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Competition through 0-licensing is having serious effect

2nd June 1972, Page 31
2nd June 1972
Page 31
Page 31, 2nd June 1972 — Competition through 0-licensing is having serious effect
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Which of the following most accurately describes the problem?

• The competition introduced by the new operators' licences had had a Serious effect on the road haulage industry and would obviously play a large part in shaping its future, the Institute of Traffic Administration annual conference was told on May 20. As recorded briefly in CM last week, the past, present and future state of road haulage was reviewed by Mr L. P. Walsh, chairman and managing director of Amey Transport Ltd, and it was Mr Walsh who told delegates about the effects of 0-licensing.

Competition, he said, had arisen from completely freeing the lighter vehicle, removing the limitations imposed on former 13 licences, setting aside the established normal users of A licences and allowing own-account operators to carry without restriction for hire or reward. Despite grave misgivings, the own-account operators had provided less competition to general haulage than others, but they had made serious inroads in the distribution field and in some cases had been able to quote low rates with which the haulier could not economically compete.

This low-rate facility resulted from the down-turn in trade and Mr Walsh wondered whether, with a return to more normal trading conditions, manufacturers would wish to remain in the haulage field, possibly needing extra vehicles to do so and increasing their operational problems.

Small-vehicle challenge He thought that freeing the small vehicles, some of which could carry up to 2 tons, had had a greater impact than was generally realized. Smalls, parcels, distribution and household removals had felt the pinch and it was significant that a decline in small-vehicle registrations from 1965 to 1967 had been followed by a jump in /l--ton new registrations from 474,000 in 1967 to 643.000 in 1970.

Road haulage in Britain reached its lowest ebb in 1971, said Mr Walsh, but he saw the "revolutionary decade" of 1968-78 as not only the most difficult but also the most challenging and rewarding that the industry would have known, The demand for road haulage in 1972 had remained low, and he thought that although the Budget measures would help to boost the economy it would be mid-1973 or even early 1974 before hauliers reached their 1968 level of activity. This was after making due allowance for traffic permanently lost through increased competition and for our entry into the Common Market.

Mr Walsh said the 1968 Transport Act had led to a constant exhortation that the industry must become more "professional" and strive for profit. He found this puzzling, with its implication that hauliers, who generally worked long and hard, were a slap-happy lot with little regard for the ultimate purpose of business. The description hardly fitted an industry which had grown to carry 40 per cent of the nation's goods and had doubled its productivity in terms of ton-miles per employee over the past 15 years.

It was the market that determined managerial efficiency and not the reverse. A managerial genius could not overcome a basic deficiency of the market open to him. It was the ability to take advantage of a changing market that would decide the progression or otherwise of the business.

Too little enforcement Turning to the influence of the EEC on road transport, Mr Walsh said that the apparently minimal or non-existent enforcement of road transport legislation on the Continent could, if allowed to continue, put the British haulier at a serious disadvantage on transport costs.

With France and Germany so deeply committed to railway protection, he saw Holland as our future running partner in shaping the pattern for road transport. Fulfilment of the declared concept of freedom for surface transport was, he said, lagging considerably behind other sectors of EEC policy and he wondered whether the old 'road v rail battles were being fought all over again behind the scenes.

Mr Walsh said that the EEC's proposals for controlling road transport would mean stringent entry standards for new operators. Established hauliers would have to obtain licences for all vehicles of over 3 tons capacity. Licences would be granted in terms of overall carrying capacity and there would be four classes of operation — local work up to 50 km radius; zone A, up to 200 km radius; zone B, national; and international transport.

Own-account transport would be governed very much on the old C-licence lines..

Mr Walsh said that the UK Government, the CBI and the FTA wanted EEC policy to be much more liberal than this, but road hauliers, spearheaded by the RHA, favoured a return to greater control. He wondered how much this latter decision had been coloured by recent experience. Given a buoyant economy with the elasticity of being able to meet increased demand, as against the old system, could well have outweighed newly created competition. But, warned Mr Walsh, there was still an excess of transport capacity in Britain and there was no evidence that hauliers on the Continent were under pressure.


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