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Political Commentary

16th April 1954, Page 45
16th April 1954
Page 45
Page 45, 16th April 1954 — Political Commentary
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Which of the following most accurately describes the problem?

Without the Law

By JANUS

SUGGESTIONS for the licensing of clearing houses have been made many times. For more reasons than one, it would suit the established clearing houses. . They would have protection from competition by the payment of a small annual fee, and at last they would have legal recognition. Most clearing houses are not given to introversion, and are not much worried at being classed among the lesser breeds without the law. They can build from next to nothing an establishment as impressive as the mansion of Lamia, but they may occasionally fear that in the same way it will dissolve back into air.

They have no official status, and although everyone knows what a clearing house is, he may have difficulty in giving an exact definition. The Road Haulage Association has had to formulate two categories; the clearing house which accepts and passes on traffic, but does not operate vehicles; and the carrier clearing house, which has its own vehicles although its "main annual turnover " comes from sub-contracting traffic. "Main " means more than 50 per cent. The limit is completely arbitrary, and may exclude from membership of the R.H.A. clearing-house section many companies that would generally be thought eligible.

The problem of definition is one reason for the opposition of hauliers to any proposal to license clearing houses. The practice of sub-contracting is widespread, and hauliers might easily find themselves caught by restrictions designed to regulate the business of somebody else. It is felt, in any case, that there are more than enough Acts and controls interfering with the freedom of road transport.

Filtering Applications

Perhaps as a substitute for licensing, the executive committee of the R.H.A. have gone so far as to agree to fairly rigorous terms of admission to their clearinghouse section. In future, a clearing house, after applying for membership of the Association in the same way as a carrier, has to show that it has been in business as a clearing house for at least two years. It must produce an auditor's certificate of gross turnover to show the more than 50 per cent, is in respect of subcontracted traffic. Also required is a satisfactory report following a trade inquiry.

Similar, although not precisely the same, conditions of entry were imposed a few months ago by the National Conference of Road Transport Clearing Houses. Presumably, there is no guarantee that either the Conference or the R.H.A. will accept an application, even when all the conditions are met. The danger of the closed shop is not altogether avoided. On the other hand, there is a safeguard against abuse in the fact—a little surprising, if the truth be known, to the clearing houses themselves—that the hauliers agreed to the conditions of membership. To avoid criticism, the clearing houses will probably also avoid too exclusive an attitude towards applicants whose credentials satisfy reasonable requirements.

A novel provision in the R.H.A. terms of membership is designed to help the otherwise desirable clearing house that is unable to meet the two-year qualification: It might seem harsh to compel such a clearing house (possibly already a haulier member of long standing) to Wait as long as two years before its application is even

considered. The two years may be reduced to one if the clearing house joins the R.H.A., as a clearing house but not as a member of the section, and signs the recently formulated code of business conduct. In 12 months' time, if no complaint against him has been upheld, the postulant is entitled to ask for admission to the clearing-house section.

How this works in practice may provide an interesting study. It is difficult to understand, for example, how complaints can be expected about a probationary clearing house that does not appear on the approved list, and is not therefore known to have signed the code of conduct. But the general purpose of the new conditions of membership is plain. One may regret their necessity. The code of conduct drawn up last summer has much to commend it, and, if properly observed, could have been a complete solution to the present problem.

Limited Commission It lays down that rates shall be those generally recognized as fair. Commission shall not exceed 10 per cent., even when the traffic passes through the hands of more than one sub-contractor. Payment for banking, sorting, provision of extra labour, tackle or other extraneous services, shall be a matter between the clearing house and its customer. Prompt payment Shall be made and proper conditions of carriage observed. Clearing houses will use hauliers who are properly licensed, and the hauliers will in their turn respect the relationship between the customer and the clearing house, Unfortunately, the existence of this code is not in itself sufficient at the present time, when large numbers of traders are being forced to change their traffic habits. There appears to be in operation a kind of Gresham's law. The bad clearing house tends to drive out the good, or this would happen if precautions were not taken against it.

In an ideal world, the mere existence of the code of conduct would be sufficient protection for hauliers. Any clearing house that applied would be allowed to join the appropriate section of the R.H.A., on the principle that even the hardened sinner can he cured by precept and example. A clearing house that transgressed would naturally be the subject of protests, and would be called upon by the Association to mend its ways. In the last resort, the Association could expel the persistent offender.

In practice, there would be many difficulties, Expulsion is a step that any Association hesitate to take. The distinction conferred by membership of a clearing-house section would disappear even if a small number of undesirables was admitted. Hauliers would cease to place any reliance on the approved list, and the code of business conduct would become worthless.

For th._. moment, the imposition of strict terms of membership seems unavoidable. It may be hoped, however that the situation will change when the process of disposal comes to an end, and the road haulage industry regains its stability. Then will be the time for the R.H.A. and the Conference to give fresh consideration to their terms of membership. The code of conduct is worth retaining, but it would be a good thing if restrictions on the development of new clearing houses were to be removed as soon as they have served their present purpose.

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Organisations: Road Haulage Association

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