Call Rail Loans Honest
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Subsidy—Mr. Morton Mitchell
I " F a subsidy is to be paid to the rail ways, let the Government be honest enough to call it a subsidy." This challenge was made at the annual conference of the National Association of Furniture Warehousemen and Removers at Eastbourne, last week, by Mr. R. Morton Mitchell, chief executive officer of the Road Haulage Association.
"This will mean subsidized travel for those using the railways, but it will be available to all concerned and will be a recognized Government expenditure so long as any part of the railways is strategically necessary or commercially desirable," he added.
In no section of transport was reckless rate-cutting more evident than in the desperate attempts by the railways to recover traffic which they could not carry efficiently or economically. The railways were carrying and earning less, yet, under the guise of loans, the country was subsidizing them by an amount equal to nearly five times the sum expended on highway modernization.
If renationalization came, he warned, there could be no exemptions such as those which applied to removals before. The Socialists' previous scheme was found to be incomplete because lm. vehicles were left free of restriction. Any new plan would demand State monopoly, and any company not taken over would operate in a strait-jacket or be squeezed out of existence.
Lacking Vitality In the Socialist Party's booklet "Plan for Progress," it was stated that there were industries which lacked the vitality to respond to the stimulus of competition, or in which competition was the major hindrance to efficiency. Neither of these conditions, said Mr. Mitchell, applied to road haulage, in which rates were keen and an increasing volume of goods was being carried.
Charges made by British Road Services rose by over 25 per cent, during nationalization, and then fell by a similar amount after denationalization. So long as 80 per cent. of goods vehicles were operated under C licences, hauliers had to work economically if their services were to be employed.
The R.H.A. had protested against the dangers of too rigid licensing conditions, which might result in an A licence being treated conditionally rather than as a general road haulage permit, as intended by the 1933 Act.
Dangers anticipated from applying the principles of the Hesketh and Knight cases had not always materialized. The R.H.A. hoped that as a result of appeals to the Transport Tribunal their intentions concerning the exercise of a Licensing Authority's discretion, in the face of justifiable departures from normal user, B26 would then be indicated more clearly.
Despite set-backs, an expansion in international road transport was taking place. Mr. Mitchell said that although British delegations were always welcome at meetings of the International Road Transport Union, he felt that for too many years they had been rather in the role of spectators.
Tact and vigour would be needed if British delegates were to take an effective part in international development. This was why the R.H.A. had invited the Union to hold their next meeting in September in London.
Mr. G. Dodd, of the executive council of N.A.F.W.R., said that he was puzzled by the reluctance of the Association to allow the joint discussion with the R.H.A. of matters of mutual interest. These included operating costs, licensing, drivers' hours, selection of traffic and seasonal work. Liaison with the R.H.A. was limited.
The "virtual obliteration" of stately homes and the popularity of inbuilt furniture meant that the removal industry could not anticipate a rise in business. Necessity had become the only reason to justify the high cost of persons' changing house, and this cost admittedly included the price of removal.
There would be a surplus of removal vans, although their owners would be loath to surrender their licences. Their only outlets would be to seek other traffic. Mr. Dodd added that hardly any new furniture warehouses had been built since the war.
Antique Furniture Several delegates deprecated Mr. Dodd's forecast, Mr. R. T. Lomath held that high-quality and antique furniture would always be valued and require special transport in spite of downward tendencies in other directions. Moreover, business would be created by the construction of new blocks of offices and flats in future years.
Mr. E. G. Wright felt that there would always be room for the specialist. He doubted the wisdom of mixing loads of furniture with general goods, particularly on return journeys. Mr. D. R. Pearce considered that the future for removers was very bright indeed," basing his opinion on rising standards of living which would result in more people wishing 'to live in better homes. In reply, Mr. Dodd pointed out that the construction of new blocks of flats merely maintained the level of removal business, and that greater prosperity would lead to an increase in the amount of inbuilt furniture, which would be to the detriment of removers.
Meeting Claims for Damage
I N the event of a claim, it could be possible for a remover to tell a customer that under the terms of the contract he had signed he was unentitled to any compensation. This, however, did not create goodwill, stated Mr. G. E. J. Young, director, Bray, Gibb and Co., Ltd., official insurance consultants to the N.A.F.W.R.
It was right to cover all property moved or stored against all risks and charge customers for it. In case of loss, adequate money would be available to pay the claim, and instead of a dissatisfied customer would be one who commended the speedy way in which he had been compensated.
Covering Fire Risk This kind of insurance was not new but had never been popular. He believed that the main problem was that concerning fire risk to furniture in store. Previously, transit policies had not covered fire risk and the work involved in keeping track of and insuring various lots in store was intricate and expensive.
A new scheme he outlined avoided such difficulty. It covered property from the time of collection until delivery, including packing and unpacking, so that there was no break in the continuity of the insurance.
One of the big problems with most schemes had been establishing the value of consignments and seeing that insurance, if effected by customers, was adequate. No value except a top figure of 0,000 was given under the new scheme. Anyone with property worth more than 15,000 would, Mr. Young suggested, take the precaution of obtaining extra cover.
Adequate assessment of the value of furniture in warehouses could be arrived at on the assumption that. one lot from a private house was worth about £1,000 and would take up some 1,000 Cu. ft. Assuming a warehouse had a capacity of 30,000 cu. ft., the basic calculation would be £30,000. Doubling this sum to cover unusually expensive lots, together with a possible safety margin, would give a final figure of £75,000. Premiums under the scheme would normally be payable at £2 10s. per cent. on removal and warehousing charges, including payments to sub-contractors, but excluding inter-branch work and special risks. The cancellation clause in the new scheme was important. It provided that immediate notice could be given by an insured, but that three months' notice must be given by underwriters. Should the policy be cancelled by either party, all outstanding liability continued until the natural expiry date, irrespective that the main policy ceased to be in force.
For example, if a policy expired at noon and a vehicle had left its base before that time with a load, it would be covered until it reached its destination, whenever that might be.
Mr. Charles A. Davis, solicitor to N.A.F.W.R., emphasized that in law a remover was under no obligation to his customer except for negligence. As proof of the absence of negligence, however, was on the remover, in practice it was in his own interests to get his customer to arrange insurance. He saw no administrative difficulty in the operation of the scheme outlined by Mr. Young, but considered it advisable for customers to know the limitation of the policy and the precise terms.
In practice the burden of notifying the insurers of a possible claim fell largely upon the contractor, because . the customer might not always be aware of any damage until a removal had been completed. The contractor's name should be included in all policies. Mr. FL F. Marks, retiring president, insisted that it was important to consider principles before details of insurance were discussed. The idea of a simplified insurance scheme arose out' of a desire to reduce 28 clauses. It was necessary to avoid under-insurance, but difficult to think of any removers who had actually gone out of business because of it. He considered that it was dangerous to assume that any one load was worth no more than £1,000. A disturbing feature was that customers might become more "claim conscious." Moreover, if a remover had a bad run of claims his premium would inevitably have to be raised. This would introduce a number of administrative difficulties.
As with vehicle insurance, it was common for operators to experience spells of unusually heavy claims followed by periods during which little or no damage occurred. If during a period of relatively heavy damage, the insurer wished to take advantage of the cancellation clause and give three months' notice of the termination of the policy, the remover would find him, self in difficulty in re-insuring, which he would have to effect because many of his depositors would have paid for a full 'year's cover.
Mr. Marks also felt that many customers would not wish to be told with whom they should insure. Furthermore, the remover was entitled to ask what he himself would gain from the scheme. As he understood it, a remover's profit would be £25 on a turnover of £10,000 a year.
With one or two minor reservations, Mr. F. W. H. Winwood wholeheartedly supported the scheme. Not one customer in a thousand would object to an additonal insurance charge, but the suggested commission of 2-1per cent. should be doubled to provide a margin to ,allow for any raising of premiums as a result of a bad run of claims. He agreed that fire insurance should be left out of the scheme,-because many customers already insured their furniture against this risk.
Mr. E. G. Wright said that his company had been working the scheme. They had given depositors three months' notice that there would be a 5-per-cent. insurance surcharge, and not one in a hundred objected. He also considered that fire risk should be excluded because it was unfair to take it away from the customer's own insurers.
The scheme was of great advantage when local work was undertaken, because many customers considered it unnecessary to insure on such occasions. In the day-to-day working of the scheme, the insurers had given the company authority to deal with small claims on their own initiative and render a quarterly account simultaneous with premium payments.
Forecasting Future Cost
I N less than 20 years, the cost of a pantechnicon ,had risen from about £400 to £2,000; what would be the price in five or 10 years? This question was asked by Mr. R. T. Lomath. He justified his purchase of a body built largely of plastics by endorsing Mr. Perkins' remarks about the material's resistance to damage. Furthermore, repainting and varnishing were unnecessary.
Assuming a vehicle life of 12 years, £300-£400 could be saved by buying a plastics-bodied van. Other materials were, however, being tried for their suitability for furniture vehicles. Mr. Lomath considered it remarkable that, except for plastics, there had been no improvement upon wood or light alloy panelling for many years.
Plastics for Panelling
FEARS that plastics van roofs would become brittle because of continuous hardening had proved groundless, said Mr. Alan H. Perkins, of the Wokingham Pantechnicon. Plastics would now become popular for side panelling. Such panels withstood abrasion that disfigured metal-faced plywood. He discussed where the engine should be in a removal van, and thought that it should remain ahead of or over the front axle. An underfloor engine would mean a high frame level, which was
undesirable for removers, whilst a rear engine was obviously unsuitable. Better access to the cab and body could be obtained through doors which were not placed over the front wheels.
The day was over when the 1,000-cu.-ft. van could be considered as the largest. According to a sample analysis, in 1956 97 per cent, of vans weighed up to '3 tons, but in 1958 the percentage was only 40. Vans of 1,000 cu, ft. formed 34 per cent. of the sample in 1956 but only II per cent. last year, whilst the. proportion of 1,200-cu.-ft. vans rose from 20 per cent. to 44 per cent.
Another interesting trend concerned rear closure. In 1956, doors were fitted to 54 per cent. of vans and canopies to 44 per cent., whilst the respective ratios in 1958 were 82 per cent. and 13 per cent.
Mr. Perkins felt that although frontwheel drive could make lower loading lines attainable, it would be a long time before road gradients were reduced jo permit this type of transmission.
Instruction with Models
AFTER considering various methods, including the use of films, the Institute of the Furniture Warehousing and Removing Industry had adopted the idea of quarter-scale models of equipment, said Mr. D. C. Lofts. The cost of the scheme was £400-£500.
Models could be used to teach loading techniques, estimating and the preparation of 'inventories. Warehousing and export-packing procedure could also be practised, whilst the principles involved in the construction of suitable vehicles could be demonstrated.
Lift Vans or " Artics"?
LIFT-VAN traffic would continue to .1—d provide the backbone of overseas removal trade despite the advent of articulation. This was staled by Mr. W. G. Woodbridge when delivering a paper for his brother, Mr. L. 0. Woodbridge, to the British Association of Overseas Furniture Removers. The lighter type of tractor coupling was proving unsuitable for Continental work, he said. A warning was given by Mr. H. Gerson, Pall Mall Deposit and Forwarding Co., Ltd., London, that too great an increase in the use of articulated semi-trailers might eventually reduce the status of a furniture remover to the mere supplier of labour and tractors. At present, the Construction and Use Regulations did not permit general interchange, but if the regulations were adjusted to encourage Continental traffic a difficult situation might arise. The St. Lawrence Seaway would have as far-reaching an effect on the re-orientation of traffic flows in North America as would the setting up of a free-trade area in Europe. This opinion was given by Mr. B. D. Bernstein, Philadelphia. The seaway could reach 100m, people, and operators in Britain should keep abreast of developments. Even so, the tempo of American life would still demand road transport when traffic was urgent.