Call our Sales Team on 0208 912 2120

Is Grouping the Best Solution?

2nd February 1945
Page 22
Page 23
Page 24
Page 22, 2nd February 1945 — Is Grouping the Best Solution?
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

WITH the sole object of improving my conception of the advantages alleged to be gained by joining one

• of the existing grouping movements, I recently attended a meeting (whic4, incidentally, was for only A and B-licence hauliers), called with the object of promoting .

the formation of a group in a particular area. In view of the president's "opening. address and his subsequent remarks, in which he intended to paint a rosy pieture of the possibilities of grouping, I have since vordered if Mr. E. B. Howes, ot,ho states in his latest article that he is " pleased and gratified to observe that at long last the industry has come to appreciate the virtues of grouping," would still have made such a statement, had he also been present at that particular meeting. I think he would have agreed with me that the feeling of appreciation to which he refers is not general, although. Ihave no doubt but that such a feeling exists amongst the group members under' his control.

At this stage let me first add that, although the advertised meeting was given the necessary publicity, the attend ance fell short of some 50 operators, whereas I am given to understand that the total for the area is in the region of some 250; this, to my mind, was the „first display of disinterest, or might it be that many haulage Contractors

do not yet realize the seriousness of their. position? [In fairness to the promoters, it is as well to point out that this meeting wa held last November; since then_ considerably more interest has been displayed—En.] I am not an operator, and would have been in no way surprised if, after being questioned .as to my interest in the meeting, admission had been refused .to .me. However,'

such was not the case, and the welcome was quite cordial, so I took_ my seat amongst the hauliers, with many of whom I am well acquainted. I must admit that, not being an operator, I felt something of an Unwelcome guest, but, nevertheless, such a feeling was not allowed to inter

fere with my interest in the proceedings or my. eagerness for education and information as to the method of formation and the ultimate activities of the various groups.

My interest was enhanced by the fact that the president of the meeting was a well-known figure in the haulage world, and particularly the grouping movement, I had sincerely expected, as did many of the operator's present, to hear something startling by way of the great advantages of the group 'movement of which :we were not already aware,but we were doomed to disappointment. This disappointment, I can assure you, was shared by quite a few of the operators, with whom I ?lave since raised the subject of the meeting and its objective. The little enthusiasm on the part of the parties present made itself apparent by the lack of immediate successful reaction to the address by the president,' wherein he dealt with the evolution of transport from the period succeeding the 1914-1918 war, leading up to the Road Traffic Acts, the Rom:land Rail Traffic Act, and, finally, the M.O.W.T. Road Haulage Organization, not forgetting, of course, the menace which was to be expected from the combines.

All to Gain and Nothing to Lose ?

It is in these combines, we were told, that the chief dangers lie for the small operator n ho did not react immediately. He then dealt at some length with the necessity of forming a group in the area.and thus safeguarding the future interests of its members, pointing out that, by joining such a scheme, these members had all to gain and nothing to lose. Failure to join, he continued, spelt disaster. When dealing with the antivities of the group, special emphasis was laid by him on his statement, which, incidentally, was in reply to a question-as to whether the group would employ

an outside representative or not, that if the group went Out to obtain certain traffic, it would not fail in its endeavours. This I thought an exceptionally bold statement—one which portends, in the absence of details ai to the method to be adopted, a definite threat to any independent haulier who does not join a group. To my mind, this savours too much of possible compulsion.•

During the course 'of conversations when the meeting had been disbanded, ,I questioned two or three of the members present as to why they thought it necessary for this particular president to be called to address the, meet .

ing, having regard for the fact that the advantages which were pointed out had in no way offered any additional attraction over and above those with which every haulage contractor must be well acquainted, suckso-called attractions having been fully dealt with from time to time in " The Commercial Motor '.' and other trade papers. From the replies to my question, mainly indifferent ones, I can draw only the conclusion that the members, individually or collectively, did not possess the courage" of their own convictions—at least, not sufficiently for them to call a meeting amongst themselves for the purpose of discussing and settling the question adequately enough for them to call a further general meeting of all parties who might also be interested. In making this remark, I am not overlooking the fact, however, that a previous meeting might have been called and the question of a group may, possibly, have

been discussed. . •

Why a Lack of Enthusiasm ?

Assuming this tO be the case, why, then, was it necessary to have to invite an independent party to occupy the seat of president, when, surely, complete details, which, am insisting, are well known amongst the interested parties, could have been put forward by almost any operator in the area? If, however, a meeting had been called prior to this one, .I can assume only that a deadlock was reached, the parties in question not having unanimity of thought. The lack of enthusiasm at the meeting which attended made itself, as already mentioned, quite apparent.

After the president had outlined the fundamentals of the scheme and had demonstrated his ideas of the alleged advantages of grouping—and he is in a position to know-lie was, obviously, greatly disappointed when the reaction to his request-for questions was far from encouraging. No operator seemed inclined to take the initiative, but merely waited for anether member to start the ball rolling. It was quite some minutes before any party ventured to put forward a question ; even then the response was very limited. Singularly enough, however, before many questions had been stated—at least, questions insufficiently comprehensive to offer a clear picture—one party proposed that a group should be formed, and, after some little time,. a further member rose to second the proposal.

In the interim, between the proposal and the seconding, however, one operator did raise an objection; this was, to my mind, a proper one, being that the proposal to form a group should not be immediately adopted, but should be delayed until such time as the hauliers themselves had called a further meeting to discuss once again all the fundamentals which had previously been outlined to them by the president.

It is with this objection in mind that I suggest that the question of grouping had not been thoroughly discussed prior to the meeting in question. Strangely enough, the chairman himself overruled the objection, stating it was too late and that the proposal had already been put forward, Furthermore, he went on, the time was ripe for a group to be formed, and, even after the proposal had been adopted, a further meeting, he stated, could then be called

amongst themselves. Needless to say, he gained his objective. The objection was then withdrawn and the forming of a group, reached its initial stages. have no hesitation in saying that the adoption of the proposal, whilst passed as suth, was by no means unaniMOUS, and, if I might be forgiven for passing -this remark, I would say that the majority of the hauliers gave me the impression of sheep allowing themselves to be led to the slaughter. This, I feel; is a true description, having already mentioned that it Was obvious that they had mit the courage of their own convictions to delay an immediate decision until such time as they were satisfied that, by forming themseves into a group, the result would prove satisfactory to all concerned_ To suggest that the obvious iatention of. the chairnian. was to bring about a satisfactory conclusion (either mutually or otherwise) then or never, presents a true picture; why, I cannot .say, as one 'must surely realize that it is preferable for every party to be completely satisfied that the policy it is proposed to adopt be a correct one, instead of rushing blindfold into a project on which policy those concerned are not unanimously agreed.

The Problem of Bulk Buying

Much discussion was centred around, a statement made by the president that one particular advantage to be gained by members of the group was that of bulk buying. One operator, however, questioned the fact as to whether the group was in a position to piirthase fuel and other materials at trade prices or otherwise; So far as he was aware, this facility was extended only to operators who were directly engaged in the industry. The president replied to the effect that his statement had foundation, in so far .as one group in which he was interested was already' enjoying the facility of purchasing-a. particular commodity at trade

rates. Such arrangement, however, we were given to understand was brought about only by .his untiring efforts at the head office of the -firm of suppliers, and the grounds on which he had been able to induce the supply at the reduced figure was the facf that the suppliers realized that they would be saving the expenses of a representative who would normally have had tocall Open each individual member of the group.

One of the operators immediately reacted to this latter remark by stating that this principle was all wrong; surely we were not assembled to deprive any party of a living? For the representative concerned, however, such was the case, and he asked the president if he realized that we' were fighting a war -for freedom and not for the purpose of placing people on the labour market.

A further point brought forward which is definitely not

conducive to co-operationgood fellowship between group ‘members, is the .abiliy ,of one or a number of members to object to an application made by another member for additional tonnage, this assuming, of course, that the modus operandi for obtaining licences after the war (when we are hoping for more freedom from control) remains the 'same as pre-193.

I should have thought that a more friendly system could he adopted, As :an example, any member of the group requiring additional tonnage could notify the other niemberrs to the effect that he proposes to make application to the R.T.C. for a certain increased tonnage, and invite from them their reactions to such an application being made; They could then get together, and, after having given the question due consideration, could make it dear, whether they proposed to object; and, if so, the grounds upon which their Objections were based. The operator -could then decide whether or not any useful purpose would be served in proceeding with his application. With this in view, however, the fact must not he overlooked that one ofthe main objects of grouping is circulation of traffic, amongst members; that is to say, they are to accept from any operator surplus traffic of which-he cannot dispose, and pass this on -to another member in need.

My objections to this move, however, are first, that an operator disposing of surplus traffic in this manner deducts from the rate ,a previously agreed percentage for commission, and the group does likewise when passing the traffic out to. the operator whose service is eventually used. As no doubt a schedule of rates would operate between the members of

the group, the haulier Who, in the case in -question, eventually carries the traffic to its destination is doing so at a figure below schedule. Secondly, and to my mind the' most in-iportant point, is that owing to the fact that such surplus traffic must be handed over due to his inability to increase his -unladen tonnage, the small haulier is being given no opportunity whatever to expand his business, and it is expected that he must be content to remain a small .haulier to the end -of his days, or rather to the length of his existence, .

One remark to which I attached great significance, and which I think has a direct, bearing on the previous paragraph, Was made by the president in pointing out that it was to behopea that the group would be in_ the happy position, within a very short period of, if necessary, purchasing any haulage concern, the proprietor 'of Which for any reason at all had not the desire or did not feel it practicable to continue in the business, I immediately felt. that if the small haulier were pre't,ented from increasing histonnage and held down, as is obviously going to be the case with at least the particulargroup in question, then the group would soon find the opportunity ripe to purchase quite a few businesses. I am now wondering it this is a point which has not.been explored by the particular group organizer, or whether -it is the ultimate object Like all those 3ylio have been attached to the industry for many years, I am quite confident that, only naturally, it is the desire of the small haulier' to expand his business. Should he not be assisted in this direction rather than prevented, although it is understood that such, expansion should neither be secured by unfair competition or at UN, exPense-Of any one of 'his fellow contractors? '

Let us now come to the que§tion of the National Association of Road Transport. Groups, which, we are led to believe, is to be the respected parent of the individual groups. We are given to understand that one of the main points of assistance to be rendered by the Association is that of obtaining return loads for foreign-based vehicles. The picture is painted that all the operator is required to do after having arrived at his destination is to report to the offices of the group in that area and collect his orders for the return load. How simple this all seems and how inviting. When surveying this attraction, let us bear in mind that the industry has for many years been subject to a great deal of back biting and a dog-in-the-Manger attitude between operators.

Imagine the situation which will arise. whena haulage contractor, arriving at a foreign base, applies at the group office for a return load at,fa time when members of the foreign-base group have some of their own. operators' vehicles standing.The transport manager has then to choose the lesser of two evils: must he support his awn members and create a journey, or =St he support the member of the foreign group, and by so doing assist him in returning to his base? This is his dilemma; whichever course he chooses to adopt will be the subject of criticism from the opposite side, and unless the action he has to take in such cases be previously agreed Upon by the Association, .a great deal of ill feeling may be caused.

Some Vital Considerations

It is impossible to avoid this sort of happening, which is likely to recur daily, and, therefore, must be explored very easefully; with the view to bringing about ,a. result which will he mutually satisfactory. Additionally, what, then, is the position of 'a haulier who, for example, whilst originating, say, in the London area, operates a service between that point and Liverpool, and for the purpose of safeguarding his interests runs an office also at this latter point, and which branch office, no doubt, ceased to function when the M.O.W.T. control came into operation? I have no doubt but that it is the desire of the operator in question to 'reopen this branch when the Ministry control is relaxed. If he does this, however, then he is either, going to tread very heavily on the corns of the group in that area or, alternatively, the group is going to curtail his activities, by virtue of their exploring the area for qraflic whiCh is being handed over to what might be termed foreigners; these are points, and important ones, which I do not thinkhave yet been decided. They 'are vital and must surely arise when the National Association is really brought into operations. My views, therefOre, on grouping as a whole are these:— Assuming that every main town is to have its own geoup, which, incidentally, will be fathered by the parent body, the small haulier must, obviously, throw in his lot, either against his better judgment or otherwise, and I can only think that his failure to join must bring about his extermination. On the other hand, if every haulier be smitten by the grouping movement and joins, what have we? `Nothing short of monopoly, that which we. are trying to avoid. In spite -.of My efforts to bring myself to appreciate that the only alternative to extinction is grouping, I am afraid I find that I cannot readily appreciate it, at least not with this method of grouping.

We frequently hear that the grouping movement is increasing in 'popularity, this no doubt because of the picture which has been painted-in its favour; at the present time it will be agreed that it is impossible to obtain an authentic view,owing to the fact that practise at present is very much confined by virtue of the M.O.W.T. control. Before it be adopted generally, however, and in connection' with long-distance traffic, I feel that all hauliers should• consider very carefully the picture in its true perspective, . and not be scared into running their heads into a noose. I sincerely hope that the foregoing, remarks will not be accepted' as a criticism in general; my remarks arc based on the information which I gleaned from the meeting men• tioned in the early part of this article. The details outlined might no doubt .be peculiar only to the groups in which' thepresident at this meeting is interested, although, if based on similar lines, other groups might also be affected in parts.

1 now venture to suggest that the difficulties which will face the smalland moderate-sized hauliers alike when we have relaxation from control could be overcome by a much more simple but equally efficient method, one in which the haulier can be assured, of the same freedom of movement, and the same co-operation from his fellow members, but lacking the possibilities of ill feeling.

I am therefore desirous, after giving the subject due consideration, of submitting my suggestions for a co-opera--, tive movement.

A Scheme to Replace Grouping

First cud foretnost, the Corporation (for I prefer to entitle it Such as distinct from a group) must be fully comprehensive. It rnuet be extended to cover, not merely an individual area, but all the principal towns in the country, the towns over which tke combine octopus has extended its tentacles. To do this, let us explore the services of each moderate-sized Operator in each town, and invite -those who, collectively, could operate the most comprehensive network of services to consider carefully the possibilities_of incorporation, incorporation of operation only, net affecting, of course, their financial standing. To make myself clear, let us assume that we intend to embrace' the following towns in the services of the Corporation—

Liverpool, London, Birmingham, Manchester, Cciventry, Bristol, Nottingham, Leeds, Newcastle-on Tyne, Glasgow, etc.

.. It Would be necessary to select from each town those hauliers who normally serve one or more of these points, so that, collectively, every service is efficiently covered town by town. For example, the Corporation would involve the services of a haulier in Liverpool who covered, say, Birmingham and London, another operating on Glasgow, another on Newcastle-on-Tyne, and so on, until all pre viously arranged points had been covered. This procedure would be adopted in all the appointed towns. The necessity, therefore, for any haulier to open a branch at a destination point does not appear, he being assured of the

utmost co-operation from the relative corporate haulier at that point.

The. Corporation to be formed would operate as the parent company, with a central office, and would be subscribed to by its members. It would carry a suitable title • with headings declaring the names of the companies incorporated, and from which companies would be drawn the necessary cominittee. The functions of the parent company would be to govern all services and to deal with matters arising from time to time affecting its members, also the efficiency of the co-operation froth members' artd custorriers' angles, and all other matters which could not adequately be dealt with by the operator himself.

The first object, to my mind, would be the adoption of a confidential schedule of minimum rates—note'carefully the reference to minimum—which rateswciuld apply to the hauliers when handed return traffic by their destination counterparts. These figures must, however, be sufficiently remunerative to the haulier, yet at the same time on an economical basis for the customer. The contractor, however, would bear in mind these minimum figures when rendering his quotations, realizing that there existed -no maximum rate, his discretion in this direction being • governed by the nature of the commodity, bulk traffic, etc.

The Part of the Small Haulier

We must now consider the part which the small' haulier

and the owner-driver would play in this protective measure, and, as regards these two sections of the industry,, here is my suggestion. With the formation of the Corporation and its ultimate success, which I do not doubt, the average manufacturer and trader would, I am sure, prefer to utilize . the services of theseindividual members, -giving the closest support possible. Their preference to this method of transport, as opposed to -the combine, would be desirable to them, from the point of view that they would be assured of the personal touch which is so essential to meet the requirements of their principals. The result, I imagine, would be such that the small operators would, of necessity, be invited to attach themselves to the Corporation for allocation to an operator in their' area who is in need of the services of one or more additional vehicles. As, no doubt, nightly trunk services would be operated with' the larger-type. vehicles, special deliveries and the need for smaller lorries would present • themselvesalmost continuously, apart from the requirements which would be necessary. for deliveries' to' isolated areas away from the normal trunk roads.

There is no point in my prolonging further this description of my propoaed scheme, as I feel that sufficient has been said for all those interested to be :able, without

difficulty, to imagine for themselves the value and possibilities of sucha move, together with the chances of its proving to be the formidable barrier Which 'is necessary in opposing the activities of the combine. At the same time however, I have no doubt but that my foregoing

remarks will be subjected to an extensive amount of . comment, comment both, against and, I hope, in favour of the suggestion. I am eagerly awaiting the reactions to my proposals, not denying the fact that these might introduce not only disadvantages., but additional advantages which might have escaped my notice.

To conclude, I appeal to M. Howes not to take exception to the views I have expressed on the activities of the grouping system, or to presume that my remarks are directed at the movement in general. I speak only 'from the knowledge which I 'gained at the group meeting I attended. I can assure him that I possess no knowledge whatsoever as to the activities of the group in which he is interested, or the approach which was made when its formation was originally proposed.

comments powered by Disqus