WHAT IS WRONG WITH ROAD HAULAGE
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Rates are Too Low, There is Not Enough Co-operation, Congestion and Strikes Cause Losses, and Disreputable Clearing Houses Prey on Hauliers
By T. G. Gibb,
Chairman, British Road Services
WITH the General Election well behind us and the Commercial Motor Show opening today, the moment seems opportune to have a good look at the condition of the road haulage industry and to state a case for the professional contractor. There is plenty to be said and much of it has probably been held back too long for one reason or another.
There is no doubt that the future will bring its ups and downs on the political front and, to some extent, it would be a dull world if it did not. Furthermore, if transport so slid from the public eye that it failed to attract regular attention, we might well feel that our industry no longer held the place it deserved and that our importance was not sufficiently appreciated. For the moment, however, we all know approximately where we stand, and the firmer we stand together the better. It can hardly be said that road hauliers (and in all.I say I include British Road Services as such) have presented a united front in recent times, and to this some of our present difficulties can well be attributed.
Self-inflicted Wounds Although there are many outside influences which -affect the prosperity of the industry, there is no doubt in my mind that many of our own failings have contributed to its present condition, which certainly cannot be described as wholly satisfactory. It has to be admitted that this is hardly a prosperous time for the professional transporter, whether by land, sea or air. We hauliers, with a few plums still available here and there, live, nevertheless, in lean times.
First we should look at the outside influences that tend to work against us; then we may well be better equipped to see what we can do within our own organizations to close our ranks and to put our own houses in order.
While the Bank Rate fluctuates in a way that leaves the common man unsure whether he is meant to be prosperous or on the brink of disaster, the fact remains that the industrial output of traffics required to be carried stands at a comparatively high level, and if ever there was a time when the professional haulier ought to be doing reasonably well, this is it. Yet industry by and large pays an inadequate amount for the carriage of its goods. And it succeeds only because it is allowed to get away with it.
There is nothing new in competition between rail and road; that has been with us for more than the generation in which we live and there is little change in the general pattern. Railway managements have for a long time cast disapproving eyes on the amount of traffic being transferred to road. It is reasonable that they should do so, and it is reasonable, too, that they should do whatever they can in an attempt to arrest this trend, by going all out for the retention, as well as the increase, of their business.
Rates at Rock Bottom • Equally, the road haulier has enjoyed the trend in the opposite direction, and it is reasonable that he should endeavour to maintain his position. The least satisfactory part about all this is that the joint effort of the two sides should result in rates becoming so low That the element of profit has nearly disappeared altogether.
While the tug-of-war goes on, both sides are losing sight of what is a still greater potential abstraction of their earning powers; the " do-it-yourself " habit.
This habit has been spreading in all directions for many years, urged on by different motives. Those of us who build our own boats from kits are prompted by what we like to call the fun of it. If we are honest with our costings we know quite well that we do not save much money that way, but, when it comes to transport, it is rather easier to see some of the advantages and arguments that come readily to the trader's mind.
First, we must appreciate that, just as every one of us likes his own car, so every concern really at heart likes its own lorry with its name painted on it. Having got that far, and having• accepted that there is a desire to justify the need, we must admit to the general convenience of Works-owned transport (although there are some inconveniences, too). There is also a modicum of advertising value, but, like much other advertising, this is difficult to assess.
Then there is the overall cost. No manufacturer in these days likes going far along the road of paying more than he need. There is, however, always this difficulty in relation to the cost of C-licence operation: it is not fairly comparable with the cost of using professional public transport. Anyone who buys machinery or equipment of any kind does so to the extent that he knows or hopes that he-will be able to keep it fully occupied, and that goes for lorries.
While a lot is said about the wasteful economy resulting from C-licence vehicles having to return empty; that is by no means true and relevant in many cases and, even if it were true, it would be largely balanced by the fact that the outward half had been planned on a fully laden and regular basis.
But many of us who have to make our living out of transport are inclined on occasions to doubt the accuracy of the C-licence costs shown us by our' friends. We feel that there are odd items which we would have included, but are found to be missing. We must remember, though, that these costs are usually based on the most desirable form of operation.
Although the operations of some hauliers can be planned on scheduled services with a known traffic flow, the whole basis of public haulage contracting by A-licensees is.that they are prepared to take anything anywhere at any time. As, even if we wanted to do so, we cannot change the C-licence system without advocating legislation, let us accept the position and see in what way, by separate or joint co-operative effort, the professional contractor can improve his " productivity."
As I have said, few manufacturers are prepared to go far along the road of paying more for a service than they need to do. Therefore, the haulage contractor's first aim must be 'to provide the same service and the same convenience at no greater cost.
On the other hand, it is most important in these days "to get it properly understood that the more the use of C licences expands, the more expensive will it become to carry the balance of the traffic which cannot be fitted into the trader's own scheme of things. If industrialists continue to take unto themselves the most convenient movements, they cannot expect contractors to carry the inconvenient loads at the same price.
Make Services Attractive
We must, nevertheless, make our services more desirable to the trader. So what exactly have we to combat? The survey of C-licence vehicles produced by the Traders' Road Transport Association last autumn tells us a lot about why the vehicles are used.
Table 3 of that survey is even more specific, in that it sets out the reasons for using C-licence vehicles in preference to hired road haulage. The fact that this table has never been intelligible to me is not important, though it would be pleasant to understand how the percentages are really arrived at.
The important thing is that 68 per cent. of the (weighted) votes cast indicated that speed of delivery and certainty of timing were the reasons why members of T.R.T.A. who voted used their own vehicles instead of hiring. That I find very difficult to understand, because—other than in the parcels field, where we know traders expect a lot more than they get and more than they can reasonably hope for at the price—one thing for which road transport, as supplied by the professional, is really outstanding is its speed of delivery and certainty of timing. If that really is the main factor in the minds of traders, we hauliers can take heart, as it means that the obstacles to our meeting this form of competition are not very great.
We have always said that we can meet .any reasonable service demanded of us, and I can think of innumerable occasions on which customers have been to us with last-minute and difficult requirements which have invariably been met. So it would seem that the main alleged preference for a Clicensed vehicle is a service which we can well provide—and, in fact, do provide, day in, day out.
In the table to which I have referred there are other reasons given for using ancillary vehicles in preference to hired road haulage, of which cost comes second with 44 per cent. The survey goes on to "reveal beyond dispute that it [cost] is secondary to the vital need to give service to custOmers," so that, in our arguments with our friends who threaten to put on their own vehicles, all we need to do in future is quote this survey and remind them that cost is not so important as the service, which they know we can provide so much better than they! While accepting that the other reasons mentioned in the table have a "convenience" value, there are few which are not covered by the service which every haulage contractor normally gives to his customer.
Users Must Pay Having proved that what traders really want most is exactly what we hauliers can so easily provide, I look forward to their taking immediate steps to reverse the present trends and put much more business in the way of professional transport, thus doing much to restore the profitability of our general business without our having to increase charges to a level that would probably hurt us all. Increase charges to some extent, of course, we must, as the transport industry has been carrying a measure of inflation far too long, and there must be a limit to what can be absorbed. In my opinion this limit has already been exceeded, and industry must accept that, while prices of most commodities are continually on the rise, something must be reflected in transport charges.
In the past five years traffic congestion in suburban and dock areas (particularly in -London) has built up to a marked degree, and this has increased the cost of haulage. Industrial unrest is another cause of additional costs. We in British Road Services have had our own troubles, but, in common with all other hauliers, we also suffer because of labour difficulties experienced in other industries.
Strikes at the docks and in the motor industry hit hard at our profit margins, and I think I am being more realistic than pessimistic in saying that in costing general haulage the professional haulier would be prudent to make some provision for these losses: At the present time there is certainly no margin in our charges to cover these losses over which we have no control. Most manufacturers are charging more for their wares, and are flourishing; there is no justification for carriers, meanwhile, to be receiving less than a fair price for the service they perform.
Somehow, among ourselves, we must find some-solution of this charging problem. This ought not to be impossible, nor do I think that a solution is out of our control. We must effect a measure of stabilization, not by rigid price control, but by a genera! acceptance of standards of .service, wages and charges.
In our more politically aimed remarks it has always been easy to accuse the other man of being the one who cuts the rates, and to declare one's own intentions as being concerned only with maintaining the level of charge. The truth is that we in B.R.S. feel that not only have we endeavoured to maintain a reasonable price level (however much we may have been dragged gradually from our shelf), but also that we and others can and should achieve some sort of position as steadying factors in the future.
Costs Must be Watched
Above all, we must watch our costs. The transport industry, like any other, is subject to the working of Prof. Parkinson's second law—expenditure always rises to meet income.
\I say unashamedly that we must have more money for what we do, and I cannot avoid adding that we might all be better off if the Road Haulage Association and others had not been so proud of the degree by which private enterprise would lower rates. B.R.S. are by no means alone in thinking rates have gone too low.
Janus has complained in The Commercial Motor of the inadequacy of the B.R.S. figures which could be extracted from the British Transport Commission's report, but those that he did succeed in extracting were sufficient to show that, to say the least, our level of profit was not too high. So, in the matter of charges, we are desperately anxious to go along with our colleagues in the industry.
There is much which the R.H.A. and the larger independent operators G9
might do in this respect. There will always be in any community the undisciplined individuals who are ready to kick over the traces, but, taken as a whole, everyone must wish to see proper standards of employment, operation, service and charge in the industry. This can be achieved in the end only by a large measure of co-operation.
One of the biggest niggers in the woodpile of charges is the network of clearing houses, providing a service certainly, but not concerned in any way with the ownership and operation
of vehicles. They have nothing on risk and they can hardly do other than undermine a reasonable level of haulage charges.
Bad Clearing Houses In saying that I am not launching an out-and-out attack on all clearing houses. What I am attacking is the appearance and the growth of clearing-houseorganizations which have no interest in the well-being of hauliers, without whom they could not operate.
It is essential that all hauliers, and the R.H.A. if necessary, should achieve a control which will compel clearing houses to give a rate acceptable and profitable to carriers. Failing that, hauliers should not work for them. Although B.R.S. and many of the larger groups do not need a clearing-house organization, they can play a useful part by sub-contracting work, and by providing back loads for those they have employed.
If we can get our charges right, there is so much more that we can do for the general good of our industry. No one has ever seriously disputed the ability of the haulier to give an excellent service to his customer. It is the product of much individualism over the years and, while the kind of initiative that has built it up must continue if the industry is to flourish, there are many matters concerning future developments which have a social background to them.
Roads themselves have come very much into the public eye in' recent years, not only because of the accident ratio, serious though that is. There is the acute congestion and all the frusttation and delay that go with it, both in the country and the cities; there are noise and dirt; and there are the general conditions of employment of those who spend their lives on the roads or serving them. In all this there is. still much to do.
Vehicle manufacturers are producing a nearly perfect article and, although scientists will no doubt have more in store for us, it is hard for the moment to see great scope for future Gl development of the machine itself. It is, though, still possible to set a higher standard of vehicle operating efficiency and maintenance.
There is a wide gulf between a vehicle which is positively unsafe for the road and one which is fully efficient, but one cannot help feeling that too many of the vehicles on the road today are too near the wrong side of that gap. This takes us back to basic facts that to make the job pay the present need is to operate so long and so often that the time, let alone the money, for adequate maintenance is just not there.
When it comes to time spent on operations, ought not all' hauliers to be thinking of means to achieve a shorter working day? There is still a tendency to regard a legal maximum of permitted driving hours as a standard requirement both on the part of hauliers and customers, the latter in many cases having accepted for their own staff a much shorter working day and week than they expect from their transport contractor.
Shorter Working Day
B.R.S. have made a move in the direction of shorter hours by the introduction of a normal maximum day of 10 hours. I would like to see the association of a proper work output with a much more reasonable working day. The customer, together with those who maintain terminal facilities at docks and other places, would need to help in reducing the time now spent in loading and unloading and eliminating, so far as possible, existing delays.
No survey of this nature would be complete without some thought being given to ensuring for the future the right type of man for both management and operations. The right men can be attracted—and retained in this era of competition for labour—only if there are real prospects of a career, accompanied by reasonable conditions and pay.
Career prospects must be made evident to the youth who is leaving school or the young man leaving the University (if there is to be opportunity for him), for that is the Stage at which careers are largely determined. Prospect of a worthwhile career really means that progressive steps are provided, and this in turn implies that training is given to qualify for promotion.
In road haulage this question of training—that is, formal training, as opposed to picking up the rudiments of the job from practical experience—is a difficult one. The Royal Society or Arts and the Institute of Transport examinations provide some yardstick, but it seems necessary for the industry to consider whether some form of special qualification can be devised in respect of subjects peculiar to road haulage.
Encouragement would need to be given to students entering for appropriate examinations. In the early stages this might well call for some form of day release to provide facilities at technical colleges. Something suitable certainly could be devised if there was a will on the part of all hauliers, but it is certain that if provision is to be made for the future of the industry, enlightened hauliers must play their part in selecting, training and encouraging the right type of entrant.
The men who were successful in creating this industry as we recognize it today were the sort who made light of their difficulties. In most circumstances that is a commendable trait; but it is not commendable if the solution of some of our present problems is in our own hands. The lean times in which we live are largely of our own creation. The answer is to put our own houses in order, make our services more desirable to the trader and have a realistic approach to what is a fair charge for the job we do.