46 HAVE invited you to come along in your capacity
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/ as transport consultant to assist us in the review of
our transport policy and to formulate our plans for the future," the chairman said as he welcomed me. "Now that we• have a General Election behind us, I consider the time opportune for such a review, particularly as transport has been so prominent a political issue over the past decade. Before discussing transport as it affects our particular industry, I would first like your assessment of the probable trend of transport on a national level over the next five years, on the assumption that the present Government remain in power for a full term of office."
"That is rather a tall order," I replied,. "but as you ask, I will do my best to answer. On the one hand, an, entirely non-political approach would normally be considered essential if an impartial assessment were to be -obtained, whilst, on the other hand, to ignore the effects of nationalization and denationalization of the industry—which were purely political in their origin—would be to bury one's head in the sand. However, the ultimate solution has been found —by necessity if not by legislation—in the British ability to compromise.
• " Incidental ly, the word ' trend ' you used just now was particularly apt in view of the period you mention— five years. It should not be forgotten that even if no political change of party or policy took place over the next five years, such a period would be a comparatively short time in which to bring to finality a national transport policy."
"Yes, I agree, but surely trade and industry have a right to expect some early benefits from a return to a competitive era in transport?"
"I think it would be opportune here, Mr. Chairman, to clear up any misunderstanding that may have arisen as to the extent to which competition has existed in the past and is likely to continue in the future. A recent official statistical survey of the road goods transport industry has produced—among others—the illuminatory fact that the C-licence operator is sharing equally with public haulage—however owned—long-distance goods traffic over 40 miles.
C-Licensees Keep Down Rates "The influence of the C-licence holder on the charges made by rail or road operators—whether nationalized. or otherwise—is now so great that an element of competition must always exist so long as the trader is allowed to carry his own goods."
"So what you are suggesting," the chairman interjected, "is that competition did continue after the 1947 Act through the C-licence operator and that the 1953 Act has added to, rather than re-introduced, competition by the return of the private haulier."
"Exactly."
"And what of the railways—can I expect a better service at lower rates from the modernization plans and
from the new freight charges scheme?" •
"The only possible short answer to that one is that we shall all—like the politician—have to wait and see," I replied. "But it is probably less in the realm of conjecture to say that in the five-year period you have in
c18 mind, many of the schemes for modernization will barely be under way. As regards the freight charges
scheme, I think it would be wrong for trade and industry to expect too much. Whatever its form when finally approved by the Transport Tribunal, the railways will still be under the statutory obligation to pay their way— one year with another."
And as we have all experienced this year," the chairman said with some feeling, "both the most
extensive Modernization plans and the most equitable charges schemes are of only academic interest to the trader who still has his products to deliver to his customer, whether threats of stoppage on the railways materialize or not. I appreciate that ybu may feel that this matter raises wide national issues outside the scope of your brief—and 1 agree—but must add that in arriving at a final decision on the company's transport policy, I cannot ignore the effects of such stoppages and the comparative freedom from industrial strife in road transport.
"But now let us turn to our own industry. As I outlined briefly in my letter to you, we are engaged in an old-established industry—our own company is over 200 years old, as are many of our competitors and, in fact our customers. Our product is a perishable foodstuff for which a clean and quick transport service is essential. Roughly two-thirds of our .output is delivered to all parts of Britain, whilst the remainder is sent to the docks for export."
"In your letter, Mr Chairman, you said you first began to build up a fleet-of your own vehicles immediately after the war. What were your reasons for that?
Trade--Not Politics "I know in some quarters it is suggested that the decision was taken in anticipation of the 1947 Act. That, of course, is quite wrong. With the war over, our customers were no longer going to be satisfied with railway-truck numbers somewhere en route' in lieu of our product actually in their premises on the promised day. 'So, quite simply, we. either provided the service the customers demanded or went out of business."
How do your customers order, Mr. Chairman?
"I am glad you raised that question, as it brings out an interesting point. Before the war our customers, according to their size, ordered weekly in perhaps 10-ton to 30-ton lots, for delivery the following week, the actual date and sometimes even the division of the quantity being left ,to our discretion. Today the situation is very different.
"Post-war conditions demand that 'stocks should be reduced to the lowest workable minimum and our trade is no exception. Our customers now order in smaller lots for delivery on specified dates and in some instances at specified times. Whilst we do have a few standing weekly orders, in the majority of cases we have only two or three days' notice and on occasion only 24 hours."
"And to what distances do you deliver?"
"We manufacture in six centres within a radius of 50 miles or so and deliver to every populated area in Britain. The delivery distances normally range from 20 to 250 miles, with occasional runs of 450 miles or so."
" You mentionedearlier, Mr.:Chairman, that your product _was a perishable foodstuff—obviously that must have an important bearing on transit times."
"Most decidedly so. Wherever possible we like to load and deliver the .same day, but where that is not possible, to load one day and deliver the next is the maximum time we can allow our product to be in ransit."
"On that fact alone, then," I said, "1 think that we can agree that, based on the present standards of service available, the only way to satisfy your customers' requirements would be by road transport. Whilst obviously everyone wishes to take advantage of the lowest available rate, from what you have told me the emphasis in your trade is on seri/ice to the customer."
'Neit Penny Wise " Although our trade is highly competitive," the chairman replied, "I would take a very poor view if we were to lose a customer of 100 years' standing through nondelivery in a misguided endeavour to save Is. a ton on the delivery rate. So if we agree on road deliveries for the period we have in mind, what do you advise—our own or hired transport?"
"Obviously, I must take account of the fact that your own fleet is in being and already delivering approximately 70 per cent. of your products," I answered. "As you suggested, I have already met your transport manager, Mr. Robinson, and from what he has shown me I have no hesitation in assuring you that your company has a well-maintained and efficiently operated ileet."
I am glad to have that assurance, particularly as Robinson's department does come in for criticism from time to time."
"1 have yet to hear of a transport department that does not ME Chairman. I Will return to that aspect in a moment, but first, if I may, let me answer your query our own or hired transport?' • In my view, whatever political changes may have been effected on the face of transport, there are—as yettio commercial changes which would justify my advising you to dispose of your, fleet. But you have an excellent opportunity to test the state of the haulage market when hiring for the remainlag 30 per cent of your traffic not carried on your own vehicles."
As a matter of fact, we have been approached by several hauliers for an opportunity to quote for traffic, which is one of the reasons why this review is taking place."
Give Hauliers a Chance " Then I suggest," I said, " that you would do no harm in allowing a haulier with whom you have had dealings in the past, to quote you—on a contract basis—for a proportion of the balance of 30 per cent, we just mentioned. If it seemed reasonable in relation to the costs of your own fleet, you would be well advised to give serious consideration to the proposition. Incidentally, I have for several reasons suggested that the quotation should be on a contract basis. Because your traffic is a perishable foodstuff with deliveries run almost on a time-table basis, virtually exclusive use of a vehicle is necessary to meet your requirements which are, in a measure, exacting."
"Yes, I am afraid that is the case, although surely it must mean dearer transport?"
"If I may use an analogy from passenger transport, one expects to have to pay taxi fares for taxi service, much as one would like to have it at bus fares, and the
same applies to the haulage industry. .I.tbink you would be the first to agree that too much depends on the promptness of your deliveries for you to await the chance call of a 'tramp' looking for a return load, whatever his rate might be."
"In other words, one cannot have the best of both worlds."
"Precisely,, Mr. Chairman. As 1, see it, there are two other points which, might_ he of advantage if a contract Were agreed on the lines I have proposed. The haulier would have a basis of assured traffic and a possibility of further, traffic—a bigger proportion of the 30 per cent. balance—if his service proved satis;. factory and you were so inclined.
"The second point would be g psychological ohe namely, that everyone in your own transport department would have it visibly and daily brought to his notice that an alternative was readily available, if the depart7 ment did not continue to provide results. In other words, it would introduce that element ofcompetition you hoped for earlier without introducing the unwanted element of instability which I understand is the last thing your particular trade would want?'
"Yes, that is certainly a point, and in a year or two's time, when. some of our own vehicles are due for replacement, we should be in an excellent position to draw comparisons. But, in the meantime,what sort of yardstick do you recommend us to use in measuring the efficiency of our own transport department?"
Cost and Service "I think I can answer that at the same time as I make a few comments on a point you made earlier— criticism of the transport department. The efficiency of a transport department cannot be determined on cost only or on service only, but a combination of the two. The emphasis on either cost or on service is a ratio peculiar to each particular trade and industry."
"Leaving aside for the moment the more intangible element of service, how did you find our cost-recording system compares with that of other companies?", the chairman asked.
"You have an excellent and efficiently maintained cost-recording system in your transport department and, moreover, your actual costs per mile are in line with the costs of other fleets operating under similar conditions," I replied. "But A must hasten to add, it would be possible for a situation to arise where your coSts per, mile might be lower than that of a, private haulier and yet your annual. transport bill might be larger than if all your traffic was carried byhired transport."
" You mean that requests might be made for transport which are not really necessary?"
"Particularly, I think, in the case of urgency, which normally must increase transport costs. Where all transport was hired the necessity of having to justify, a .subsequent haulage account would probably tend to curb an unreasonable request for transport. Some organizations have met that very, point by making the transport department a separate en tity--or even a separate company—rendering accounts to whatever department uses its services, in precisely the Same Way as would a private haulier.
" Whilst at this stage the present size. of your fleet would hardly justify such a move, I suggest, as my.firial point, that a periodical review a requests for transport might well provide a 'field for economies, just as Much as a review of comparative running costs."