by Janus
Page 51
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Profit or greed?
THE TOP PEOPLE of any trade association have, like the original Janus, to look in two directions simultaneously. They have to keep their members happy. And they must present a good image to the public. These two birds do not always sit comfortably on the same perch.
Last month's issue of the RHA journal Roadway contains a good example of the sort of difficulty faced by the association's director-general, Freddie Plaskett. He quotes a letter from the chairman of the Central Electricity Generating Board praising the way in which hauliers have responded to the call to move coal during the miners' strike.
So far, so good. The attitude of the general public to the strike means that most would agree.
But Mr Plaskett then goes on to quote, with apparent approbation, the CEGB chairman's commendation of hauliers on the grounds that "they have not tried to take undue commercial advantage of the situation".
The RHA says that it has made sure that the message has gone to the press, though without much expectation that they will print it. That is a sensible public relations move. But surely in a journal read almost exclusively by those in the haulage business there is a lot more that could have been said -indeed, should have been said — but wasn't.
Surely Mr Plaskett should at least have queries whether hauliers were right not to exploit the situation. This is not the 1970s; profits are now scarce enough to have become respectable. Moreover the philosophy of this Government is that making profits is not only respectable but positively commendable. There might be reservations if the profits were made through the exploitation of a monopolistic position, but that is one allegation that haulage can easily refute.
In any case the Government is putting its principles into practice in the public sector monopolies. Its financial demands on the nationalised industries have recently been highlighted in the case of the water authorities. But more relevant to coal hauliers is the electricity industry. Because of the Government's cash hunger the industry has reached a point where many area boards not only have no capital debt but are actually lending money to the Government!
Whether this makes economic sense is beyond the scope of these articles. But in these circumstances it could surely be argued that by not taking commercial advantage of the situation coal hauliers were merely enabling the Government to cream off yet more money from the electricity industry.
To those pointing to the qualifying word "undue" I would simply say that in most industries any supplier praised in those terms by a customer would instantly look at his prices. The converse of "undue" is "due".
Put another way, the CEGB is saying that hauliers are not getting what is their due.
Others may argue that hauliers have a duty to help the Government out in a national crisis. I think that would be grossly overstating the extent of the problem caused by the strike. It also ignores the fact that, with the glaringly obvious exception of the railways, many other sectors of the transport industry especially small ports and coastal shipping have been making money hand over fist out of the strike.
Why should hauliers be more patriotic?.
In any case I shall be astonished if, three weeks from now, Mr Plaskett is not again berating the Government for having increased in the Budget what last year he called the "sin tax" on lorries—the surcharge over and above track costs which is supposed in some mysterious way to compensate for the environmental damage done by lorries.
The Government considers itself justified in milking the industry of a sum which cannot be specifically justified. Surely hauliers are entitled at least to charge commercial rates as determined by the market forces in which the Government puts such faith.
If this point about profitability related only to the period of the miners' strike it would be relatively unimportant. But to this observer it seems that the next task facing the RHA will be the adaptation of the industry to the situation in which Britain is no longer a major manufacturer.
The Government in general, and the Chancellor of the Exchequer in particular, envisage a greater emphasis , on Britain offering services rather than tangible goods. That has grave implications for haulage, which is a service industry, but one whose major customer has been manufacturing.
Already one part of the haulage industry is suffering from the switch in emphasis. Britain's international hauliers have seen their share of traffic drop from a peak of 58 per cent in 1978 to less than 45 per cent in 1984.
Many explanations are advanced for this, including the failure of the relevant authorities to control the entry to Britain of foreign lorries. The RHA's recent call for something to be done about this is welcome. But it is a pity that the association did not choose to emphasise this point when it gave evidence to the House of Lords in 1983.
Instead it muddied the waters by its policy switch from liberalisation to support of quotas and permits — a lost cause under any recent Government, and above all this one.
But one reason for foreign hauliers' success is the switch in trade. More and more they tend to come here loaded. Having discharged they then look for return loads at the traditional knock-down rates. Increasingly, British international hauliers are losing traffic in this way.
They are probably not encouraged to find themselves in the position of pioneers in meeting a problem that will face the whole industry before long. But it is important that planning on how to face it should start now. And it seems odd that profitability should, however indirectly, be confused with greed.
During his first three years as director-general, Mr Plaskett has rightly concentrated on getting the RHA's organisation into line with modern needs. This task has largely been accomplished—and, if an outsider is entitled to a view, well accomplished.
His task now should surely be to concentrate on the industry's commercial future. Even now there are too many hauliers who will carry anything almost regardless of price and profit. It would be unwise to encourage them.