Waller Gammons
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Replies to Our Trenchant Criticism of
CLEARING HOUSES
He says:
"Everybody Who has Seriously Investigated the Matter, Including Mr. E. B. Hutchinson, in His Stringent Inquiries, Concluded that the Clearing House is Essential for Long -distance Work."
" S.T .R.' Paints a Black Picture of the III-managed Clearing Houses and the Editor has Added the Finishing Touches, but the Picture is Not Black Enough."
IN view of all that I have written, especially during the past 10 years, on the above subject, I had really decided not to trouble my head any further about it— it seems almost a waste of time—but in consequence of the able article by " S.T.R." in the issue of The Commercial Motor dated August 5th, I feel constrained to offer a few observations.
Before doing so, however, I would respectfully suggesz that the clearing house is not the adjunct of the haulage industry. Ostensibly, the clearing house is a haulage contractor, but in practice it represents various trading and manufacturing concerns, and employs haulage contractors, and so long as it retains the confidence of traders and they choose to use it as their agent, I submit that no association can stop it from functioning.
However, if there be one thing that I am pleased about, it is the fact that, apparently, at long last it is generally conceded that the efficient clearing house is essential. As a matter of fact, I have never yet seen the utility of the clearing house seriously questioned; most criticisms have been in respect of the abuse. Everybody who has seriously investigated the matter, including Mr. E. B. Hutchinson, in his stringent inquiries, concluded that the clearing house is essential for long-distance work.
The Function of the Clearing House.
It seems almost superfluous to point out the advantages of the freight agent to the manufacturer and trader, but there still exist people, especially large haulage contractors, who try• to ridicule its utility. It cannot be gainsaid that if a trader (particularly the large man) decides to use road transport for his commodities all over the country, he can obtain proper service only by employing the freight agency. Of course, the agency selected may be a concern owning some vehicles, but that is no advantage to the trader.
There is, of course, no haulage contractor, say, in London, who owns sufficient vehicles to cope with all the traffic of even one of the largest London business concerns, to say nothing of the output of several hundreds. Naturally, he can hire additional vehicles, but the moment he does that, obviously, he is functioning as a freight agent, therefore his clients have an assortment of differently owned lorries, exactly as they would were they dealing with a goods exchange.
As a matter of fact, the freight agency that also owns a fleet is the less desirable to the trader and cQ-6
sub-contractor, because, as has been proved in practice, the wheat is reserved for the owned vehicles and the chaff is sub-let, whereas the efficient agency, which owns no vehicles is impartial and simply studies the best interests of its clientele. Moreover, the subcontractor has no grumble. Incidentally, it has often been said that only those who own vehicles are competent to run a freight exchange. In theory, yes; but in practice the suggestion is ludicrous.
Surely it cannot be seriously suggested that the transport managers of our large business houses would immediately become disqualified if they resigned their present positions and took up clearing-house work? Yet these men have never owned vehicles ; they have achieved something that Ls, perhaps, better, in running motors successfully for their employers! That is the true function of a freight agent.
Why Are Freight Agencies Employed ?
I reiterate that goods-transport agencies are indispensable. A trader uses a clearing house for many reasons, a few of which are as follow :—
(1) It can promptly take all his output, however large, and, of course, as everything passes through the one channel only one account is necessary.
(2) Rates are fixed beforehand, and at all times the trader knows the carriage costs.
(3) He has an agreement with the freight exchange to indemnify him against all contingencies in respect of his goods.
The alternative for a large trader would be that he might one day have an ample number of vehicles at his disposal and none the next. He would be compelled to deal, at great risk, with many complete strangers and two hardly quoting rates alike.
Reverting to the question of rates quoted by hauliers, I can assure readers (perhaps " S.T.R." can confirm?) that often contractors' rates are enough to send traders into hysterics.
" S.T.R." paints a black picture of the ill-managed clearing houses, and the Editor has added the finishing touches, but the picture is not black enough. I imagine that a sufficiently large canvas could hardly be found. It is, indeed, a "growing scandal," but I warrant that if the other side of the canvas were looked Into, an equally black picture of a section of the haulage contractors would be observed—and, possibly, the very section which complains most. Unfortunately, one cannot enter into details, but I can state from actual experience that many hauliers are just as guilty in every respect as are the many clearing houses. Indeed, I maintain that they are the more guilty. If ill-managed clearing houses be not already known, they never will be, and what amazes me is that hauliers aid and abet.
They would not dream of taking loads for a trader whose financial position or integrity was in doubt, yet in full knowledge of the fact that the proprietor is sometimes (and increasingly so) a man who has failed at their own work, i.e., as a contractor, they flock to anyone who attempts to figure as a clearing house. Again, they will readily accept loads from men in the street.
"A Small Clearing House is Impossible."
Common sense should surely dictate that a small clearing house is impossible. That is to say, it cannot be run on a 10-per cent. commission basis alone. Only a fairly large turnover will permit that.
Regarding the owner-driver who becomes involved over the purchase of his vehicle, he is necessarily a pawn in the game, but, in my opinion, all the blame must not be attached to the clearing house, because in many cases the trouble is self-inflicted.
Although I should be happy to prove to " S.T.R." that my company is amongst those which set their faces against ridiculous rates,_ I certainly can confirm that we should not only be able to dispose of almost unlimited traffic at ridiculous rates, but we are implored to take it on, because "tile wheels must be kept turning."
It is not uncommon for hauliers to offer to do a round trip for "so much" and allow us the difference, whatever it may be—even £4 on a trip from London to Birmingham. Not only do we refuse all such offers, but we entirely decline their services. Incidentally, " S.T.R." appears to be under the impression that " hawking " is frequently unavoidable, but I contend that is quite wrong. That state of affairs exists only when the various agencies are short of vehicles.
The Fallacy of Accepting Low Rates.
Reverting to the fallacy of keeping the wheels turning, may I point out that I laboured this point as far back as November, 1922 (in my letter No. 2040 in Thy, Commercial Motor), when I asserted that "it was better to have nothing for doing nothing than to have nothing for wearing out oneself and vehicles."
Let me illustrate my meaning. One of our owner drivers with a large lorry, who is convinced that our policy is right, has recently had the experience of waiting 10 days, in London, for a load. During the wait
he was besieged with cheap loads—With the usual plea that half a loaf, etc.—and other owners, sweating to and fro, looked at him with mixed feelings, as he whiled away the time overhauling his machine.
Eventually he went off for us to Birmingham, with 15 tons at 27s. 6d. per ton, and two days later returned with 13 tons at 21s. 6d. per ton. Thus, by covering 230 miles he earned £34 12s., had a good rest and overhauled his machine; but, what is more important, the proper rates were maintained.
Hauliers Assist Freight Agencies.
I am positive that were all clearing houses to close to-morrow the position would actually be worse rather than better. Each clearing house represents a fair number of customers, and if it ceased to function each of these customers would be inundated with ridiculous quotations from hauliers.
The , scandal of ill-Managed clearing houses has existed since their inception and will continue just as long as hauliers support them. I submit that is logic. The irony of all this is that the haulage industry must be fully cognisant of them by reason of these eternal expositions, yet it continues to support them, whereas I submit that it is sheer common sense that if they were boycotted for one week they could not PXiSt.
I maintain that you cannot reform the ill-managed clearing house. That could be done only by demanding from it 'economic rates, and immediately that demand was made it would cease to function, simply because its customers would not agree to an all-round increase in charges. They would transfer their patronage elsewhere, even at higher rates. The only cure for the ill-managed clearing house is, I contend, annihilation, and the only people who can effect the cure are the haulage contractors.
Haulage Contractors Should Combine.
Briefly, the least that hauliers should do is to combine and agree upon minimum rates, obtaining as much extra remuneration as their merits command. They should encourage necessary clearing houses and boy
cott the others. The " necessary " clearing house should, in my idea, be one which has been established for at least five years and can produce a certificate from a firm of accountants (appointed by the Haulage Association or the C.M.UA.), certifying that (1) the traffic has been sub-let less only 10 per cent. commission; (2) the financial position is sound, and (3) payments are made satisfactorily.
In other words, a clean bill of health, afterwards to be renewed annually.