FUTURE FOR REMOVALS DUSTRY
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By S. Buckley,
ASSOC INST T
DELEGATES to a well-attended conference of the National Association of Furniture Warehousemen and Removers held in Jersey on Wednesday and Thursday last week heard and subsequently discussed a wide range of topics directly concerned with the prosperity of their industry. New ground was broken on two counts. It was the first time a conference had been held in Jersey. It was also the first occasion on which a newly elected president of the NAFWR represented public enterprise. namely Mr. George Skelton. director and general manager of Pickfords Ltd.
Then on Friday there followed the annual conference of the British Association of Overseas Furniture Removers under the presidency of Mr. S. P. Mason.
Labour relations was the subject of the first paper of the NAFWR conference and as reported in our issue last week this was given by Mr. H. F. Marks. The seriousness of the situation which faced management in the removals industry was then forcefully set out by Mr. D. J. Blatchford. Many incentive schemes had been dropped because of abuse or failure to produce the extra productivity for which they were designed.
The method of incentives which Mr. Blatchford preferred was that applied to net profit. If this was generous enough it could be graded to all executive positions including management. Criticizing the lethargic attitude of many businessmen, Mr. Blatchford said that one would expect that the younger generation of managers would move in with new ideas and put things right. The fact was. however. that too many of them were products of precisely the same environment that produced their predecessors. They hardly exhibited that adventurous. searching imagination which the industrial revolution produced. At best, they travelled a little faster along the same old paths. The drive necessary to compete in the industrial world was simply not there.
It was essential that the association looked into the management position and if there was sufficient merit in a minimum salary scale to implement this, so as to attract new brains to the trade.
Staff incentives was the subject discussed by one of the study groups into which the conference was split during the afternoon session on Wednesday. The chairman of this group. Mr. 'J. N. Tarsey (Pickfords Ltd.), defined incentive as "an incitement to action and a provocation coupled with motive".
Formerly wages were controlled according to price and level of competition rather than by evolving new methods by which all levels of management and workers could benefit. But a striking change took place when Henry Ford introduced an incentive scheme in his production plans. He thereby produced at a price suitable for the consumers' pockets and at a wage which permitted him to recruit the cream of the taboomarket. Today, incentives for staff within industry had become the order of the day.
Many maintained that greater productivity to the benefit of owners and staff alike at all levels was not possible in the removal industry. But. Mr. Tarsey claimed, it was not an insurmountable
n. Because they had no end product which could be assessed s of quantity production, removers could assess only the : of work performed. Investigation and research were neces t provided a staff incentive scheme was built on sound lines, he advantage of facilitating the recruitment of a better quality The inability to do this now was a problem removers l facing and it was a problem which would become worse andard of the industry was not improved.
present wages structure, Mr. Tarsey continued, made arrangincentive scheme more difficult. Management wanted work out in the shortest possible time on the grounds of efficiency. ;ause of low basic wage rates staff were dependent on a conk amount of overtime to bring them to the required level t was regarded as a living weekly wage. Obviously the two ments pulled in opposite directions.
.oductive incentive scheme was the only way of overcoming thlem. The question, however, was not only one of incentive whom and over what range it should be applied.
present method of payment in the removal industry did not labour. Unless it made itself more attractive, Mr. Tarsey led, it would get the rubbish of the labour market.
dardization of containers could result in competition from ni undertakings outside the UK. This was a comment made Michael Gerson when speaking on "Articulation and lerization". It would then be particularly abhorrent to existing UK removers to be expected to be a sub-contractor in their own country just doing the unloading at the UK end. A possible solution, Mr. Gerson suggested, might be for the NAFWR to have an arrangement to buy containers in bulk.
Dealing with rates and charges, Mr. N. Benson insisted that the removals trade seriously required educating in the subject of costs and charges. Additionally, it was the job of members to try to educate non-members on costs and he suggested there should be a national fixed minimum for long-distance removal.
Industrial training was the subject of a paper given by Mr. W. Isard at the opening session of the conference on Thursday. The Industrial Training Act and subsequent official announcements constituted a forbidding mass of paper. But delegates would soon have to determine just what was required of them with the establishment of a training board for road transport which included within its scope the removal industry.
As an extension of the training courses already provided by the Institute of the Furniture Warehousing and Removing Industry Mr. Isard suggested that they should consider formulating further courses in strategic places for combined Association areas. But that inevitably meant that someone would have to inaugurate them and, moreover, finance them.
Admittedly many larger firms had their own training set-up but smaller firms with limited facilities would find it most difficult, if not impossible, to provide their own training. Accordingly, the advent of an industrial training board for their industry would be an advantage in recruiting staff. But the employer must inevitably ask himself whether such men, having undergone their training, would be a more valuable asset in that they would earn more money for their company.
In subsequent discussion Mr. A. W. Balne emphasized the need for cinematograph films in training and asked for the support of delegates in his venture to provide such films relative to the removal industry.
Living habits in the year 2000 were a factor which had to be taken into consideration when assessing the long-term future of the removal industry, said Mr. Gerald Werhner. Already living accommodation was getting smaller and the number of skyscraper flats to which they had to deliver furniture was increasing. Moreover, there was a growing demand for built-in furniture and the use of very ' much smaller furniture in living rooms and kitchen. New towns were being planned by each successive government to help house people and decentralize industry.
To meet these changes in living habits there was technical development within the industry itself. The advent of motorways encouraged removers to use larger and faster vehicles and Mr. Werhner suggested that much greater use would have to be made of articulation. He visualized the growth of containerization in conjunction with British and Continental railways for larger consignments over greater distances and he considered that this held out one of the biggest prospects for the future.
Regarding warehousing, it was getting increasingly difficult to find, let alone purchase, land for warehousing purposes. But there was also the modern trend against the hoarding of personal possessions, and immovable built-in furniture would continue to reduce the size of storage consignments. Labour-saving machinery, such as motorized stairclimbers, should be introduced. Moreover, men had a greater pride in their jobs if they were using such machinery in their everyday work rather than being merely furniture humpers.
Study in profitability
"Profitability in the furniture warehousing and removal industry is practically non-existent", was the forthright comment made by Mr. C. S. Elliott when presenting the final paper at the NAFWR Conference on Thursday, entitled, "A study in profitability".
The continual increase in costs within their industry—Mr. Elliott told delegates—was proportionately overtaking the charges made to the public for their services. A high proportion of removers were. in fact, saved from bankruptcy by two aspects associated with their trade. One was by relying on old freehold values or cheap rents to keep them in business or, alternatively, subsidizing removal and storage business with ancillary services which, through their recent introduction, had more regard to present-day costs, values and charges.
This state of affairs was not limited to this country. Canadian removers were reporting a steady decline in profitability whilst a typical remover in the USA reported that whereas costs of labour and overheads had increased 24 per cent in five years, charges had not appreciably changed.
Mr. Elliott then dealt specifically with what constituted a fair return, i.e. the interest on money invested in a company together with a proper percentage of profit. The individual proprietor might be inclined to regard as profit all that remained after he had paid the expenses of running his business. But in so doing he forgot that if he had worked for someone other than himself he would have earned wages and if he had put his money in a safe investment he would have received interest on it. What was commonly regarded as profit in a small business really comprised three elements, namely wages and management, interest on capital and finally pure profit.
There were still members of the industry, Mr. Elliott declared, who considered that a loss on a removal could be off-set by the profit on storage. "Let us once and for all time kill this fallacy. No loss of profit on the one hand can be bolstered up without reducing the ratio of profit on the other."
Regarding warehousing Mr. Elliott said that a realistic up-to-date cost on running a warehouse was between 7s. and 10s. per foot square. Much of the property now on offer as warehousing was commanding rentals of anything between 10s. to 12s. 6d. per foot. In many other industries today the addition on costs for administration and profit was 100 per cent, whilst in certain cases such as vehicle repairing the accepted figure was nearer 125 per cent. An industry charging adequate prices and showing a realistic figure of profitability would have no difficulty in creating its own image.
To achieve this the NA FWR must accept the need for a revaluation of their concepts of costing and their recommendation to members. The costing committee should wholeheartedly support participation in the Interfirm Comparison scheme put before members last year. Such action must be both dramatic and dynamic and a campaign should be started throughout the entire industry.
Removals by air
Removals by air was a major topic considered by delegates to the annual conference of the British Association of Overseas Furniture Removers held in Jersey last Friday. In introducing the subject, Mr. T. E. Mitchell said that a substantial increase in air removal overseas was inevitable because of developments in the air freight field. With the introduction of jumbo aircraft and supersonic airliners more and more of the present fleets of the world's airlines would be given over to the carriage of freight. Moreover there had been a tremendous increase in air freight generally over the past five years.
But in the UK Mr. Mitchell felt that the removal industry had not so far made full use of this modern means of transport. As a result the volume of removals by air into Europe from the West was far in excess of outbound shipments by air going back to the United States and Canada. If' they were to participate fully in the future increase of business, they must overhaul entirely their sales efforts and work more closely with their overseas colleagues and airlines themselves. They must take a new look at containers which were now too expensive and even after five single trips were certainly not economical. It must surely be possible to develop a suitable disposable container.
Regarding the jumbo freighter, containers of 20 ft. in length were being considered and ft ,e time left for removers to "get themselves off the ground" in this respect was short. In this age of change, Mr. Mitchell envisaged thzt within the next 10 years charter aircraft sponsored by trade associations would be quite normal and they could even consider such aircraft being returned on a back leg charter by sister associations overseas.
It was estimated that some 7.000 different commodities regularly cross the Atlantic by air already. So commented Mr. F. A. Hudson of British Overseas Airways Corporation when elaborating on this subject of removals by air.
Whilst it was true that air cargo rates were much higher than ocean freight rates there were other factors to be considered. Speed was the airways prime offering. This brought an immediate economy in hotel costs for the family concerned in a removal which could in itself often outweigh the difference in freight charges. Risk of damage was less in air cargo than in other forms of transport and this was reflected in lower insurance premiums. Where duty had to be paid, lower packing and inland transport costs meant a lower value for duty assessment. Alternatively, where duty was payable on gross weight, a lower gross weight for assessment likewise meant less duty.
Handling air cargo
Mr. Hudson then outlined the manner in which a modern airline handled its air cal go. Around 70 per cent of BOAC traffic was received through their network of approved cargo agents. They provided the staff to handle customs documentation, arrange cargo space, book connecting flights and complete airway bills. Complicated consular documents were required by some countries and a cargo agent delivered to BOAC shipments ready for immediate loading. It was little use flying household effects across the Atlantic in seven hours if they were to sit two weeks in a warehouse awaiting the correct documents.
All BOAC flights had bookable cargo space but larger containers would only be suitable for cargo aircraft. A VC-10 would carry a single piece up tb 73 in. by 55 in. by 40 in. in its underfloor hold. Their London ca -go warehouse had a floor area of 90,000 sq. ft. with cargo moved on conveyor belts, live rollers and roller bed trolleys to a storage point until called forward. Documents were checked for accuracy and a punch-card system had taken over most of the clerical functions. Around 90 mins. before departure the cards were fed into a computer to provide warehouse "picking lists" and aircraft manifests.
The normal freighter pallet had a floor measurement of 125 in. by 88 in. and they would 'soon introduce a modified glassfibre pallet called an "Igloo" which was shaped to the contour of the aircraft for the maximum volumetric use.
Some 2,800 tons of cargo was handled each month by BOAC at London and this increase of 125 per cent in 10 years was handled by a smaller labour force. The Argosy freighter used by their sister airline BEA, Mr. Hudson continued, could be completely offloaded and reloaded in 30 min. through its nose-and rear-loading doors. Its capacity was 2,500 cu. ft. with a weight payload of 12,000 kilos.
Regarding cargo services offered by other airlines, connections could be arranged to the Caribbean and South America whilst Qantas could fly containers up to the size of an SC 26 (82 in. by 48 in. by 48 in.) to Australia via Mexico or the Far East. BOAC was sponsoring a comparatively new cargo scheme for combined sea/air service to and from Japan.