The Tricky Problem of Classifying Goods for Road Transport
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Cje—NEMENT is not steel, chalk is not cheese, pearls are not lk...,potatoes and sand and gravel are not machinery. The great thought lying behind this statement of facts is not entirely my own. It originated amongst a body of hauliers when they came to discuss Mr. Harry Wood's schedule of rates for road haulage as published in " The Commercial Motor " dated April 3.
Their criticism of that schedule was that, so far as they could see, it did not make adeqUate provision for the classification of goods. The plea that cement is not steel was made to emphasize that whereas these rates might be suitable for some traffics they were not, in the opinion of these hauliers, adaptable to all of them.
In effect, there are in the schedule certain clauses which provide a rough and ready means for distinguishing between classes of goods. That can be the only reason for the grant of a rebate for goods so diminished in volume that the cubic content of the load is less than 80 ft. per ton. It would be convenient if so simple a method of classification of goods for road transport could be applied, because, now that sOme sort of agreement as to basic rates seems imminent, there is no doubt that the nest problem will be that of classification.
In attempting to classify goods for road haulage the suggestion is sometimes made that the railway classification should be adopted in its entirety. I completely disagree. Such a course would be quite illogical and, if persisted in, would do considerable harm to road-haulage interests. It is quite easy to demonstrate that differences are made in the classification of certain goods for rail transport for which there is no justification whatever if those goods are to be carried by road.
What Should Be. Considered When Classifying Goods Take one simple instance. The railway carries a variety of materials packed in barrels. Those materials are classified variously, mainly, I imagine, on the familiar ground of charging what the traffic will bear, but also, possibly, because of certain risks which the conveyance by rail might attach to packing barrels of various materials in the same wagons.
In a classification of goods for transport by road, barrelled goods should come under one classification.
The considerations which must be taken into account in arriving at the basis for the classification of goods for transport by road are many, but, from the practical point of view, they may be whittled detain to the following:—
(1) Time for loading and unloading; this will cover such considerations as the difficulty of handling at either end of the journey, the problem of arranging the load on or in the vehicle and of securing it against risk of its movement in transit and possible consequent damage.
(2) The possibility of damage being caused to the vehicle in the course of loading or unloading, or in transit, due to the nature of the goods. Such undue damage would involve increased cost of maintenance and thus justify some addition to any basic rate. Many instances of traffic of this kind can he cited—sugar beet, especially when it is unloaded from the vehicle by high-pressure water jet; tartnacadarn: sand and ballast when loaded from a chute which is some considerable height above the ground; certain classes of machinery and steel and iron work, and so on.
(3) Risk of damage in transit. There are certain goods which, however carefully they may be packed, are sometimes liable to suffer damage in transit. This may involve the haulier in extra expense which should be provided for in the rate.
(4) Bulk; goods which are light and occupy more than the normal space per ton weight, so that it becomes impossible to load a vehicle to its normal weight-carrying capacity. The operating cost of the vehicle is not appreciably diminished by reason of the fact that it is not carrying its full load and the operator must, therefore, increase his charges per ton weight in order to recoup himself for the Loss of capacity.
(5) The need for special types of vehicle, as when carrying drums of electric cables, tall pieces of machinery and outside loads.
(6) The Value of the goods.
Why the item "Value" is Included in the Schedule
It may he that, in certain quarters, there will be some surprise at the inclusion of the item " value " in a schedule of factors to be 'taken into consideration when classifying goods for road transport. I do not think that we can escapethe conclusion that this factor must be taken into account. There are many traffics---I have in mind normal conditions and not those at present ruling— which, if road transport is.to handle them at all, must be conveyed at rates which are barely remunerative and if road transport be desirous of carrying those traffics, and it is, the fact that they are low-rate traffics must be accepted and faced, and provision made for it in building up a rates schedule.
That can be done only by taking the factor of value into consideration and the way in which that must be done is surely this. Include low-value traffics in the classification as low-rate traffics and offset them in the classification by assessing high-grade and more valuable traffics at a rate which affords slightly more than the normal rate of profit so that, in effect, what is lost on the former is gained on the latter.
The weakness of this proposal is that the operator who carries the low-grade traffics is not necessarily the one who transports the high-grade traffics. The provision for setting the gains from the one against the lack of gains from the other thus fails to operate. In accepting the proposition that there are low-grade traffics, however, I am only stating a fact and the proposal to take such traffics into consideration is merely accepting the position . as it is, for the kind of goods that I have in mind will not
bear the full profit which is due on any operation of road haulage.
The difficulty must be met in one of two ways. Either there must be a certain amount of co-operation amongst hauliers,. so that the conveyor of low-grade traffics will share in the prosperity of the carrier of high-grade goods, and that seems to be the fairer way, or, in those cases where that cannot be arranged the conveyance of lowgrade traffics will fall to those who, in the past, have b,een content to look to rate-cutting as the most satisfactory means for acquiring business.
Loading and Unloading Time .a Dominant Factor_ So much, for the time being, with regard to the factor of value. The dominant consideration is undoubtedly loading and uuloading time, especially in respect of traffics which are not moved for great distances. In attempting a classification, I should begin by taking the factor of loading and unloading time and would grade goods according to that into three classes—those which. took what I would first of all delimit as the normal loading and unloading times, those which took half as long again to load and unload, and those which took twice as long.
That would divide an goods into three main classes, depending upon the time needed to load and unload. Anything that takes much longer than twice the standard time would have to be treated as extra to the third class and the rate would be that for that class plus a demurrage charge for the terminal delay over and above that fixed for the third class.
Now, it shQuld immediately be clear that this triple classification, according to loading and unloading time, is a common denominator for all the other classes. Traffics in Class 2—those which are liable unduly to damage the vehicle—may be of a kind quickly handled at terminals, they may be those which take a long time to load and unload, or they may. be mid-way between those extremes. The same applies to those goods which are liable to damage in transit, to those which are bulky, to those involving a special type of vehicle and to goods which are valuable and to those which are not.
In the absence of any other consideration, therefore, it appears that in the above schedule there is•justification for 18 classes. Class 1, goods of normal value, not being liable to damage to the vehicle or to risk of damage in transit, not bulky or needing a 'special type of vehicle, and of normal value. In that class' would come the vast majority of traffics handled by operators to-day. That class would have to le sub-divided in the Classes la, lb and lc, according to the time needed for loading and unloading. So with the second class, which would need to be sub-divided in the same way.
Further complications, however, can be discerned so soon as the above seemingly simple classifica tion is laid down. First of all there is the point that the factor of value can enter into it and every one of the above 18 classes, for amongst the basic Class 1 there are bound to be goods of the kind which the haulage industry desires to convey but which are of low value and, therefore, cannot stand
the full profitable rate. There must be, correspondingly, expensive goods, the manufacturers or merchants of which will not object to paying a good rate prcivided that the service be satisfactory.
It would seem, therefore, that each of the above classes, except, of course, Class 6, can again be sub-divided, into three, according to whether the value is below normal, is normal, or is above normal. That would mean that if we eliminated the sixth class we have five classes each already sub-divided into three .which must have sub-division three times more, and from 15 classes we jump to 45.
According to this method, then, we have outrivalled the railway companies and it is clear that the next step in endeavouring to arrive at a proper basis of classification is to eliminate some of these considerations or to consolidate the classes which have been evolved as the result of taking them individually into account.
A Method of Reducing the Number of Classifications One way in which this large number of classifications can be reduced is to use the division according to loading and unloading time as a cloak for some of the other classes, in this way. The reason why it is desirable to increase the rates for fragile goods, those which are liable to damage in loading and unloading and in transit is because of the _ extra care which is necessary when these operations are being conducted.
This takes time as well as care, but it would be quite feasible to put this fragile material in the third class, based upon loading and unloading times. With that should be coupled a condition that if the goods, in addition to being fragile are more than ordinarily valuable, then the customer should be asked to pay the extra amount for insurance to cover that risk of damage. Quite a number of classes will be eliminated in that way.
Goods which require special vehicles may be treated as abnormal loads and as such, subject to direct quotation, they could be left out of what we might term the classification of • general merchandise.
It might also he possible to dispense with a classification relating to bulky goods by a general stipulation, that any package measuring more than 80 cubic ft. to the ton should be charged as though it were 80 cubic ft. per ton. . If, for example, a package measured 120 dubic ft. it would be chargeable as tons no matter what might be its actual weight.
By this process the number of classifications is considerably reduced, as I will show in a subsequent article.