NIC
Page 38
Page 39
Page 40
If you've noticed an error in this article please click here to report it so we can fix it.
-six years strong
by Brian Cottee
BRITISH HAULIERS who are worried about the long-term effects of competition from the host of newcomers whose entry has been made possible by the new licensing freedom can take some comfort from the experiences of Northern Ireland Carriers Ltd, just across the water in Ulster. Six years ago NIC was formed from the road freight rump of Ulster Transport Authority (CM June 4 1965) which had held a virtual monopoly of road freight services—the only exceptions being a handful of licensed hauliers restricted to Belfast and Londonderry.
The UTA operations had, been losing money and the years preceding 1965 had seen a vast growth in own-account transport which perhaps could be seen partly as a commentary on the UTA's service.
In these circumstances the job of making a commercial business of NIC was difficult enough, but its establishment was rapidly followed by the freeing of road haulage in Ulster, with licences easy to come by and imposing no quantity 'control, and there were many—including some in the ranks of NIC—who could not see how this big, province-wide company could survive. But the chance to Say: "I told you so" has never arrived. Instead, NIC has gone from strength to strength, surviving dock and seamen's strikes which were particularly serious for Northern Ireland, and the trading profit has risen to nearly a quarter of a million pounds. The table on facing pageshows how the company's profit • has grown (checked a little last year)—and how this has been achieved with fewer vehicles and progressively smaller staff as the NIC operation has been made more and more productive.
In making comparisons with British haulage, it is only fair to point out one or two essential differences. 'The most important is that NIC has no interest in tipper work, which is the favourite starting point for so many newcomers in Britain.
Also, Northern Ireland Carriers has no rival of any large size, and its key position in the province's economy has perhaps been strengthened by the fact that it is jointly owned by the NI government and the National Freight Corporation. But it has• had to make its own commercial way and there has been no featherbedding.
How, then, has NIC managed not only to survive the difficult early days but also to strengthen its trading poiition in a situation, where, in a country the size of Yorkshire, there are 2000 licensed hauliers of all types (where there were virtually none at the outset) and where there are now about 32,000 own-account vehicles running? Managing director Trevor H. Thornton thinks that, basically, NIC's success has been a vindication of the theory that in a reasonably industrialized society there are enough customers aware of the value of reliable service to support a transport operator offering it, even at a premium. In general, NIC rates are perhaps 10 to 15 per cent above those of the small man, and there are plenty of rate-cutters to widen this margin when talking of specific jobs. Rates, however, are not everything and in one way the small operator's flexibility has perhaps worked against him. I was told of examples where a job had gone to a small man quoting a low rate, but the man had not turned up at the appointed time for the traffic because in the meanwhile he had accepted the bait of a more profitable job elsewhere on that day. This is not how continuity of business is built up, and it is this situation which strengthens the hand of the large, stable operators.
Happy ship NIC's expansion is reflected partly in its growth of annual mileage to over 13m, and by a tonnage growth which has come from the use of bigger and newer vehicles. It is Still organized into its six original divisions—ferry servicing, general haulage, parcels and sundries, removals, heavy haulage, and contract hire--ard these divisions still have the same general managers who were appointed six years ago. A measure, perhaps, of the happy ship which a growing and successful company can be.
Growth has been at about the same rate in all six divisions, and the present British trade recession seems not to have been felt so strongly in lUlsker; though parcels and sundries are having a thin time now. Mr Thornton's early decision to reduce the multitude of Ul'A depots to a strategically placed handful and give their managers a commercial responsibility which they never had before has paid off handsomely. It has also given the small central management the opportunity to stand back from day-to-day problems and to monitor the development and the current operations of the group more effectively.
Not only is individual vehicle costing applied to all NIC vehicles, but each manager has an itemized account of his previous week's costs and revenue by Tuesday or Wednesday, and the managing director and general manager a consolidated fleet picture at the same time. (General manager at -present is Tom Ennis, who is due to take control of the company this month when Mr Thornton retires, though the latter will remain on the board with certain special duties.) In addition to the regular weekly cost control system, top management maintains an almost constant checking system under which selected parts of the operation are, either at random or because something has occurred to draw attention to them, subjected to detailed scrutiny. In this way, potential loss-makers can be arrested at an early stage, or opportunities for development identified and exploited. This, I was assured, had proved a very valuable management tool.
Quite apart from the stimulus provided by external competitors; a degree of rivalry can occur between divisions—though management is careful to see that this does not develop into wasteful wars.
An example of this inter-divisional competition is also an interesting development in its own right: the growth of contractual hire. This, under a variety of names, is perhaps becoming commoner in Britain now but it has been a feature of NIC 's operations for about two years and is now employing more than 100 vehicles, supplied by the general haulage division, compared with about 250 vehicles on conventional long-term contract hire (usually five years) from the contracts division.
NIC's contractual hire is a service used both by trade and industry and by the ferry companies. Most of the contractual hire vehicles are in customer's livery, and may be supplied with or without driver. The main difference from full contract hire is that there is no formal long-term agreement', but an undertaking that, say, six months' notice of cancellation will be given; in fact no customers have yet cancelled their arrangements.
Lacking a long-term agreement, contractual hire permits much greater flexibility, not least in charging. Commonly the rate is based on a weekly standing charge plus a rate per mile (with a fixed minimum) which covers full maintenance, tax, insurance and the availability of a spare vehicle. Those customers who regularly put up very high mileages may be given a favourable mileage rate.
This contractual hire is certainly proving a profitable exercise for NIC and, to judge from the demand, is providing a service which suits customers. The major ferry companies operating freight and container routes into Northern Ireland are now users of the system, for example. Some customers have vehicles from NIC on full contract hire, On contractual hire and on daily spot hire, and they can find good reasons for using all three different methods.
Traffic entering and leaving Ulster naturally forms a large part of NIC's work—and not only through the ports. Northern Ireland Carriers and the Republic-owned. Coras Iompair Eireann have developed the Belfast-Dublin cross-border trunk service, while total NIC traffic into Eire amounts to 200 loads each month in addition to the regular round-trip service three days a week.
Outwards traffic is often cleared at the border to take advantage of later customs aliailability than can be ensured in Belfast, but inwards traffic from Eire is now being cleared at the bond store of Inland Clearing Services Ltd which has a 3700 sq ft building in NIC's Grosvenor Road, Belfast, depot with room for expansion to 20,000 sq ft.
The depot is to be officially opened next week, but has been building up traffic for some time and is a joint enterprise owned 40 per cent by NIC, 40 per cent by Belfast Steamship Co (a Coast Lines company) and 20 per cent by Lawther and Harvey, a National Freight Corporation subsidiary in Belfast. Like all such clearance centres the ICS facilities have to be open to all-corners. Traffic is expected to increase considerably as soon as the facilities are publicized.
The ICS bond store is in a new building which NIC has erected as part of its clearance and expansion programme on the huge Grosvenor Road site, and houses several departments concerned with the sundries work, whose parcels handling depot is centred here. There is, for example, a spacious new P.O.D. office.
About 120,000 items are handled through the Grosvenor Road parcels depot in a week and despite the present drop in traffic, assumed to be temporary, the big parcels deck is being doubled in size. This will result in a really enormous deck for loading the vans which trunk the smalls out of Belfast mainly overnight, but the sheer size will not cause problems of lengthy across-deck handling because outgoing consignments are pre-sorted and brought on to the deck at a point close to their correct dispatch bay.
Other new offices at Grosvenor Road, timber-clad and very light and airy, provide vastly improved accommodation for operating and sales staff. Three of the offices, standing side by side, provide accommodation for three rival customers, Northern Ireland Trailers Ltd, Transflash Ltd and Lovell Groupage Ltd, who use NIC haulage for groupage and distribution. A typical operation is for NIC to pick up one of their containers at the ship's side, haul it to the Belfast depot for sorting and then make up loads for onward distribution.
The Grosvenor Road depot will shortly be exceptionally well placed for trunk services, since it will enjoy a direct spur on to the new MI /M2 junction when M2 is pushed through Belfast in the near future. This road will link Belfast with Londonderry, while MI goes south to Dungannon and Inniskillen.
Since British Railways has no vehicles in Ulster but runs ferry service traffic to Belfast from Britain, NIC undertakes all Freightliner haulage on behalf of BR to and . from provincial customers and does about one-third of the Freightliner haulage in greater Belfast; the rest is undertaken by Wordie Cowan Ltd, a company formed from two long-established Ulster carriers who operated alongside UTA in the old restricted-licence days.
As a further development, Northern Ireland Carriers is also about to take over from Belfast Terminals all the NCL cartage, and is already doing NC L's clerical work and accounting. There is, however, no intention of becoming involved in the NCL marketing activity, as this would cut across the interests of some of Northern Ireland Carriers' valued customers. Belfast Terminals is jointly owned by NIC and Wordie Cowan, and the latter will be involved in future as a sub-contractor for some of the NCL traffic.
Container boom
In the past five years Belfast docks have undergone a transformation, largely a reaction to the tremendous fall-off in traffic as the expanding roll-on trailer and container facilities at Lame, in particular, siphoned off the former general crane-handled cargo. Now Larne is regarded as the unit-load port, handling mainly trailers and Lancashire flats, while Belfast is geared for containers and handles virtually no loose cargo.
The shipping companies have invested in their own container cranes and gantries—but ironically have had to sign them over to the Belfast Harbour Commissioners because private cranage is not allowed.
This container boom, too, has brought new traffic to NIC. For example, about half the vehicles used by the big and fast-growing Cawoods Containers Ltd (which this month is having keels for two new cellular 132-container ships laid in Finland) are on contract from NIC and many more are provided on daily spot hire. A lot of work also is undertaken for Containerway.
Perhaps surprisingly, the recent political troubles have affected Northern Ireland Carriers very little. A few vehicles have been burnt, and it is costing about £200 a week in overtime to maintain a safety watch on certain premises, but traffic has been affected only to the extent that new investment and industrial growth have been checked.
In fact, NIC's goods-in-transit insurance premiums have decreased in recent years, which the management ascribes partly to the way in which steady, well-controlled flows of traffic tend to militate against the pilfering and careless handling which are potential dangers when business is slack and hands are idle. Fortunately, this has been very rare.
Another interesting aspect is that vehicle accidents are down as well—partly, it is believed, because detailed information on claims and the cost of accidents has been passed right down through the company to regional managers, supervisors and foremen.
This dissemination of facts about the company's business is typical of the way in which everyone is made to feel involved in the fortunes of the company. The results speak for themselves.