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BRSL gets go-ahead for 5 per cent rates rise

15th June 1973, Page 26
15th June 1973
Page 26
Page 26, 15th June 1973 — BRSL gets go-ahead for 5 per cent rates rise
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Other State-owned companies still in the queue for increases

by CM reporter

• After protracted discussions, the Price Commission this week gave British Road Services Ltd its approval for an average increase of 5 per cent "on road haulage and related services on account of higher operating costs". The Price Commission stated that most of the charges would be increased by about 5 per cent though, depending on the characteristics of particular services, some would be increased by greater or smaller amounts.

BRSL confirmed that the range of rises would depend on individual services and traffics. General haulage traffic which was labour intensive, would have rates increases above the 5 per cent average while customers of BRS (Contracts) Ltd, where vehicles were supplied without drivers, could expect to be asked for smaller increases.

It is understood that, although the 5 per cent is less than the average that it applied for, BRSL is reasonably satisfied with the Price Commission ruling.

Other National Freight Corporation subsidiaries are still awaiting Commission decisions on rates increase applications, notably Freightliners Ltd, BRS Parcels Ltd, and National Carriers Ltd. The application for the two latter companies was formulated by the group holding company, which is hoping to have increases for implementation in mid-July.

This blanket increase application by the parcels and smalls group covers not only BRS Parcels and ,NCL but also William Cooper Ltd, N. Francis Ltd, James Express Carriers Ltd and the companies in the BEC (Specialized Services) Group. These are Bridges Transport, Hanson Haulage, H. S. Morgan Transport (Southampton), Watsons (Carriers), Scottish Parcel Carriers, Dean's Transport (Edmonton), A. Ritchie and the Tartan Arrow group.

It is understood that the detailed case made out for BRSL included some anticipated cost increases as well as those already in effect. Last week the Price Commission granted a 4.68 per cent average

increase in charges to SPD Ltd, the Unilever distribution subsidiary, the effect of which will be to raise charges by 7.67 per cent to those customers who had not had a price rise for nine months. Also approved was a 7.5 per cent increase in distribution and warehousing charges by BOC Transhield Ltd. a British Oxygen subsidiary. As recorded in CM last week, Road Haulage Association national chairman Mr John Wells has just sent a message to all members advising them to calculute their cost increases and negotiate appropriate rates increases with their customers.

In its annual report for 1972 (CM last week) the National Freight Corporation emphasized the pressure on margins, especially in general haulage under which

its subsidiaries had been operating. And although NCL reduced its subsidy by £2.4m, it ended the year with a loss as did Freightliners Ltd. BRS Parcels Ltd made a £3.1m profit on a £31m turnover, thanks partly to an "aggressive pricing policy".

One of the Corporation's fears for 1973 has been that its long-term pricing policy cannot be made to work if Government restraints bear to sharply on profit margins. Too tight a squeeze on margins would mean a return to the high-volume, nonselective approach to traffic which it has been working hard to eliminate, in favour of a strong and positive marketing and pricing policy based on offering high standards of service at economic rates for selective traffic flows or "package" distribution arrangements.


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