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The Bill BY S. BUCKLEY, Assoc. Inst.

and the future for C-licence operation

ALREADY many far-seeing operators of C-licensed fleets are trying to. assess just how the Transport Bill will affect their mode of distribution. Undoubtedly there are difficulties in making such a forecast. A mammoth Bill of 169 clauses is still before Parliament and subject to amendment before it becomes law. So no-one can yet be sure as to the final details.

Meanwhile trade and industry expect the rapid and regular flow of their products by road to be maintained and indeed increased where necessary. To ensure the continuity implicit in the standard of reliability provided by many C-licensed fleets, forward planning must also continue—however much political debate seems to confound the forecasters' efforts.

So, assuming the Transport Bill becomes law largely in its present form and that a liberal interpretation is given to it' by the Licensing Authorities—admittedly two big assumptions—what will present C licence operators make of the new transport world that will then emerge?

To find out one man's view I first discussed licensing trends with Mr. Peter Thompson, transport controller of the Rank Organization. With over 1,000 service vans and 400 larger goods vehicles his company has a wide range of interests in road transport.

With such a large fleet of service vans I expected Mr. Thompson to be enthusiastic about the proposals to free from licensing goods vehicles not exceeding 30cwt unladen with the associated removal of the irksome chore of keeping statutory log sheets. Not so, however. Despite the saving, nationally, of statutory paperwork for 900,000 or so light vehicles Mr. Thompson contended that most efficient firms operating this type of vehicle would still need to keep similar records as the basis of their control system.

In the wider concept of overall transport policy Mr. Thompson was insistent that existing C licence operators would have to recast completely their whole mode of thinking. With the concept of the C licence having been with us for over 30 years a mental barrier had been created as to what was and what was not legally permissible for operators to do under a C licence.

Within the prescribed limitations of a C licence those traders and industrialists who had found it worthwhile to provide their own road transport had built up efficient organizations to carry out that task. But the more efficiently that this had been done, the more likely was it that staff had built up a mental barrier against exploring what greater efficiency would be possible if present C licence operators could carry for other companies.

However, I suggested that the opportunity which the Transport Bill provided for own-account operators to back-load was probably not as great as had been forecast. Many daily journeys undertaken by Clicensed vehicles were circular in pattern and seldom direct to a single point and then returning to base. As a result there was no "return journey" in the accepted sense and likewise there could be no corresponding return load.

Accepting that this was so in a substantial proportion of retail distribution, Mr. Thompson nevertheless contended that there was a sufficient number of journeys now being undertaken by C-licensed vehicles which would well merit a re-appraisal should the proposals to permit back-loading become law. Inevitably many companies had unbalanced flows of traffic, both geographically and seasonally which might well counterbalance with another own-account operator's traffic if inquiries were made. These, he added, would not be too difficult to pursue as many of the transport executives likely to be involved already discussed common problems at both national and local levels of trade associations such as the TRTA.

I asked Mr. Thompson: How would all this affect the professional haulier as we now term him? On balance, he claimed, there would be a substantial increase in the amount of work available for hauliers but a switch in the type of work available.

At present two C licence operators with unbalanced flows of traffic in opposite directions could not combine their efforts to the best economic advantage. Where one of the operators offered his traffic to a haulier he would probably find the rate offered lower than the cost of doing the job himself and returning. empty. But if subsequently, when the Bill becomes law, both flows of traffic are offered to the haulier for a combined quotation Mr. Thompson suggested that the haulier would be unlikely to look kindly on this trend. If the two traders operated their vehicles efficiently the haulier would know that they could probably do it as cheaply themselves. Moreover the haulier had the economic objective of maintaining an acceptable revenue-earning capacity from each of his vehicles if his business was to remain profitable.

Agreeing that some present C-licensed operation would fall into this category of permitting joint operation between two or more traders, I suggested to Mr. Thompson that while the economics of the exercise might be favourable, there could be a lowering of service standards. It would be optimistic to assume that vehicles could be regularly back-loaded with no loss of time in collecting the next outward load.

In reply Mr. Thompson contended that from the savings achieved by a transport department through back-loading a sales department could then decide, according to individual circumstances, what were the best ways of making use of such savings. For example, where a weekly delivery to customers had previously sufficed, a twiceweekly service might now be possible at the same overall cost with a corresponding improvement in the trader's competitive position.

However, it would seem that joint arrangements between two or more existing C licence operators would largely be between firms in non-competitive trades and with compatible types of traffic. This would facilitate movement on a standard type of vehicle such as the platform vehicle or box van, although there could be some examples of movement of specialized traffic where the need to maximize the use of relatively high-cost bodies was great.

• With the implementation of the provisions of the Transport Bill, Mr. Thompson believed there will be an even greater appreciation of distribution in all its aspects as distinct from the physical movement of goods only. Those organizations which already have a complex distribution network including both vehicles and strategically placed warehouses may well be able to offer the service they are at present

providing for their own company to other traders. Alternatively two organizations with their own warehouses could combine forces, improve their geographical coverage, reduce the radius of delivery and increase the number of deliveries per vehicle per dgy.

However, Mr. Thompson agreed that such an arrangement of interworking might not be a proposition for firms in direct competition. But there remain many flows of traffic where this would be possible and where the high proportion of platform vehicles, box vans and even tippers would facilitate such interchange of traffic.

Re-appraisal

I asked Mr. Thompson how he reconciled this trend with his claim that the professional haulier would have much more work to do in the future. His answer was that under the new proposals many present C licence operators would be compelled to make a complete re-appraisal of their activities as a result of which many would decide it was no longer worth while providing their own transport.

Elaborating on this Mr. Thompson considered that while it was an exaggeration to say that C licence operators did not know what it cost to run their vehicles, there were many cases where the decision to do that was made on marginal economic grounds. In many cases, too, the ratio between the high cost of the unit carried and the relatively low cost of its delivery made previous distribution decisions of secondary importance.

But it will be of the utmost importance to every company operating goods vehicles in the future that the standard of fitness of road vehicles are maintained year in, year out and that the many allied regulations, including compliance with the transport manager's licence, are met. Many small operators will decide that with the raising of the status of road transport as an underlying intention of the Transport Bill, it will have become too professional for their limited resources and expertise.

With the traffic of such former C licence operators coming onto the haulage market, Mr. Thompson considered that there would be thriving business to be done by hauliers operating up to 16-ton-gross vehicles within a 100-mile limitation. Introducing professionalism to the industry, which the advent of the transport manager's licence implied, could well prove the hauliers' charter.

Such developments, Mr. Thompson forecast, would lead to a more dynamic road transport industry. Despite the industry's expansion to become the major sector of inland transport in the UK, he contended that road transport had not been as goahead as it might have been in applying modern techniques of management and organization. Much of its success had been the result of the technical development of goods vehicles by the manufacturer and the admitted flexibility of small operational units.

The existing pattern of the road transport industry was to some extent a reflection of the protection afforded by the present licensing system against entry and expan sion. In his view the new Bill provided the opportunity to get rid of such obstacles to efficient growth.

Another reason why Mr. Thompson considered that some existing C-licensed traffic would pass to professional hauliers in future was that it would become increasingly difficult for own-account operators to continue to operate on false cost criteria. Because of the stringency of the new regulations affecting vehicle fitness it would no longer be possible to underestimate the true cost of such items as maintenance and depreciation. Then, with the true facts before them, such operators would decide to hand their traffic to the professional hauliers.

If it is accepted that many years of operation within the confines of restrictions implicit in a C licence can create a mental barrier, then some might contend that any forecast as to future developments by a present C-licence operator could be correspondingly restricted. In order .to avoid that possible error I sought the views of an operator of over 200 vehicles running under A, B and C licence—Mr. E. R. Durham, executive director, Keith and Boyle (Transport) Ltd., London, SW9.

Major effect

A major effect of the Transport Bill, in his view, was that it would drive firms at present opposed to contract hire to try it out. Companies with fleets of, say, up to 12 vehicles were normally dependent upon retail suppliers for their maintenance and were often not large enough to enjoy user discounts.

An advantage of obtaining vehicles on contract hire had always been the shedding of administrative and maintenance worries by the firm operating the vehicles on to the contract hire specialist. With the more stringent legislation now being applied to vehicle fitness this advantage would be accentuated.

In the past many C licence operators had got by with maintenance provided to minimum standards; obviously this would not suffice under the new legislation. But often their fleets were so small that withdrawal of only one vehicle for maintenance represented a considerable proportion of their total fleet, with corresponding disruption of their traffic flows.

Now, with official annual inspection and almost inevitable pre-inspection washing and maintenance, the number of days when vehicles were not available for service was going to be increased. But even so it would be quite uneconomic to provide a spare vehicle for many of these small fleets.

There was a relationship here between adequate costing and adequate maintenance, Mr. Durham insisted. Professional transport operators of sufficient size and financial backing costed all their activities by a system of budgetary control. As a result they knew that in, say, three or four years' time a vehicle would require substanfial and expensive major overhaul and they made the necessary financial provisions from the outset.

In contrast when this point had been reached in the life of a trader's vehicle he had not had the financial resources to do all that was necessary and had struggled along on the basis of make-do-and-mend. In the future annual tests and the severe penalties for continuing to run un-roadworthy vehicles will make such a policy—or rather negation of policy—untenable.

Going against himself as an A licence operator, Mr. Durham said that as a citizen he had to admit that two large Contract A licensed vehicles travelling long distances empty in opposite directions was an obvious waste of national resources, not to mention the addition to traffic congestion. If the proposals of the Transport Bill were implemented then there would be some inter-working between present traders' traffic flows.

As a result Mr. Durham forecast there would be more competition for back-loads with a resulting lowering of rates. There was, however, the proviso that there was a lot of C licence operation which was restricted to collection and delivery and, in any case, many operators had found that backloading was not generally an economic proposition under 100 miles when the inevitable additional terminal delays were taken into account.

Integration and professionalism were two basic aims of the Transport Bill. The user of the transport service, however, was best able to integrate its traffic in the best interests of his customers and himself. But it was for an engineer to "integrate" maintenance facilities over a large number of vehicles if the job was to be done both economically and with sufficient qualified supervision to ensure that vehicles would meet the high standard demanded by the new legislation.

Understandably much of the forecasting as to the likely effects of the Transport Bill concerned traffic flows. But in Mr. Durham's view another important trend would be in the "professionalizing" of maintenance. With higher maintenance standards being demanded by law at a time when skilled staff were as scarce as costs were high, rationalization of maintenance seemed an inevitable trend.

Suggestions had already been made as to the feasibility of maintenance "co-operatives" between operators, particularly hauliers. In essence this was the role already played by the contract-hire specialist and especially on behalf of the C licence operators. Therefore with the realization that they themselves were unlikely to be able to achieve the high maintenance standards to be demanded in the future, present C licence operators were likely to shed the responsibility increasingly in the future.

But this was rationalization of a particular function—maintenance—on a relatively limited scale. Transport was a personal service. It had to take account of the vagaries as well as the difficulties of individual customers.

Nationalization failed because it was too big to provide a personal service, however correct the underlying theory might have been. Therefore, Mr. Durham forecast, the ultimate success of any trend would have to be measured by its ability to provide a better personal service than existed before.