The Wise Men From the East
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ON page 79 of • " The Commercial _Motor." dated March 3, appeared an announcement en titled " Eastern Area ARC), and Post-war Planning." If any haulier reader has overlooked it, or read it without due. care, I advise him to make amends and to rectify his omission. More. I suggest that, having studiea it, he writes to the Editor and expresses his views.
In my opinion the proposals therein embcidied comprise the soundest and sanest suggestions for after-the-war planning of the road haulage industry that have yet been promulgated. I fastened upon it at once and took immediate steps_ to ascertain how far it represented the views of the rank and file of those operators, great and small, who live in the Eastern Counties. The results of my investigations far sur passed my expectations. If ever an association resolution really represented the views of the bulk of its members this is it.
Proposals Thoughtfully Prepared
Moreover, the proposals have not been hastily devised and as quickly approved and published. On the contrary, they have been the subject of careful preparation for weeks, and have bee'n considered, criticized, amended and finally approved only .after direct consultation with every sub-area com,mittee throughout the Eastern Area.
That, as a matter of fact, was bound to be.' They cut right across the policy of A.R.O., as voiced and followed consistently for the past five years.
Now, whilst, my opinion of these proposals, expressed above, concerns all of them, I am, quite naturally, most interested in that part which refers to the question of rates stabilization, • and in order to ensure a full understanding of what I am about to write concerning that; I will quote it in full.
It states that: " In the opinion of the Area, statutory control of rates would be opposed to the best interests of the industry. Rates agreements should be entirely on a voluntary basis where they are considered necessary or desirable. The Committee has no evidence that trade and industry are desirous of a nationally enforceable rate schedule for road transport and is of opinion., that if any attempt be .made to enforce one, it would lead to a large increase in the number of vehicles operated by ancillary users, with a corresponding reduction in the tonnage available to the hire and,
reward section of the industry." • I endorse and fully support every word of that proposal.
It is my view that, if the Council of A.R.O. was to take the bold and openminded step of -circulating these pro.posals to all the Areas, and if, in every area, the same painstaking and thorough methods of investigation were to be adopted as were applied in the Eastern Area in connection with these proposals, the result would be an overwhelming vote in favour of them—.
certainly in respect. of the one concerning rates.
Indeed, I have, from one area at least, support for that view. Here it is. " Neither a national rates structure nor licensing courts are necessary providing employees in the industry are fairly remunerated, a standard of vehicle fitness enforced, the rights of third parties protected and the industry agrees to conditions of carriage to apply to all traffic."
That statement was made in October last by Mr. B. Winterbottom, secretary, East Lancashire , Area, A.R.O., for whose opinions I have the greatest respect. Besides being an able association secretary, he is also an experienced haulier and an 'accountant. The first qualification gives him a wide and intimate knowledge of the personnel of the industry; the second ensures that he is clearly acquainted with the operation problems of the haulier; the third precludes him from holding any false ideas about rate-cutting and rates fixation.
It is beyond a shadow of a doubt that there are many in the industry holding similar opinions, certainly as regards the problem of rates fixation.
History of Stabilizing Rates It is only fair to point out that the industry, of itself, did not 'originate this idea of stabilized rates. The Transport Advisory Council, In its Report on Service and Rates, in 1937, recommended that road hauliers should build up a rates structure for their own industry, That recommendation, if I remember rightly, was more or less endorsed by the Ministry with a coven. threat that, failing the production, by the industry, of an acceptable structure, one would be forced upon it.
In any event, the idea seemed, at the time, to be a good one. The C.M.U.A. and A.R.O. set about the task of building the struct are almost immediately. As Rates Advisor to A.R.O., I took some share in the work A threat -of action by the railways, implied in the " Square Deal " campaign, accelerated the process and, incidentally, diverted it into wrong channels. The Road and Rail Central Conference was formed, with its '12 area committees, Road and rail were to work together, and have worked together for over four years, on this problem of stabilizing rates for the industry, That they should so combine was fundamentally wrong. Moreover, it was in direct conflict with the recommendation of the T.A.C., just referred to, which was that the rates should be arrived at " in relation solely to factors affecting road transport, rather than by attempting to relate them to rates prevailing in other forms of transport." In that combined 'effort over 100 representatives of the haulage industry and a like number of railway men have been engaged for four years.
I claim to be in a better position th-an any other outsider to report and comment upon the work of the Conference. First, because, by courtesy of Mr. R. W. Sewill, chairman of the Road Section, and Mr. A. E. Sewell, chairman of the Rail Section, I was admitted, to many of the inaugural meetings of the area committees; secondly, because of my close contacts With so many haulier members of these committees. I have also, as occasion and opportunity arose, interviewed both chairmen and been informed of the progress being made.
Rates Structure Difficulties I am convinced that the Conference has, as the result of its painstaking efforts, one achievement to show: it has made it crystal clear that it is impossible to draw' up a practicable rates structure for the road-haulage industry. Proceeding by a different route, that of personal and independent research, I have come 'tothe same conclusion. 3/tuch of the publishable results of my observations appeared in a long series of articles in this journal, commencing July 7 last year. I showed that local haulage rates could not be fixed on a national basis. because of differences in local conditions. I .demonstrated that long-distance haulage rates could not be stabilized, at least on the ton-per-mile basis, because of the wide difference in traffic density and potential earning capacity, as between one route and another.
But there is a qualification to the statement that rates stabilization for the road-transport industry is impos=` sible, and herein lies the crux and the danger of the whole movement, A rates structure is impossible so long as the industry continued to exist in its present form.
' It "is impossible because the differentiation between one traffic and another and between one route and another— that differentiation which compels variation in rates—would bring hardship to one and colossal profits to another if rates be stabilized. That condition prevails only so long as hauliers are many, some of them operating less remunerative traffics and routes, others on more profitable
work. ,
• Do away with individuality and Convert the industry into one huge combine, or series of combines, and that obstacle to stabilization disappears. Each combine will be large enough to
pay for the poor traffics out of the proceeds of those that are profitable. Now reverse the process. Authority and the, railways combine to enforce stabilization. It is immediately shown to be impractitable. Let it, then, be made practicable in the only way in which that is possible, by compelling combination and the elimination of the small man. From combination it is an easy step to railway control and the re-establishment of a transport monopoly.
It will be a bad thing, alike for this country and for our industry, if that be achieved. Prosperity after the war will be possible only if economical and efficient transport be available for trade and industry. Road transport, as at present constituted, provides that economy and efficiency. Monopoly will not.
What, then, is the alternative to a rates structure? I give the answer from conviction arising from careful research. It is free • competition amongst hauliers, each operating in a businesslike manner and charging such rates as will show a reasonable profit on outgoings, without regard to the next man, and certainly without regard to the railways.
In this respect hear also Mr. R. W. Sewill, in May, 1943. " Between the two wars there were certain features,
notably the uncontrolled competition in rates, which few people would wish restored; ,on the other hand, nobody could deny that transport (luring that period had been efficient. Competition from long-distance road services brought about immense improvements in railway operation. Refinements, such as the insulated van for meat were introduced, and goods transport by both road and rail was greatly speeded up."
The Railways Cannot Win If. . .
The railways will fight, but as they are fighting anyway that does not affect the issue. They cannot win so long ' as the industry consists .of thousands of small operators, provided these operators secure fair and unbiased treatment under the Road and Rail Traffic Acts. Once the industry solidifies into a few large combines, it will become vulnerable to attack by the railways, and the end will be in sight. Hence the desire for stabilized rates and the consolidation which must inevitably ensue.
Nor should the plea that the railways are essential, and might suffer from free competition, be allowed to carry weight. They may be essential, up to a point. Reorganization, both of capital and structure, so that they are better equipped to carry on under
.present-day conditions, will enable them to exist" and to pay dividends commensurate with the actual written-. down capital value of their assets. It is for them to put their own house in order.
In conclusion, one more point—a significant one, almost entirely overlooked by the industry. Most of the hauliers who still advocate statutory rates do so with one idea in mind— that it will end the practice of ratecutting by hauliers. It will' do nothing of the kind.
Statutory rates will be maximum rates and hauliers will -be penalized only if they exceed them. " No Government would dare to fix minimum rates as statutory," was, in effect, a statement which I reported some years ago as having been made by -the then Minister of Transport. It is true that he denied that he meant what I said he meant. That does not matter: the fact remains, that no Government dare. In other words, when rates are fixed, hauliers will be able to cut themk without let or hindrance.
So there goes the last defence post of those within the industry who still imagine that statutory rates are worth fighting for. And, if anyone disagrees with me; let him write -to the Editor of " The Commercial Motor" accordingly.