely settle the minimum hire rates that he can accept. After this has been accomplished, he should "buzz round" after orders, odds and ends of jobs besides contracts, and put into his canvassing as much enthusiasm as he gives to repairing his customers' care. Then he will be buying more lorries instead of selling those he has.