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Pay and productivity in road transport: a trade union view

BY FRANK COUSINS, PC

WHEN preparing a paper on matter concerning the road transport industry, it is not unusual for the writer to enter reservations. On this occasion there seems more justification than ever for making clear that many of the important factors concerning the industry cannot be considered in full detail either in relation to the trade union view on road transport pay and productivity, or even on the nature and construction of the industry in general.

At the present moment the Transport Bill has not yet completed its passage through Parliament nor has there been any really detailed Government reaction to the views expressed by the Lord Donovan committee on Trade Unions and Employers' Associations. There have also been some attempts by the National Board for. Prices and Incomes to set down general views on productivity bargaining and make detailed comments about certain sections of the road passenger transport industry.

It may well be, therefore, that the issues which will be before the Fleet Management Conference will need to be broadened to give regard to certain decisions which may be taken between the date of the written paper and final conference discussion. Nevertheless, certain factors will inevitably be of importance as a background to our discussion and it is these which are dealt with in this paper. It will not be practicable to deal with pay and productivity discussions in isolation; they must in future be recognized as part of our negotiating structure. Productivity bargaining brings a new emphasis upon the quality of management required and on the effectiveness of its decisions. If we attempt to isolate the discussions into various sections, it is only because there are differences in emphasis in each section of the Industry, but I must of necessity make a continuing comparison if there is to be an understanding of the values of a modern approach.

Passenger transport

If one were taking a cursory glance it might be felt that the subject of pay and productivity has not been a common feature of discussions within this section of our transport industry. This view might be based on the understanding that even the subject of oneman operation of buses has only been discussed at a comparatively recent date, and in some instances without success. But this would ignore the fact that at local levels productivity talks regarding schedules of services, frequency of operation, and peak time journeying have always been regarded as quite proper for detailed discussion. It is therefore well to emphasize the union point of view.

Productivity measures within the passenger transport industry can be rewarding for the employer and employee—and passengers. The union regards all proposals as being open for discussion and negotiation. These include: one-man bus operation; numbers of standing passengers; automatic fare collection; re-routeing and radio communication systems.

But we emphasize, as we must, throughout the discussions that if such subjects are examined there must be a readiness to discuss basic wage adjustments, over and above minimum national wage rates. There must be a reasonably satisfactory price paid for the changes in practice, and the important factor of redundancy must be treated in a humane way. It will also be necessary to ensure that agreements negotiated in good faith must not be disallowed on the views of opposition expressed by Civil Servants.

There must be local bargaining

As productivity bargaining often means accepting new methods and changing old ideas, it is essential that bargaining should be conducted at local level between those who know the details of the problems involved. This makes the actual worker part of the negotiating body and able to make decisions.

Circumstances are varied in each undertaking, and to provide flexibility and a sense of participation by the workers, agreements must be adapted for different authorities.

We hope that the action of the municipal employers in rejecting the idea of an agreement to replace "standard" rates with "minimum" rates will be reconsidered. This idea was a progressive one which we were sure would have paid dividends in the future.

The Donovan Commission on Trade Unions and Employers' Associations has recommended local bargaining, and suggested that national employers' organizations and unions should look at their bargaining structure. In order to accelerate this process it must be an urgent task to establish the principle of the "minimum" rate and a structure which goes with this proposal.

There is need for expediting this because we do not have time to spare. The drivers' hours revision section of the Transport Bill must present a challenge to both sides—but particularly to management—to reorganize the industry. There are many other problems facing the industry, one of which, congestion, affects both pay and productivity. The recent report from the Road Research Laboratory established that a "carless London" system would have the effect of reducing vehicle-operating and passenger-time costs by £20m. annually, and that by using buses in the 20-70 seater range, average passenger time could be reduced by a third. This has implications outside the London area.

If the Government does, as seems likely, introduce the new Passenger Transport Authorities, this will be a real challenge. Fron a practical point of view this could play a major part in the examination and operation of regional services. It is for this reason that we have sought direct representation of bus workers on these PTAs—so that the knowledge, experience and co-operation of the bus workers can be built into policies for expanding the role of the public passenger service in the coming period—for, above all, the bus industry must be an industry of the future, an essential part of modern living, unless we are prepared to face virtual standstill in many of our heavily populated areas.

Road Haulage Wages and productivity in the road haulage industry are related to both the performance of the vehicle whilst it is running, and the efficient servicing, turn-round, loading, and management of full loads. It cannot be just a matter of driving fa,ster.

Wages The industry has in the past clearly placed too much emphasis upon low basic rates, too few controlled incentive and bonus schemes, and long hours of duty.

1 he enormous variation between differing types of loads, routes and distances is recognized, but clearly the principle of maintaining and increasing earnings, on the basis of fewer hours actually worked, with greater efficiency, must become a matter of widespread application.

Those employers who have argued that progress was impossible because of absolute union opposition to scheduling within a 40 mph speed limit no longer have that excuse.

But there is still far too much of the attitude that efficiency bargaining, or general progress in negotiation, is something which "can't be done in road haulage".

That kind of attitude should have been completely exploded by such agreements as that covering Esso distribution. Fawley got a great deal more publicity but in many ways it was on the distribution side that the real breakthrough came.

Prices and Incomes Board The National Board for Prices and Incomes (Report No. 48, page 17) made the comment:

"There is a marked contrast between the 'C' and the 'A' and 'B' licence holders in their readiness to devise schemes which will improve both productivity and earnings. Indeed the 'C' licence holders have been one of the most fruitful sources for this type

of agreement By comparison the 'A' and 'B' licence area is a desert although the trade unions involved are the same as those which have negotiated productivity agreements so successfully in the C licence area".

We do not think this conveys the whole picture but it is nevertheless sad that it could even be said.

C-licence vehicles

It would be wrong, however, to give the C-licence sector a feeling that everything is all right. There are major improvements which can and should be made, involving a whole range of different organization of transport.

The study: "Transport Decisions of Certain Firms in the Black Country" (Journal of Transport Economics and Policy, September, 1967) by W. R. Cook, brought out certain interesting features, including:

1. Transport departments are in general considered of rather less importance than production, marketing and purchasing departments, despite the importance of transport costs.

2. "There is a wide variation in the ability of transport managers and persons responsible for running transport, and the calibre of the people involved does not always reflect the size, complexity and importance of the firm's transport problems". Over 90 per cent of the firms questioned operated their own vehicles, so that it is of some eoncern to those interested in C licence operation that, for example: "It was clear that transport managers were not very much aware of the importance of transport in the cost of the various products they were moving. Where they had an idea of transport cost, it was a general average which masked wide deviations."

In view of the criticism sometimes made of C-licence operation, i.e. that it has many hidden costs which are not reflected in transport decisions, it is interesting to note that only a third of the firms mentioned cost as being a factor in the advantages they gained from running their own transport.

Against this background, the impact of the Transport Bill is of considerable interest. Mr. P. W. Reed, of Reading University, has argued that together with other current changes, the impact of the Transport Bill will require more detailed knowledge of costing— and not only for public road hauliers. Own-account operators, he stressed, would also need this information in deciding whether to take the opportunity to enter into the wider haulage market. Other factors he emphasized were that:—

a) The criteria to be employed by Licensing Authorities would be economic and even own-account operators would probably be called upon to produce coatings.

5) "Statutory reductions in maximum permitted driving hours will necessitate careful examination of scheduling and costing. There will be less 'trusting to luck' as regulations became tighter".

Clearly, practices which were hot good enough in the past are going to become more inadequate in the future, in both A and B and C licence sections.

It may be that the attitude on this (comparatively) small matter of transport costs is merely an expression of 'British management in general. For example, an important study of productivity in Europe recently reached the conclusion that European f management including that in Britain, was reluctant to pay for good information, and this, together with mistaken secretiveness about company decisions, meant that these have to be taken more or less "blind"! ("The disparity between rates of business earnings in Europe and the United States", Compagnie Lambert, Brussels).

Structure and management The impressive performance of some C vehicle firms cannot be disregarded, and it is not difficult to see why this record cannot be matched either by the smaller C licence firms, nor in particular by the vast majority of the general road haulage industry.

The PIB Report previously referred to makes it clear that "productivity agreements depend upon managers taking the initiative in proposals". But not only is this initiative required; a lengthy process of consideration and negotiation has often been involved.

Esso's evidence to the Royal Commission listed the timetable of its distribution productivity deal, starting in 1962 with the planning in its operations department, the commencement of discussions in June/September 1964, and the conclusion of the agreement in January 1966. In some respects the deal took five years to work out and apply.

It is understandable why the road haulage A and B licence -sections have not been able to match this, when the structure of the industry is examined:—

Number of Size of Fleet Operators per cent 1 vehicle 23,130 50 2-5 vehicles 16,000 34.5 6-50 „ 6,950 15 51-100 ., 160 0.4 100 or over 50 0,1

How can we expect management to initiate advanced productivity bargaining techniques in an industry where half the firms consist of one vehicle only ?

The pressures under which the general road haulage industry finds itself are intense. Unfortunately, the response of the industry to the Transport Bill has been extremely negative.

The attitude on quantity licensing has been understood even though in many cases there has been considerable exaggeration of the impact upon the industry, and the amount of business which might be switched to the railways.

It is impossible to justify, however, the intense and vociferous campaigning which has taken place on the question of drivers' hours—campaigning that really reflects the lack of confidence the industry has in itself to create efficiency and planning to achieve a real reduction in the amount of hours worked.

It is clear, too, that the quality aspects of the Bill have caused a great deal more opposition than many have been prepared to admit. Anxieties of many small firms that they would be unable to reach the standards of management and vehicle maintenance which will be required have tended to be expressed in general opposition to the Bill as a whole.

A more positive response must come if the industry is to take up the challenge of a modern age.

The Future

1. There must be a rapid concentration of ownership within the industry. Surprisingly, this aspect has had little attention from the National Board for Prices and Incomes in its many reports on the industry.

The Board in its first report on road haulage rates said: "We accept the view that some strengthening of the structure of the industry is needed and that this can best be brought about by some enlargement of units so that better use can be made of modern managerial techniques. We do not recommend any action from outside to this end; we merely note that as the generation which entered the road haulage industry after 1918 passes away the absorption of the small man into larger units seems likely to take place.

This does not in our opinion go far enough. In the general interest there should be a policy of rationalization, consciously based upon the development of the National Freight Corporation and the public sector.

2. Higher pay and productivity requires a more positive response from both management and unions throughout the whole industry, in A, B and C sectors. There has been too much reliance upon the idea of the Wages Council operating a low basic rate, with higher rates being determined upon "catch-as-catch can" methods, involving not the individual firm but often the individual driver.

If there is to be rationalization, it must be accompanied by a sensible partial devolution of negotiating functions to the local level, with firm and district agreements being accepted as necessary. The process is under way, but too often this is still regarded as some sort of fall from grace from the more respectable methods of national negotiation.

There must also be the full recognition of trade unions, not only for the workers but the industry itself. This basis of unfair competition has at times been the provision of higher earnings for individuals, in exchange for illegally high hours of operation and acceptance of safety standards below the desired level.

A rapid expansion of trades unionism throughout the whole industry is a prerequisite for greater efficiency as well as higher pay—especially in the present A and B licence areas.

Factors other than vehicle speed and hours

The case for rationalization,•and positive trade union/management relationships becomes even clearer if it is accepted that costs are vitally affected by factors other than those related to vehicle speeds and hours of driving, and the special limitations which the road haulage worker is bound to place upon faster speeds.

The pressure for "40 mph" scheduling both by employers and goverments sometimes ignores the different position in which the road haulage worker is placed with regard to the law.

For the factory worker, the vast majority of industrial legislation is provided as a protection, in the interests of his or her safety or wellbeing. It exists on the whole as a restriction against the employer.

The road haulage worker, however, operates under the fear, rather than the protection, of the law—in which three mistakes or contraventions can cause him to lose his job. The tachograph will extend that supervision of the law, without providing greater protection.

It is much more reasonable, therefore, that the average road haulage worker should be reluctant to agree to working conditions which place him near to the margin of speed which the law allows, that he should argue for performance standards well below the danger line as he sees it.

It is necessary, therefore, that considerable emphasis should be placed upon the importance of factors which aid efficiency without requiring higher vehicle speed schedules. Such factors are well known, and Mr. P. W. Reed emphasized this point: Own-account operators, he said, had not necessarily to minimize freight movement costs. Reliability, speed and timing might be more important, but this did not mean that non-operating cost factors must be left to the exercise of judgment and experience". A fair attempt should be made to quantify such factors, he concluded.

Better utilization of vehicles

The reduction of the number of vehicles returning empty is of great significance in this respect, but clearly this is more difficult where there are many small firms and the driver has part of his time engaged not on the job at which he is skilled, but on the managerial task of finding a return load.

In general economic terms this can be quite costly. The article previously referred to in the Journal of Transport Economics and Policy reported that firms would in some cases prefer vehicles to return empty if other loads were available at base rather than waste time looking for return loads.

The larger firms would not have to make this choice so often, since they could handle both the load at base, and have a planned return load waiting.

Other matters, such as containerization, quicker-turn-round and additional mechnical aids, point to the need for larger fleets and firms, both in order to justify raising the capital required, and to maintain and manage the business in an efficient fashion.

Increasingly, reasonably sized firms will be able to adopt sophisticated tariffs which provide a lower price for a particular job, or series of jobs if the customer was willing to organize delivery or pick-up in a manner which assisted the proper planning of vehicle operation.

The case is clear—rationalization, trade union recognition, and negotiation on a local basis.

Conclusion

The general conclusion which arises nom this argument is not novel—but it is certainly one the road haulage industry has not faced up to. Rationalization, plus decentralization of many major aspects of operation, is necessary to provide the stability and the higher level of management needed if pay and productivity are to be raised to the levels we all know are possible.