Transport and warehousing: some current problems
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Should warehousing associations combine?
How disastrous has the Dock Labour Scheme been? Have warehousemen had a fair return on training levies?
THERE seems to be general agreement in road transport circles that warehousing is important and will become a vital factor in transport efficiency in the 70s. The number of firms who are solely engaged in the warehousing function is, I suspect, falling. Conversely, many firms that began in warehousing now operate their own transport fleet as part of their service to customers. The location of warehouses is important and the trend away from congested port areas to more convenient inland centres, close to large population centres, is likely to grow—though this is not to say that some new, well-designed purpose-built warehouses will not be built in the vicinity of ports to replace the ancient multi-storey brick warehouses that have long ceased to be economic.
The dividing line between warehousing and road transport is for fairly obvious reasons—not easily drawn. The smaller firms, particularly, interchange staff from one function to another without giving a thought to the consequences. A few years ago this would not have mattered but today —to quote only one instance—warehousing employers may be faced with formidable documents to complete for census purposes or to claim training grants from one or other of the Training Boards. At the recent Bournemouth conference of the National Association of Warehouse Keepers, this point came out in discussions about the incidence of the levy paid to the Road Transport Industry Training Board.
Some members of the NAWK are also Road Haulage Association members. Mr. Philip Packham, well known in both camps, hinted at the recent conference that the two associations should get closer together, not least because of difficulties arising over warehousing conditions— offering customers protection at the rate of £20 per ton in contrast to the £800 per ton applicable with the standard RHA and BRS conditions of carriage for goods in transit.
3issatisfied customers It was evident that a number of large customers of the warehouse keepers were dissatisfied with the lower liability and sought special terms for their products in storage. The general consensus of opinion was that warehousemen would be unwise to make any moves to extend the value of the standard cover provided. Just as road hauliers are sometimes pestered by "paper" claims because of clerical errors in recording inwards or outwards movements so warehousemen are certainly "taken for a ride" on occasion. When profit per ton per week may be as little as 6d it is clear that the warehousemen's attitude to increasing their liability is understandable. Equally, customers—in the perverse way they have —are not concerned with the low profitability of warehousemen, merely concerned for the safe custody of their goods on reasonable commercial terms.
Labour relations obtrude at every conference involving transport today. At Bournemouth the warehouse keepers are not likely to forget an after-dinner speech by Sir David Burnett, chairman of Hays Wharf Ltd. and a member of the Port of London Authority. Sir David hit out shrewdly and vigorously in many directions. He was concerned at the steady deterioration in labour relations in the port of London since de-casualization in 1967. This had been glossed over by people on both sides of the industry who feared trade might be driven away if the full truth were made known. He had little time for the dock labour scheme and those administering it—employers and trade unions—because of a too-rigid policy. Some employers were left with an excessive labour force whilst other employers cried out for men. However outrageous a decision of a dock labour board there was no appeal against it because of the phrasing of the constitution. There had been a signal failure of employer-members of the Board, said Sir David. They showed no cohesion and were at sixes and sevens— much too concerned with sectional interests.
As to the trade unions, there was an endless desire to make the scheme work, with many prolonged meetings. Some union leaders showed "implacable pig-headedness —bureaucracy gone made". They reminded Sir David of the German General Staff in their narrow attitudes, being both stupid and industrious. "Add a touch of spite and you see Why the London Dock Labour Scheme has been a disaster."
All this added up a discontented labourforce with too many surplus men and fast-rising costs. Some 15 large public wharfingers on the Thames had closed down and six timber wharves had ceased to operate; St. Katharine Dock and the Surrey Commercial Dock had closed. But some employers were taking constructive action, building four new cold stores near London and many inland warehouses near population centres where mechanical sorting, weighing and blending, and efficient distribution services by road were featured, In one such new warehouse, four men received and warehoused 495 tons of goods in one day with nothing unusual in the form of mechanical aids. Export packing warehouses were another development.
Sir David drew attention to the conflict between road transport and port workers within the Transport and General Workers' Union. He was concerned lest the bad labour relations persisting for so long in the London docks should be spread to the inland warehouses established within recent years. It was monstrous, he said, that the London dock employers should take it upon themselves to extend the operation of the London Dock Labour Scheme to inland warehouses. Ingenious and ambiguous wording of recent agreements could perpetuate labour unrest with nationwide repercussions, said Sir David with emphasis.
Take-over trail What was the remedy?: "I urge the National Association of Warehouse ,Keepers to demand from the Department of Employment and Productivity full consultation on what is going on. The unions have the bit between their teeth. Employers who are not aware of what is going on will be picked off one by one." He continued: "There are at least 12 associations dealing with public storage. Your association should get on the takeover trail. We never again want to experience a situation when a body of employers enters into direct negotiations with the DEP and the unions without direct negotiation with the trade associations concerned. There is a real risk that the stranglehold grip of the Dock Labour scheme will be extended. . . The avowed aim of the TGWU is to get a grip on the warehouse and transport industry.
I have taken the opportunity to discuss with Mr. Ken Jackson, the national secretary of the commercial services group of the TGWU, the gist of Sir David's remarks. Mr. Jackson conceded that there had been some internal conflicts between port and road haulage members of the union but said certain wild statements given some press publicity in the middle of a dispute should not be taken seriously. He expressed no qualms about the influence of dock workers extending to inland terminals, when "inland" meant places a long way from ports.
Mindful of a recent Prices and Incomes Board suggestion that labour relations were a key function of modern trade associations I was interested to learn the reactions of NAWK members to Sir David Burnett's speech—after a night's sleep. His suggestion that the take-over trail should be followed met with a negative response. In a combined association each sectional interest would go its own way, it was felt. Port warehouse keepers dealt with the trade unions. Most NAWK memberfirms had never done so. What would be the advantage of a combined body? Expensive headquarters and a highly paid director-general would be needed. When the "Dry", "Cold Store" and Household Removers got together to form a combined trade association in the United States members were worse off than before, it was stated.
Some members of NAWK suggested frankly that size was not necessarily a benefit. There was even an unkind reference to self-interested concerns. One member whose firm was in membership with almost all the warehousing associations said a major link-up would increase labour relations problems in the industry. A single heretical voice wondered whether it was a source of strength to ignore labour matters; what had originally been predominantly a bulk storage organization had turned into one for storage and distribution, with the road transport side of growing importance. "We're nearer to parts of the RHA. If the association is to go forward these questions must be faced."
To conclude, some of the questions NAWK members put to Mr. T. E. Tindall, the RTITB's director-general, may be of interest.
Said one prominent warehouseman: "We feel we've had a raw deal in our industry. In road haulage for every £1 in grants about £2 has been collected in levy. We in warehousing have collected only about lOs or 15s for every £2 we've paid in levy. Only 10 people from our industry have been for a course at Motec. By next March another 10 men may have gone for
training, making only 20 Motec students from warehousing in the three years since the RTITB was established. Surely a differential levy would be fairer?"
Replied Mr. Tindall: "One or two figures are off the line. I wouldn't accept that we've only paid back ,E1 for every £2 collected. The annual report of the Board records a historical situation because it is prepared in March and presented to the House of Commons in September. About nine months elapses before there is any publicity; hence much depends upon the time at which you do your sums. At some time in the cycle we have paid back nearly everything. We are now paying back 80 to 90 per cent.
"As regards courses at Motec, the only one yet open commenced operations about a year ago. I'd argue that warehousing has had more than its share, for the provision in capital terms has been out of all proportion to the size of the industry or to its levy contribution.
"The total industry position is allimportant. If only 20 operatives have been trained this represents 1 per cent of your labour force. If we'd had 1 per cent of other sections of the industry we'd have done more than we have done. Motecs will set standards and allow experiments to be done. It is a 'missionary' activity."
Selling training To this a member rejoined: If we are now to return to our firms as hot gospellers for training what advice shall we give to our directors?
Said Mr. Tindall: "Training can be 'sold' on two counts: a basic argument is that management is often moved by the grant/levy scheme. Allowing for the initial costs of training, subsequent operations may be much more efficient and economical. The big question is whether youll run efficiently in five or 10 years' time. Training is not the only factor. Management may say that training problems have been coped with in the past— people learn anyway. But is 'learning any way' the most economic way?"
Mr. Tindall gave one useful tip when he described a road haulage firm where there had been a blameworthy accident every 8,000 miles. After a one-week course for drivers, costing £60 to £80 per driver, in the first year after the training there were no blameworthy accidents. "There were enormous savings," said Mr. Tindall, "with reduced insurance premiums and enhanced customer goodwill. Alas, the scheme was so successful that the firm concerned stopped doing it!"
Another probing question suggested that the highest operative skill in the warehousing trade was that of fork-lift truck drivers. Compared with the cost of lorries worth perhaps £20,000 it seemed odd that the warehousemen should be urged to produce programmes to meet an excessively high levy rate. Why not drop the levy rate?
Mr. Tindall accepted that there was some confusion between the road transport and warehousing side in terms of demarcation. Some warehousing costs were buried in the road haulage figures. But the levy was not supposed to cover the total training cost. "If we made a complete cost recovery, levy would be twice what it is—and unacceptable to the industry." Equally, grants were not intended to repay all the expenses incurred by employers for training.
He promised that the Board would look at training costs each year to see how costs varied in different sectors of the industry. Some aspects of training, such as lorrydriver training, could be costed to a pound or two. Management training costs might vary for warehousemen, road hauliers or garage concerns. "If we could predict the future of the industry accurately we could all retire to the stock exchange and let you off the levy altogether!" joked Mr. Tindall. As regards the cost of Motec, it would be a difficult accountancy exercise to split costs for sections of the industry but this would be attempted and he hoped the figures would be published.