Over the next three weeks we'll be reviewing the rules
Page 38
Page 39
If you've noticed an error in this article please click here to report it so we can fix it.
governing 0-licences, induding applications, refusals and revocations. But to start the ball rolling, we assess the implications of the increased financial threshold...
• Quality is one of the most common buzzwords in the road haulage industry, and recent moves to raise quality are based on raising the levels of financial backing which hauliers need.
From October last year, prompted by a European Directive to standardise the financial threshold for an International 0-licence at f6,soo across the EU, the threshold for those applying for a Standard National Licence in the UK more than doubled to £5,200 for the first vehicle and £2,800 for subsequent vehicles.
Implications From October 2001 these new figures will apply to all existing hauliers, but just how this is to be enforced has yet to be decided. "We are consulting on this at the moment to ensure that everyone knows the implications," says a Department of Transport spokesman.
The current situation is an ambiguous one for existing firms. The worst case scenario implied by this new legislation in its full strength is that any firm which cannot demonstrate sufficient assets to support its existing fleet could have its vehicles taken off the road.
• There are several ways that operators and prospective operators can show access to the required funds. This takes into account how long a company has been in business, if it is a limited company or an individual trader.
If it's a PLC that's been operating for over a year the Traffic Commissioner will want to see audited accounts. If it's an individual operator who's been in business for a while the Traffic Commissioner would need to see accounts or at least bank statements over a length of time. Operators are treated on an individual basis but they will all have to comply with the requirement.
How the new rules are applied to existing operators next year will be decided in the next few months so now is the time to share your views with your industry representatives.
The Freight Transport Association, one of the industry bodies to be consulted, says; The ball is in the DOT's court—we're waiting with interest to see what they have got to say," says Owen Thomas, the PTA's head of road freight policy. "We don't have any evidence of existing operators getting hugely worked up about this but I have no doubt that the big distribution and logistics operators are looking at this very seriously and deciding what they have to do."
Just how an operator's financial standing is assessed under the old system dates back to a 1993 ruling made by the Transport Tribunal, the body which considers appeals against decisions of Traffic Commissioners on 0-licences.
It dealt with the broad issues of what is meant by "financial resources" and gave some guidance about the approach which Traffic Commissioners should take. The judgement made it clear that an operator only has financial resources if they are capable of being used and easy to get at, or if he can come up with the money at fairly short notice.
"There are all sorts of ways of meeting this requirement and there is reasonable flexibility," says Thomas. If it was laid down in the legislation that operators had to have the sort of money that we are talking about here tied up in a bank account, unable to be touched for the currency of the licence, then that would be a mat ter for concern. The reality is that the Transport Tribunal decision was much more flexible and Traffic Commissioners apply it and interpret it in a much more flexible way."
The thinking behind the EC decision to raise the threshold was to produce higher standards and to get people to show a greater commitment. It makes sense financially that it is used as a yardstick," says the DOT's spokesman. "It shows that you are a sound operation and not a fly-by-night cowboy if you are prepared to stump up this amount."
However, the hauliers CM has spoken to have mixed reactions to the new rules. Jon Reyner, managing director of Geoffrey Reyner, which operates a fleet of 43 vehicles on palletised distribution out of Droylsden, Manchester, has had direct experience ofjust what a blunt instrument the new rule can be.
Guarantees
Reyner cites the case of Graham Gillespie, one of his former customers: "He set up a parcels business running two vans and tried to expand. I was looking at taking him on contract with a 17tonner but he couldn't do it because of the financial guarantees." (see panel, above right).
"For companies that are already in business it shouldn't be too much of a problem," he continues. "However, if you look at the bottom end of the market there will be a lot of companies that do not qualify, and what do they do then?"
This sentiment is echoed by Jeremy Robbins, transport manager at Leamington Spa-based C&W Knight. "A lot of subbies have disappeared over the years," he says. "A lot of one-man-bands have decided to throw in the towel saying it's not worth the hassle. Anything that would hinder them in coming back into the industry is bad news—we need them."
C&W Knight has been in business for 115 years and operates a fleet of 15 tippers, working mainly for the building trade. Robbins applauds any measures that will deter cowboys: "The tipper industry does have a cowboy element and the fewer of them there are the better for us," he says. "Ninety percent of us are playing cricket and io% are playing bloody football."
Henk Buzink, managing director of Kidderminster-based Fransen Transport, agrees: "We certainly need to cut out the desperadoes. If you have lots of money you are less likely to be a desperado. If it takes out people who are operating on the verges of reality, running too large a fleet to maintain it and so on, it's a good thing." But Donald Campbell of D&J Campbell, which runs five vehicles serving the fish farming and agricultural industries in Argyll in the west of Scotland, is not so sure. "The way the industry is at the moment it's going to be difficult because a lot of hauliers are in a bad way financially," he points out.
Struggle
"Someone with pots of money can get into the industry and maybe a good person who is going to struggle but make a good job of it isn't going to get in," Campbell adds.
Although the DOT says no figures are available for the numbers of new applicants registering, Peter Costello, operator licensing manager for the West Midlands Traffic Area, says he hasn't seen a drop off in applications during the eight months since the higher limits were set. He reckons it's the existing operators who bend the rules who have
the most to fear. "Everybody should be putting the same commitment into maintaining their vehicles," he says. "There is a group of people out there who don't maintain their vehicles adequately and yet still survive in the legislation. This is one way they can be taken out."
IN by Paul Newman
See next week for a guide to 0licence applications—and refizals.