Small Hauliers inquire About "Smalls"
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QLATE a number of operators, thinking of after-thewar prospecte has, surprisingly as it seems to me, turned it thoughts to the establishment of local parcels collettion and delivery services, I say that this is surprising because, in my experience, this is the most difficult and intricate section of road haulage.
In pre-war days, the proportion of failures was greater in this branch than in any other and, frankly, I see no reason in the post-war period why there should be any great difference unless, as seems to be the generally held view, there Is such a boom in business for a period of years as will serve to set some of the newcomers to this department on their feet.
This is not the first time that I have been asked to deal with this subject, and certainlf not the first time that I have written about it in this series of articles.
Those who so lightly ask me to turn my attention to it are, I imagine, almost entirely unaware of the magnitude of the task they set, for this is a big subject. That it has many aspects may easily be demons-Crated by a reference fo the variety and types of beisMesses of this nature. At the one end of the scale there is the country carrier, whose business does not, even in these advanced days of mechanized transport, differ greatly from that of his predecessors of a couple of hundred years ago. The country carrier arranges his business according to the markets. He goes to one town one day and to •another the next, taking consignments from the customers in the neighbourhood of his headquarters to the. various markets—often enough he takes some of the customers as well.. He waits about the market all day, doing, perhaps, an emergency journey, but is generally to be relied upon to bring back a series of consignments from the market to the very people who loaded him on his outward journey in the morning.
In a sense he has few problems. He works by rule of thumb, according to an almost age-long experience of what his customers are used to paying and, generally, although he does not make a fortune, he makes a decent living out of it.
The Bijager•Umiertakings At the other end of the scale there are the large express carriers. some of them nOw operate with the railway companies; their names are household words, They are already linked together, as most people know, in what was the National Conference of Express Carriers, now associated with the Hoed Haulage Association.
In these articles, I am not concerned with either of the extremes. The country carrier has, I submit, few problems: large multiple concerns have encountered and solved to their own satisfaction most of those which will come— and will continue to come—to the smaller operators and, particularly, to those who are about to enter this branch
of the haulage business. • The first thing to be appreciated is that the size of the enterprise has an important bearing upon the problems which the operator is likely to meet. Most of those who write to me now are likely, for some time, to be the Duman; one-vehicle variety, and as such must, in the beginainge make up their minds as to which of two courses they will pursue. On the one hand such an operator may either knit his radius' of action, so that lie may make more than. 3rie round of collections and deliveries per day, or he may decide that he will Make one journey per day and go as far ifield as time and conditions will permit.
An essential condition which both at these operators east have well in mind is punctuality and promptitude in ollections and deliveries.
The second thing to decide is whether the collection and elivery round in every case shall cover the same ground or lifer, journey after journey, as to the district in which the
vehicle operates. Conditions, density of population, quantity of traffic and kind of traffic, are the factors which will have to be considered in making this decision. A town eaerier comes under the class which more or less confines his activities to a limited radius: the country carrier is the one who, as I have already indicated, varies his district
from day to day. •
I am ping to deal mairkly, in the first instance at any rate, with the townsman operator, for the letters which I am receiving relate, in almost every case, to that class of operation. In such cases, the first difficultythat the operator will meet will be that of arranging his journeys so that collections and deliveries are made at such tithes of the day as will meet the requirements of potential customers, He must be there to collect the parcels at a time when it is convenient, or, alternatively, he must deliver at times when it is convenient for delivery to be taken.
The primary objective mast be that delivery is effected within 24 hours of the time of collection. Generally, the period is considerably less than this, certainly; where the operator is desirous of confining himself to an area within _ a moderate distance of the boundaries ofthe town in which he operates. In his case, deliveries will 'usually be effected on the same day and when that is not so the collection will be made in the evening and the delivery early the next morning.
Small 'Operator at a Disadvantage
If the operator be more ambitious as to the area which he intends to cover, or if the conditions—density of population and so on—compel him to go farther afield than he otherwise would, then the operator having only one or two vehicles is at a disadvantage in endeavouring to comply with this first and essential condition which I have stipulated.
In order to maintain delivery within 24 hours over a fairly extended area, he must make use of a sorting base from which vehicles must depart and to which they must return in relays; that involves the operation of not less than half-a-dozen machines. It is in this that the large and long-established concerns have an 'advantage. It is their practice to keep the vehicles running almost continuously, using, of course, relays of drivers. It is no uncommon thing for vehicles engaged on parcels carrying to run' upwards of 120 hours per week. I know of one case where the standard period of lay-off per vehicle is, six hours per week. .
One thing which the newcomer to this business must realize from the Start is that his service will not be as effective as it should be unless he enters into operational agreements with other parcels carriers. Without that he will have to refuse parcels offered to him by his regular customers which are for destinations off or beyond his own route. So soon as he begins to refuse parcels on those grounds, the business will begin to pass into the hands of others who are better organized to deal with such traffic.
It is usual for bona-fide express carriers to enter into engagements with other carreine companies for mutual co-operation, so that parcels handed into one will be taken by the Other for subsequent delivery and vice versa.
The operator need not look upon this suggestion for co-operation with any sort of suspicion. As a rule, the arrangement is mutual, inasmuch as the operator to whom he hands parcels for deliveriesoutside his own sphere will also agree to give him consignments for delivery in the course of hie rounds.
Having decided upon the routes he will cover and the method under which he will run his business, and having made preliminary attempts to get into touch with other parcels operaters, with whom he could enter into working agreemente, the next thing he,must do is to decide, upon the .conditions under which he should accept goods for delivery. Here, again, he will find the National Conference of Express Carriers of great assistance, because, out of the wide experience of its members, a set of conditions has been prepared and generally agreed. There is not space in this article to deal with all of those conditions. All that I can do is to make brief reference to the most outstanding, coupling that with a recommendation to the operator quickly to make himself acquainted with them.
Amongst the most important of these conditions is that which limits the liability of the operator in respect of any one consignment. Under this condition he stipulates that he shall not be called upon to pay more than 210 if the consignment be lost or utterly destroyed. If any consignment is of greater value and the consignor desires to cover himself against loss, then he is requested to insure that consignment independently. In another clause, the operator repudiates any liability to loss due to fermentation, spontaneous combustion, loss of market, or damage to fragile articles, He will not be liable for articles put into unsuitable cases or packages. It is in this connection that, perhaps, the most risky part of a parcels-carriers' business occurs. He is called upon to handle a considerable number of perishable and fragile articles and if he did not pnitect himself he .might be involved in claims for damages which would occur so frequently as to take away more than he can earn in the way of reasonable and just profits.
Protection for the Operator Then, the operator, under this series of conditions, protects himself against claims for loss by the consignee arising from delay in delivery—from conditions which are beyond his control. He protects himself *against damage which may arise from the carriage of explosives, acids, or other similar commodities, and provides that the consignee shall be liable in respect of any damage caused to other goods as the result of action by such dangerous loads.
A clause in the series provides explicitly for such co-operative working, as between one operator and another, as I have already mentioned. In the event of consignments in transit being handed to another carrier, the operator concerned terminates his own responsibility for claims at the point of delivery to the next carrier company's depot. There are clauses which provide that delivery of goods must be capable of being effected without unnecessary labour or loss of time on the part of the carrier, also for a lien on goods held by the carrier against accounts due. There is, of course, that universal clause, rejecting liability for consequences due to war, riots, strikes and so on.
• The' foregoing are the principal conditions, amongst many.
I turn now to the gist of the matter which is the assessment of rates for this class of work. In this business, the operator must put, as it were, the cart before the horse. He must decide, perhaps, on the basis of what the traffic will bear, what rates he thinks will obtain custom in that
district. • Actually, the parcels carrier is in an entirely different
category, as regards rates assessment, from any other operator. His position is closely akin to that of the small shopkeeper. The latter has his premises, his furniture and fittings, his staff of employees and his stock-in-trade, which, of course, is continually fluctuating.
The expenses of a shopkeeper are, to a large extent, static. He has his rent and rates and taxes, the wages he pays his employees, the expenditure on upkeep of furniture and fittings and occasional replenishment of the same, and so on. The prices fie asks for his goods, too, are largely fixed
The factor Which determines whether that shopkeeper will prosper, or not, is the amount of business he does and that, again, is determined by the service which he renders to his customers. I am referring, of course, to the conditions which prevail in normal times when there are no such things as ration books, points, or governmental control.
If the customers of the shopkeeper be few and his sales limited it may well be that his revenue will not equal his expenditure, in which case obviously he will soon go out of business. The only way in which he can remedy that unfortunate state of affairs is to take steps to increase the number of his customers and the volume of his sales, so that his revenue first reaches the total of his expenditure and then passes it.
Charges Remain Constant
The haulier who enters this parcels-carrying business is in much the same position. He has certain overheads or establishment charges and these, I must emphasize, are much greater than those in any other branch of road haulage. In addition, he has the cost of operating his vehicles and, because, as a rule, those vehicles cover the same routes and run the same mileage week by week, it may be said that -they, like his overheads and establishment costs, do not vary. So far as the totals of these two principal items of expenditure are concerned, they are, given a particular business, practically constant.
The position now is that he has determined upon a schedule of rates, by guesswork, by •reference to the railway companies' parcels rates, or after obtaining schedules of rates charged by some other " smalls " carrier; he is, now, like the shopkeeper, dependant for his revenue upon the number of his consignors and the number of parcels which they entrust to him for conveyance.
If that revenue be insufficient to meet and exceed his expenditure, for that is what it must do if he is to make a profit, he has only one course open to him. He must find some means for attracting a greater number of consignors and increasing the number of parcels for conveyance. Whatever means he adopts to that end, whether it be publicity, personal contacts, or the employment of effective agents, he will maintain whatever success he achieves only by rendering good service to his customers.
All that I can do, therefore,•in answering any inquire from an operator as to rates, is to assess, with reasonable accuracy, what the expenditure is likely to be with regale to any particular business, and thus be in a position t( indicate the volume of traffic which is essential if the busi ness is to be a profitable one. I propose to deal with thi aspect of the matter in a subsequent erticle. S.T.R.