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Problems of the

25th November 1932
Page 66
Page 67
Page 66, 25th November 1932 — Problems of the
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Which of the following most accurately describes the problem?

Keywords : Haulage

HAULIER and CARRIER THERE are "Sermons in stones, Books in the running brooks" —at least, there are if we are to believe Mr. William Shakespeare.

Sermons on these pages are not, according to my experience, of much use. Example is better than precept. I find that my readers, when they are not bringing their own problems to me, like to hear something about their fellows in the haulage industry. This week I am going to tell several little stories, all true in substance, although the facts have been altered sufficiently to ensure that no confidences are betrayed.

First, there was a man who has been in the haulage industry for over 50 years. His business was in a small town and was mostly that of furniture removing. In his way, and according to the scopewhich the

• locality offered, his business was a success—until recently. When I saw "him he was looking for other means for making a living. His furniture-removing business was being taken from him by others, who were doing the work at prices which could not show a profit.

The Effect of Financial Stringency. • It was evident from what he told me that even his old-established reputation and the quality of the service that his customers received from him, were failing, in these bard times, to offset price reductions which competitors were making, regardless of whether or not the rates quoted were economic. He described interviews that he had had with customers, and it was evident that, whilst they appreciated the value of his services, they were compelled, because of financial stringency, to take the risk of being served by unknown furniture removers in order to save cost.

The rest of the conversation and the suggestions for new business which were. discussed need not be described.

About the same time I had a note, from an authoritative source, of a bankruptcy in that town. A haulage, contractor and furniture remover had gone out of 'business. It was quite obvious, in reading the statement of affairs, that this haulier, who had been in business for only a couple of years, had failed simply and solely because he was working below cost.

The second narrative relates to an inquiry from a haulier who had an idea that a competitor was ratecutting. The work involved was the cartage, for a county council of materials for road-making and, the like. He asked me first to check his price and then to tell him what I thought of the rate at which the work had been awarded to. his competitor.

Charging Less than Cost.

I examined the figures and found that, according to ordinary standards, the net cost of haulage. was 3s. 4d. per ton. Taking into consideration, however, the fact that this haulier lived. in a country district, resulting in certain of his cost figures being affected, and because his provision for maintenance was a favourable one, I again .worked out the figures and arrived at an irreducible minimum of Zs. 6d. per ton as the net cost of operation.

The price which this haulier had actually quoted for doing, the work was 2s. 2id. per ton, but it had been awarded to a competitor at is. Old. per ton. Comment is superfluous : now for the third tale.

Another ,haulier was proposing to enter into a

contract for long-distance haulage. The work involved the cartage of 4-ton and 5-ton loads over a mileage totalling 1,200 per week. He had himself calculated -the probable cost and profit, and had arrived at the most favourable conclusion that he would be able to make at least £5 per week profit and probably between 16 and 17. The whole of his calculations were based on the operating cost of a 21-ton lorry which he proposed to use. Naturally, I refused to have any concern with such a project, and that concludes my third story.

Another haulage contractor had been in business upwards of a dozen years. His vehicles, when he started were model-T Fords, which were excellent propositions at the time and, if they were being made to-day, would still be excellent propositions, so long as their limitations were fully appreciated.

When he came to me with his problems, he was still using his original vehicles. His profits had, for some time, been negligible, largely, as I discovered, because of the cost of maintaining his machines. Unfortunately, he had hung on so long, notwithstanding these increasing costs of maintenance and repair, that he had depreciated his available capital to such an extent as to make it almost impossible for him to consider the purchase of new vehicles. His old ones, obviously, had a value which was negligible, even in the part-exchange market.

That is the fourth and last e this week's stories. They illustrate, each in a different way, the outstanding weaknesses of the haulage trade.

Havoc Wrought by Rate-cutting.

The first shows the havoc that can be wrought in a small provincial town by the futile operations of a newcomer to the industry, who fondly imagines that he needs only to cut prices for a year or so in order to obtain a footing, to push his competitors out of business and then to establish himself, and moderate his prices according to his new conditions, making up for the time and money last in that opening year.

In this case, the interloper has not only ruined himself and lost the modest capital with which he started, but has created a standard of values, for haulage in the district, to which the old-established and moreknowledgeable competitors cannot descend. Moreover, they are finding it difficult to raise the standard to the minimum economic level, where it stood when the novice came upon the the scene.

The second one puts me in mind of an old adage which is worth quoting, because it is so applicable to the haulage industry, particularly in view of present conditiOns.

"He who knows, and knows that he knows, is a wise man.

Follow him.

He who knows, and who knows not that he knows, is asleep.

Wake him. He who knows not, and knows that he knows not, is simple.

Teach him.

He who knows not, and knows not that he knows not, is a fool.

Shun him," The quotation seems to be apt, but I must admit that I am not quite sure into which category the principal figure of the second story falls. I would not like to place him in the last one. That, at least, would be too harsh a judgment. Yet; although he certainly "knows not" the cost of his own haulage—otherwise he would never have quoted the figure that he has— his action in coming to me for guidance argues at least some sort of admission that he is aware of his ignorance—at any rate, there seems justification for me to follow the recommendation to "teach him."

"The Curse of, the Industry."

The third story exemplifies the curse of the haulage Industry to-day ; the man who hopes to cut prices by deliberately and grossly overloading a vehicle of the "30 m.p.h. type." Loath as I am to accept any suggestion of Government interference, I would, at least, welcome some modification in the Road Traffic Act which would positively end that misuse of commercial vehicles.

So far as the fourth example is concerned, I think it points its own moral. It is just as necessary for a haulage contractor to keep his vehicles up to date as it is for the motor manufacturer to keep abreast of the times with the design of his chassis. S.T.R.

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