A Matter of Priorities
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The essence of successful hiring arrangements for commercial vehicles lies in the retention of adequate control whilst divesting unnecessary responsibility at economic cost.
PECIALIZAT1ON has been an increasing trend in % manufacturing industries in recent years and particularly -R where mass-production techniques are employed. Because e raw materials and finished products are tangible commodi:s they naturally lend themselves to more specific definition Lc1 control than would be the case in the provision of a service. milarly. the several processes involved in total manufacture n be readily broken down.
Now, however, trade and industry are paying increasing tention to a review of the necessity, composition and cost of oviding the several services individually required. of which msport is a major item of expenditure.
This more analytical approach by management to the ()vision of the services they require may not. initially, be the suit of direct consideration of the problems involved. The ime concern of both industrialists and traders is naturally in zir own businesses, and if these, for one reason or another, mand an increasing amount of their time and resources it is tural that they should wish to divest themselves of. ancillary ;ponsibilities when this can be conveniently and economically
N recent years there have been an increasing number of such mons. Probably the most important have been the substantial -.Tease in industrial productivity in _post-war years and the ;ter tempo of industry generally. Thus, compared with an Justrial productivity figure of 100 as recent as 1958. the rresponding figure is already around 114, whilst the figure of 58 represented a substantial increase on immediate post-war hievement. Such results have obviously not been achieved thout substantial demands on the time and administrative :Rig of top management. which has been made available only ter complete re-assessment of the relative priority of duties !eady performed.
Unfortunately, these purely industrial and administrative :nds in post-war years have, in relation to the provision of tnsport services, tended to become mingled and confused with e political issues inherent in the nationalization and subsetent denationalization of the transport industry. In the ocess, the true function of an efficient transport service and e complexities of the many problems involved have tended to misrepresented and misunderstood.
Far too 'often, during this period, it was contended that ccessful transport operation was a relatively simple exercise, it in recent years there has been a growing realization, often ter an expensive period of trial and error, that much more is involved.
la addition .to the cost of a transport service, such factors as eed and certainty of delivery, avoidance of damage or pilferg and reduction in packing costs were high in the list of users' requirements. To meet such requirements consistently a high standard of organization is obviously required.
Assuming that road transport has already been decided npon, there are, from the legal aspect. four ways in which this can be undertaken. The goods could be moved by a public carrier on Aor B-licensed vehicles, with all responsibility for delivery passed to the road transport operator. Providing the customers' timing requirements are not too exacting and the traffic conveyed and area of distribution are not too exceptional. the customer may find this method economical.
In other circumstances a trader, or possibly more frequently an industrialist, may still not wish to be involved in the selection. purchase and subsequent operation and maintenance of vehicles but. nevertheless, demands priority of use. Vehicles operating on Contract A licence meet this situation, both vehicle and driver being provided by the haulier whilst the customer retains exclusive use of the vehicle on agreed terms and charges for a minimum period of one year.
Many traders prefer to operate their own vehicles because of the special services provided by their own drivers in obtaining orders and collecting cash. in many such instances, in fact, the driver of the delivery van represents the only direct contact between the company concerned and the customers, for which reason he is a vitally important link in the sales and distribution system.
Whether or not cash is handled, a high proportion of staff in charge of ancillary vehicles on the road act in this dual capacity of driver and salesman with correspondingly added responsibility. However loyal and conscientious such a driver may be, as regards the upkeep of his vehicle, it is desirable that a clean and roadworthy vehicle should be provided with as little responsibility as possible resting on the driver; so as to allow him to concentrate on his prime function of distribution.
There is another factor in the convenient and economical provision of roadworthy vehicles. That they should be roadworthy is both a legal and commercial necessity if customers' requirements are to be consistently met. But if traders or industrialists are to undertake their own maintenance of vehicles, a substantial outlay will first be required for both a suitable building and equipment, while further and continuing expenditure will be necessary to man the repair shop and maintain an adequate stock of spare parts. Also, administration resources will be needed to control the repair staff and to ensure economical scheduling of work undertaken.
HE urgency inherent in road transport operation makes a steady flow of repair work, sufficient to justify the substantial outlay on maintenance equipment, extremely difficult to achieve in many circumstances and virtually impossible for operators of relatively small fleets. Moreover, when considering whether the outlay on such maintenance facilities is justified, traders and industrialists may themselves be involved in the substantial increase of industrial productivity already referred to, and which may already be making substantial demands on their financial resources.
But even if the availability of financial resources provides no stumbling block, the time and experience necessary first to select the right vehicle for the job and subsequently dispose of it to the best advantage—leaving aside for the moment the substantial problems of the intervening operation and maintenance—can be too easily discounted.
Precisely because this country is fortunate in having a virile commercial _vehicle manufacturing industry, there is a wide range of choice open to the intending purchaser, so that it is normally possible to fin4 a vehicle with a specification largely. if not ideally, suited to the job it will have to do. But, because of the wide range available, an unfortunate choice could be made by an ancillary user no matter how experienced he might be in his own trade or ,industry. Obviously, the cost of operating such a misfit would add unnecessarily to the overall cost of distribution. Moreover, this would continue throughout the operating life of the vehiele unless the user decided to cut his losses and make a premature replacement.
This possibility would be avoided. however, if the user decided to hire whatever commercial vehicles he required fro a contractor while still retaining operational control providing his own drivers. Because a contract-hire speciali is not primarily concerned with the traffic side of road transpo operation, he can devote his time and resources exclusively engineering matters and so become an expert in the provisic and maintenance of vehicles.
This would include not only the careful selection of vehicl, to suit whatever type of operation the customer was engagt in, based on practical experience, but also adequate and efficie, maintenance by the maximum utilization of garage equipmeJ and purchase at the most advantageous terms.
Although admittedly a smaller problem than that of purchas the time. and to some extent risk, involved in disposing vehicles should not be underrated. However carefully II depreciation costs of a vehicle may have been estimated, fir substantial changes both in rates of purchase tax and mark values over a period of, say, five years or more according 1 the type of vehicle, might invalidate such estimates. Whei vehicles were hired, such responsibilities and financial risl would be transferred from the user to the contractor. Becau, of the larger number of vehicles which a contractor woul normally handle, he would have more experience both on whk to base his original calculations and, in adverse circumstance to weather temporary fluctuations in trade conditions.
Another factor to be considered by traders and industrialis when evaluating the merits of ownership or hiring of con mercial vehicles is the extent to which they arc committed I provide a continuous service to their own customers. If a hip standard of service is demanded there is a limit to the amoui of servicing and light maintenance which can be imdertake outside the period the vehicles are required to be in operatioi Beyond that point, either the service provided by a vehic temporarily ceases or a replacement vehicle has to be provides
Because of the increasing trend in trade and industry 1 operate on smaller stocks, there will be relatively few occasior when customers will tolerate a transport service interrupted ; the trader's convenience for vehicle maintenance purpose Alternatively, the provision of a replacement vehicle mu obviously incur additional expenditure. This can only t reduced to an acceptable minimum if it is spread pr< portionately over a comparatively large fleet of vehicles. l many cases the contract specialist would be in a mot favourable position to do this to the advantage of both partit
to a hire agreement. S.B.