Hauliers' real enemy
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IN THE MIDDLE of last year this column tried to take an objective look at capacity control in road haulage. It suggested that, although such schemes originated in a desire to protect the railways and canals, today's conditions require the topic to be looked at in a different light.
In particular it pointed out that capacity control systems exist in almost every West European country, from rail-oriented Germany to road-minded Netherlands. Far from being resisted, they are strongly supported by the RHA's local equivalents.
The classical arguments for road haulage capacity control are well-known. The relatively small amount of capital needed to enter the industry makes over-capacity a real threat, with the consequent danger of rates being cut to uneconomic levels. Persistent rate-cutters inevitably go to the wall in the end. But before doing so they can take traffic away from hauliers who know their costs and are attempting to cover them, and thus ruin them, as well as themselves.
The LAs' annual reports show that in Britain at present redundant drivers are using their compensation money to buy vehicles which their former employers were unable to make pay. Does it make sense, it was asked, in these circumstances, for the RHA to maintain its opposition to any controls on the amount of road haulage capacity which was licensed?
Almost a year later the RHA's director-general told Tipcon that the RHA National Council had recently reconsidered the question at some length. It had come to the conclusion that the policy should remain unchanged.
One reason for this decision was the fear that a future Labour Government "might turn capacity control into something that was against the industry's interests". At the time he spoke those words the 1983 General Election campaign was just getting under way, and such caution was obviously prudent. Now that the political future seems to be settled for the next four years perhaps it is time to be more adventurous.
In view of the fact that the National Council has only just rejected the idea this suggestion might seem premature. But if Mr Plaskett's words to Tipcon, quoted verbatim above, were chosen with his usual care, they can be interpreted as meaning that capacity control is not inevitably against the industry's interests.
The Labour Party's proposals for such controls were rightly regarded as hostile, since their main purpose was to force freight on to rail. But any threat from that quarter can surely be disregarded for several years to come. Those forms of capacity control with positive objectives can now be considered calmly, and without fear of misunderstanding.
It is interesting to note a mirror image of similar fears on the other side of the world. The New Zealand Government has announced that it proposes to abandon rail-protective controls over road capacity in both freight and passenger transport. This follows visits to Britain by representatives of the New Zealand industry and Ministry.
The road transport industry seems resigned to these changes, rather than enthusiastic about them. But the railway interests are hostile, and are gathering forces to fight the change. There are some British hauliers who would advise their Kiwi colleagues to join forces with the railwaymen. For it is far from clear that the present freefor-all benefits them. (Nor does it seem likely that it has cost the railways much freight traffic, but that's another story.) It may be that the RHA National Council's decision was influenced by the view that the present economic depression, which has led to over-capacity and ruinous rate-cutting, is a short-term affair. They may hope that when things return to normal the problem will at least be eased, if not totally resolved.
This column is not going to try to predict whether the economy as a whole is, or is not, on the upturn. Readers can choose which of the many experts to believe. There is certainly a wide range of contradictory opinions.
But there can be little doubt that British manufacturing industry will not recover quickly — if ever — from the holocaust of the last four years. The combination of a high exchange rate for sterling with a world depression has dramatically reduced the output of our factories. This is not just a matter of short-time working, or temporary lay-offs. Many factories have been closed down and the machinery dismantled for scrap. In some cases it has even been exported to our competitors.
Those optimists who claim to see growth predict that most of it will be in the service sector. That would be better than nothing, and will provide some traffic for the industry — if it actually happens. But it cannot replace the multitude of transport needs of manufacturing industry which has traditionally provided such a large part of road hauliers' traffic.
' The RHA should perhaps consider whether the presen state of affairs is not nearer normality than that prevailin the early Seventies, and whe open access to the market is best policy in these circumstances.
It is interesting to note that Association's international policy is much more restrict', It has decided that the quotai imposed by foreign
Governments are big enougl To increase them would lead over-capacity. Although this policy originated in the International Group it, too, w approved by the National Council. This seems inconsistent.
This apparent schizophren due to realism. The internatir controls already exist and, despite the efforts of the EEC Commission, are not going ti away in the foreseeable futui But as Mr Plaskett told Tipcol the present Government is n going to introduce domestic capacity controls.
In this he is absolutely righ the present time. But this cot change. A political upheaval Party terms may be unlikely. it is not impossible to envisal circumstances which could a even this Government's polii the direction of more restrict Another and prolonged oil cr is the most obvious, but ther could be others.
It would be a pity if the RH, was totally without ideas for dealing with such a situation were to arise. Clearly it woull foolish to waste much time drawing up a detailed plan ir vacuum. But it would be equ foolish to equate all forms of capacity control with railway protection. Their day may ye return as a protection from foolish rate-cutters. For it is t not the railways, who are the real enemy of the profession haulier today.