Outraged RHA to FTA: perhaps your costs are wrong?
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PRODUCTIVITY THAT 'ANTIQUATED RED HERRING'
• Stung to defend the validity of its CAPS reports as a fair basis for rates negotiations, the Road Haulage Association has not only refuted criticisms made in the current issue of the Freight Transport Association's monthly journal but has suggested that the PTA's own "comparatively limited cost exercise may be invalid and should be treated with caution by members.
The RHA issued a statement on Monday, announcing that it had drawn the attention of the FTA to "some surprising errors which an FTA official has made in his assessment of the latest report of the RHA costs and productivity scheme. What makes the correction necessary is the concluding advice by the official that 'these average figures put forward by the RHA are quite unacceptable as a basis for rates negotiation' ". The RHA statement goes on:—
"In the first place it should be emphasized that the CAPS report — unlike the FTA's own costs investigation — is prepared completely independently by the Centre for Interfirm Comparison, and is based on a wide sample of actual costs collected from hauliers. It is significant that the statistics obtained in this way are supported by the equally impartial Economist Intelligence Unit.
"The critic has been particularly unfortunate in choosing the main target for his misdirected fire. He points out that the CAPS figures for vehicle operating costs do not agree with figures supplied to the FTA by vehicle manufacturers.
"It should be obvious that the latter statistics are irrelevant. The indices of vehicle costs in the CAPS report show the extent to which hauliers have found these costs have gone up during the year under review. Price increases by the manufacturers which have led to the rise in cost were imposed in some cases during that year and in other cases during the preceding year. No sensible correlation is possible between a manufacturer's price list and a haulier's rate for any given period.
"Perhaps for lack of better ammunition the FTA has dragged the antiquated red herring of productivity across the trail forgetting that the CAPS scheme deals with this factor as well as with costs. Clearly any economies which a haulier can make in operation will be reflected in his costs, but his productivity is governed to a large extent by such things as the efforts of his customers to hasten the turn-round of his vehicles and the efforts of the Government to improve the road system and thereby reduce congestion and delays.
"Far from damaging the authority of the CAPS report, the FTA statement throws grave doubt on the validity of its own comparatively limited cost exercise which FTA members might therefore be well advised to view with extreme caution. Its method of costing particular vehicles may be of some limited use to a trader wishing to check the running costs of his own fleet, but as a guide to economic road haulage rates it is highly misleading."
"We regard the RHA views as the predictable response of anyone whose figures have been challenged, but see no reason to modify •our comments. We shall be elaborating on the areas of difference in the near future." FTA comment