MONEY MATTERS
Page 63
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NOW and then it is an interesting exercise to take a look at statistics that are available about the road transport industry. ' Whether the exercise is useful I am not so sure. Only too often the figures,.while they may answer some of the questions one would like to ask, succeed at the same time in raising a good many more. Take, for example, two matters, rates and wages, that are very much engaging the attention of operators at the present time.
Next week the Road Haulage Wages Council meet in London to consider whether or not to confirm their proposal for higher wages. They meet in a more stormy atmosphere than usual in view of the threat of strike action if confirmation is refused or postponed. The process may have gone too far for statistics to help, but naturally this has had no 'effect upon the issue of the latest figures by the Ministry of Labour. These concentrate on the third pay week in April, 1961, when men employed in road haulage under free enterprise earned on the average £14 13s. 9d.
This does not seem a bad wage when compared with the industrial average of £15 is. 4d. Average hourly earnings of 5s. 2.$(1. in road haulage were, however, substantially below the .figure of 6s. 3.5d. for the whole of industry. The explanation lies in the number of hours worked, 56.1 for road haulage as against the national average of 47.9 hours. Even this is not the end of the matter. Many operators maintain that they pay, and are prepared to pay, for many more hours a week than are actually worked.
WHATEVER wage agreement is finally reached, its effect upon rates will sooner or later have to come under consideration, together with other costs. Last week I suggested that, whatever point of view was taken, hauliers would be well within their rights in making a surcharge to cover • the extra 3d. a gallon on fuel imposed by the Chancellor of the Exchequer, although, in view of the Government's plea for restraint, there might be more than one opinion about what immediate action should be taken to recover other increases in costs over the past year.
It is notorious in any case that rate increases are not easy to apply to customers who threaten to take their business elsewhere. To the small operator the threat may seem overwhelming. He may not have all that many customers, and the loss of even one could put him out of business. Larger operators, one would imagine, would have more reserves and should be able to make a more dispassionate choice between swings and roundabouts. In the end, the question comes down to whether the increase in rates will bring in enough extra revenue from the traffic that remains to compensate for the amount of business lost, always remembering that a smaller volume of traffic should itself mean some reduction in costs.
The detailed accounts of operators in general are not easily accessible to illustrate the point, but there are at least the basic figures that the British Transport Commission publish each year to enable us to chart the fortunes onritish Road Services. The results for 1957 and 1960 should make an illuminating comparison, for between those years there was no significant increase in the rates. charged either by B.R.S. or by independent hauliers. .
As far as B.R.S. are concerned, this is borne out by the figures themselves. The tonnage carried was 16.3m. in. 1957 and 17.4m. in 1960, and the corresponding freight
receipts were £48.7m. and £53.4m., respectively.. Average receipts per ton were therefore almost exactly £3 in 1957 and about £3 Is. 5d. in 1960, an increase of 11 per cent.
Various factors may have to be taken into account. For example, the B.T.C. report for 1960 states that a greater proportion of the traffic carried by B.R.S. in that year was for local delivery and hence less remunerative.", On tlle other hand, there was an increase in B.R.S. rates starting in November, which must have had some effect on the ultimate figures, whereas the previous increase in rates in 1957 did not apply throughout that year.
On balance, it is probably not far wrong to say that B.R.S. were earning about the same for their efforts in both years, Productivity, or rather transportiVity, actually increased. Rather fewer vehicles (16,184) were operated in 1960 than the 16,312 in 1957 (although the number of trailers went up considerably) so that the average tonnage of traffic carried by each vehicle 'rose from 1,000 to 1,075.
IN spite of all these factors to their advantage, B.R.S. did much worse in 1960 than in 1957. Net receipts were £1.8m., as compared with £2.8m. The share of B.R.S. in the Commission's central charges dould well be as much as £1.8m., if not more, and if this is so it means that B.R.S. were running at a loss last year, whereas in 1957 they at least kept their heads above water. Their special position as a nationalized concern cannot entirely obscure the position. In a normal business, such results for 1960 would not only be "disappointing "—the word used in the B.T.C. -report— but would call for stringent measures. It would seem to be flying in the face of nature to make more money more economically and yet show a smaller profit, or" no profit at all.
Was there anything that B.R.S. could have done about it? If they had put up their rates at the beginning of 1960 by the full 10 per cent. generally accepted by the road haulage industry as reasonable later in the year, it is more than likely that they would have shown a better result. Although some customers would have taken their business elsewhere, B.R.S. could have afforded to lose well over a million tons of traffic and still earn more money, presumably at a slightly lower operating cost. It is doubtful, even, whether as much as a million tons would have been lost. The customers would by no means have found it easy to arrange alternative transport for so large a volume of traffic. They might well have been reluctant to transfer the goods to the railways, and hauliers with spare capacity were few and far between last year. The threat of turning to C licence operation might not be carried out when it came to the point.
THE lesson for the haulier seems to be that in the end a fair rate is its own reward. His representatives can enter the wage negotiations next week fortified by the knowledge that road haulage workers are not badly paid when their earnings are placed by the side of those paid in other industries. The employers also have the right to claim a reasonable reward. Even a group of owner drivers has recently summoned up courage to protest against the rates they are offered. Other operators with larger undertakings should certainly be no less courageous, especially when they have plainly before them perhaps the main reason for the decline in the fortunes of B.R.S.