GOVERNMENT HA
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GE SCHEME MAY.
PROVE BURDE
ON ON INDUSTRY The vie.
HERE is a natural tendency for hauliers, when Onsidering the Government Haulage Scheme, to study • first the rates w,hich are offered. Their views of the ' scheme, thus tinctured, are likely to be more or less roseate according to their experience. On the face of it, the rates seem to offer a moderate profit, computed on a straight costplus-profit basis. The potential earnings are below those of most operators to-day, but that was only to be expected from any Government scheme.
Whatever their opinion of the rates, the majority looks no farther; many do not thoroughly examine the conditions which will be imposed upon them if they operate under the scheme. That is a fatal error, likely to cost the industry dear, for these conditions involve the haulier in such extra expense, chiefly. by way of provision for contingencies entirely foreign to any operator's commercial expenses, is to justify a demand that these rates be increased by not less than 25 per cent.
It is my firm and considered opinion that the whole scheme should be given the most careful consideration, on behalf of the industry, by counsel experienced in haulage problems, and a revised agreement drafted. First, let me enunciate what should be the governing clause in the contract. In the ffrst sentence of RH/D/14, it is stated that "Vehicles will be hired by the Minister . . ." and in para. 9 of RH/D/13, " The contract for the carriage of the goods will be between the Minister and the Carrier . . ."
According to all trade usage and, indeed, by common law, the carrier is solely responsible to the Minister and not to any third party: there cannot be any contract between a third party and the carrier. Yet again and again does the Minister seek to evade this responsibility.
Conditions of' Carriage • Novel to Consignors • For example, "Standard Conditions of Carriage" are prescribed by the Minister in RH/D/22. Many of those conditions are novel, so far as the majority of hauliers is' concerned. No steps appear to have been taken to advise all possible consignors of goods concerning these conditions. If, therefore, a claim arises in respect of loss or damage to the goods, the Minister is at liberty to avoid responsibility, which means that the carrier will, in all probability, have to meet such claims.
In para. 2 of the," General. Conditions of Hire of Goods Road Motor Vehicles," RH/D/ 15, the Minister claims the right to send any vehicle on any journey at any time, in his absolute discretion. In para. 4 it is laid down that all personnel employed by the carrier in connection with the vehicles shall be the servants of the carrier and in no circumstances of the Minister. The carrier shall comply with all legal requirements in regard to hours of work, etc.
. • How can the carrier exercise such control if the Minister has absolute discretion, and who is to indemnify the carrier if he be prosecuted for non-observance of the law in that , -matter? '
In para. 6 the Minister takes to himself the right to order repairs to be effected to any chartered .vehicle, the carrier to be responsible for footing the bill. Suppose, as is quite likely, a repairer carries out such work at a cost considerably in excess of that at which the owner could have done the
work, or hai it done: who is to settle any dispute, and who is to indeltruiy the carrier against such extra cost? There 6 no margin in the meagre profits available in the Minister's, rates for such contingent expense.
In para. 7 the Minister appears to override one of the important provisions of the Road and Rail Traffic Act for, according to that paragraph, he may requiYe the carrier to borrow drivers from other hauliers. Many readers of this journal know to their cost that such a course is not permissible. 'The employer of .he driver of a vehicle must be the holder of the A or B licence: to employ a borrowed driver is to risk the loss of the licence. The same point may be /liaised in regard to paras. 2 and 3 of RH/D/23.
The carrier is called upon, in para. 8, to ifidemnify the Minister against any liability of whatsoever nature arising out of the carriage of goods„ etc. Yet, under the Terms and Conditions of Carriage laid down in RH/D/22, there are many loopholes for claims, not covered by those conditions. The Minister is again evadinghis plain responsibility as a party to the contract of hire. So far as the carrier is concerned, there is a contingent liability here which can hardly be assessed.
Hauliers Expected to Hold the Baby Pam. 16 particularly exemplifies the "beads I win tails you lose" characteristic of the Ministers part in the • scheme. An operator of a chartered vehicle may, at the absolute discretion of the Minister, accept a back load from a merchant. If he does, he must account to the Minister for all but 5 per cent; of his takings on that return journey. In any such tre,nsaction, however, the carrier takes full responsibility. He is "in mkcircumstances the agent of the Minister." The Minister collars the " swag." and leaves the haulier holding the babyl In RH/D/16 "Terms of Payment . ." it is laid down that point-to-point mileages are to be accepted as stated in the A.A. handbook. Every haulier knows that there are many routes which, whilst suitable for private cars, cannot, by reason of low bridges, bridges unsafe for heavy traffic, and other causes, be used by heavy vehicles. The point-topoint distances, in all such cases, are increased, sometimes by a dozen or even a score of miles. If this clause stands, there is another contingent expense which the carrier must meet.
In para. 8 of the same section, and elsewhere in the scheme, the Minister takes the right to deduct, from the carrier's account, any sums due to the Minister from the carrier under any contract. This 4 a direct contravention of trade custom; I doubt if, in any civil transaction, it be legal. Indeed, in the "Standard Conditions of Carriage" RII/D/22, the Minister goes over the fence and lays down that "A claim Or counter-claim shall not be made the reason for deferring payment of any moneys payable to thq, Minister."
insurers Need Proof .Held by Minister• In several places the Minister insists that all receipt ,notes shall be returned to him for keeps, and that payment will not be made to the carrier until that is done. This procedure is likely to involve the carrier in further trouble and expense in the event of a claim arising under his Goods in Transit Insurance Policy, for insurance -companies always insist on the production of the receipt as,a prelude to the consideration of any claim. If, as may easily happen, the receipt is lost, he may have to meet any such claim out of his own pocket.
As regards the Schedule of Rates RH/D/16, experienced long-distance operators are of opinion that another line of figures iS desirable, limiting the cubic capacity of each class of vehicle. This is advisable because, as the cubic ton is stipulated as being 80 cubic ,ft., there is the risk that, failing such limitation, unscrupulous merchants may build' up loads to a dangerous height.
Coming now to RH/D/22, the "Standard Conditions of Carriage." I have already mentioned these and pointed out that there is no guarantee that the merchant has read them or is bound by them if he has not. Assuming, hoivever, that they are read and, therefore, binding, there are many conditions which seem to require amendment. From the carrier's Point of view, much depends upon his position in the event of claims arising.
For example, the Minister, in para. 6, limits his liability to 23,000 per load. It is' qiiite common, to-day, for that to be exceeded. Long-distance operators frequently carry loads, munitions of war, valued at £10,000, and sometimes. twice that. What is gOing to happen if one of these valuable loads be lost? Is it not extremely likely that the owner of the goods, finding he cannot obtain satisfaction in full from the Minister, will go far the carrier? I think it is. There does not appear to be any clause -indemnifying the carrier against such a claim.
Limitation of Liability for Damage Similar difficulties seem b6und to arise in connection with the Minister's limitation of his liability in respect of damage, The clauses do not afford all the coyer which the average experienced operator would like, and the same question arises, namely, what is the position of the cariier if the owner of the goods claims from him, instead of from the Minister?
One of these clauses (h), is particularly dangerous in this respect. It states that the .Minister will not he responsible for " Damage, destruction or loss directly or indirectly or attributable to the overloading or unsafe loading of vehicles unless responsibility for loading is accepted by the Minister under Condition 10."
Condition 10 states " The customer will deliver the goods . on to and the consignee will take delivery from the tailboard of the-vehicle. The Minister will be responsible for any loss or damage arising from the stowage pr unstowage of the goods on the vehicles, except where such stowage or unstowage is performed by the customer or the consignee or his agent by reason of the special nature of his special knowledge of the goods or of any other circumstances in which the Minister cannot be expected to accept responsibility," Taking Condition 10 first. The Minister appears in this to be endeavouring to evade an established custom of the road-haulage industry, which is to off-load the vehicle on the floor at the point of delivery nearest the consignte's premises. If, therefore, the carrier's driver follows the usual custom, and he is certain to do so, the Minister will, under clause (h) set out above, decline any responsibility for any damage or loss which may be suffered.
Several of the other clauses are equally risky, so far as the carrier is concerned, In few 'words, it is desirable that the relations between the owner of the goods, the carrier and the Minister, be more precisely defined:
Onerous Insurance I •
for Casual Haulage
In connection with contracts for casual haulage, i.e., the employment of carriers' vehicles which are not chartered, there is a particdlarly'onerous clause in respect of insurrance, for which there seems, to be no good reason. Any carrier accepting traffiC under this contract must take out-a special goods-in-transit policy, nOt with the company with which he is already insured on that account, bat with the insurance company with which he has insured his vehicle. He must pay a premium equivalent to 3 per cent.
of " the amount of haulage charges payable by the Minister to the carrier under this contract."
What this means can be clearly shoWn-only by example. Suppose the haulier insures for a nominal amount (value of the load) for £2,000 with provision in the policy for occasional bads in excess of that amount. He will pay premiums at the rate of approximately £25 to £30 per annum. Under this compulsory scheme of the Minister's, assume that the work he is doing is such as to be equivalent to an annual revenue (gross) of £4,000, as it might be, his. premium will be at the rate of £120 per annum. Why should this be? There has been no serious difference of opinion as to the cover afforded by the usual goods-intransit policy, and no reason is apparent for this heavy surcharge.
The Minister claims that his department is going to bear the cost of implementing the scheme, and that no extra burden will fall upon the industry. Neither of these claims will bear close investigation. It may reatonably be assumed that the chartered vehicles will carry goods similar to those now being conveyed by them, under the direction of their owners. The Minister will collet the revenues, at the rates now current. There will be a substantial margin, out of which he can defray the cost and still show a profit. Alternatively, the road transport of the country is to be saddled with a second set of administrative expenses, supplementary to those already incurred by the hauliers owning the vehicles, which cannot be reduced.
Expense May Outweigh Any Advantages It is very much to be doubted that the advantages which are expected to accrue from the operation of the plan will be sufficient to justify that extra expense, that addition to the already top-heavy bureaucracy the industry supports.
On the contrary, having in mind the natural tendency to waste and muddle when a Government Department interferes with commercial enterprise, it seems likely that no advantage will accrue. Hauliers already are working their vehicles to the limit of their capacity. and, if control be needed, the means are already available in the machinery for the rationing of fuel.
It has been suggested, in certain quarters, that as this scheme has, in certain of its aspects, been founded on that of the successful meat-distribution plan, it is likely to prove as economical. There is no parallel. The meat distributors had to deal with one commodity, in the handling of which specialized methods, already current, had merely to be Imended to meet a new set of conditions. To co-ordinate the road transport of the country as a whole presents a much more difficult problem, the solution of `which will not be achieved by such simple means as those which served for the earlier plan. Fortunately the scheme is not compulsory. Hauliers, therefore, • will, pending such necessary amendments as I have indicated, do well to 'concentrate entirely on the one phase which, in its operation, leaves them liberty of action. They should offer their vehicles for work under section RH/D/21, i.e., should enter only into Contracts for Casual Haulage, at tonnage rates.