NCL climb out of the mire
Page 33
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by John Darker
OMEN National Carriers Ltd announces the introduction of a tew Contract Services scheme, you can almost smell the wind )f change in the State parcels sector.
Coming in the wake of such specially marketed services as dedallion, Yellow Diamond, Fashionflow and Chinaflow, this atest package is aimed at meeting the needs of the individual :ustomer.
NCL says the Contract iervice will use dedicated .esources, often jointly prodded with thq customer firm.
This represents a far cry mm 1969 when about 90 per :ent of the former rail express iarcels business was ;eneralised.
As Paul Rivett, NCL's marLeting director, stressed, an `all things to all men" product ir service is often fated to iecome "nothing to nobody".
The resuscitation of Naional Carriers since 1969, vhen the business was losing 20 million a year on a urnover of £24 million, repreents a saga of an accounancy juggling act.
Each year the losses have ieen reduced through a suc:ession of highly qualified inancial directors, while nanaging directors have paid L heavy toll in sleepless When a massive loss is liminished, but the operations :ontinue to be wildy unprofitible, unkind critics still point he finger of scorn.
In reality, NCL has always ieen the plaything of politics. 'ransport Ministers of all • olours have not been preoared for the drastic surgery hat could have put NCL, and ts initial staff of 24,000, out of heir misery.
The original staff of 24,000 Las now been whittled down o around 14,000 persons, and 1,000 vehicles and 22,000 railers have been compressed o 6,000 vehicles and 13,000 railers.
NCL's structure is now nuch leaner and healthier, Lut the traumas, as wave after vave of redundancy hit the ackless staff, should not be prgotten.
Hard luck stories don't cut nuch ice in the market place, ■ ut it is only fair to point out ome of the burdens faced by L1ational Carriers and its Larent, the National Freight ;orporation.
The obligation to meet the taff pensions bill, inherited ram British Railways, now osts NCL between £3 million nd £31/2 million a year. Free ravel perks cost between £1.2 nillion and £1.5 million a year a present from NCL to BR. The Community Land Act ,f 1974 prevented NCL from selling many of its prime inner-city depot sites on an inflated land market.
What many professional road hauliers find hard to understand is the slowness with which NCL's depot structure was modernised.
Whilst many of the initial 250 inadequate depots, designed for the horse and cart era, were phased out, the "perambulating" system, whereby laden vehicles proceed along a line of empty trailers to off-load, still persists in some archaic premises.
Was everything possible done to devise some practical alternative when old railway depots without loading banks continued to be used?
Sir Dan Pettit, chairman of the NFC, endorsed the views of some NCL executives, that the increased market segmentation philosophy of NCL has destroyed the case made by critics of the State parcels overlap.
A straight merging of Roadline UK Ltd and National Carriers Ltd is much less tenable if both companies have, in effect, split themselves into a series of specialist and functional organisations.
The logic of this seems suspect to me. If you believe the case against generalised smalls and parcels networks, offering mediocre services and generating little customer enthusiasm, then surely, a merger of the two main parcels carriers would allow a greater tonnage of traffic to be split up into specialist categories, eg carpets, china, motor spares, garden produce, fashion goods, wallpaper and paint, DIY goods, etc.
Much is made by both NCL and Roadline UK managers that their main customers want above all, a truly national distribution service. But the main towns and cities surely provide around 90 per cent of the traffic, and perhaps even more of the revenue, of both undertakings.
Does the state sector necessarily have to meet the burden of coping with greenfields traffic, at rates which must be loaded by the general overheads of the business?
Why not feed the traffic from the main State and parcels companies into terminals in Scotland, Wales and the remoter provinces. There they could be handled by approved private contractors, often ex-NCL or Roadline UK staffs?
Bernard Warner, assistant managing director of NCL, revealed something of the Company's approach to innovation, when he said, about the recently introduced Chinaflow service, that NCL had decided to develop china movement in fibre "trays", when they noticed that this trend was catching on with pottery manufacturers using their own vehicles.
The case for introducing such an innovation "second" rather than as a pioneer, was forcefully endorsed by Sir Dan Pettit.
Yet the risk that professional carriers will lose out in failing to propose sensible innovations is, surely, apparent.
The news from managing director of NCL, Brian Hayward, that average transit times on NCL services have now been reduced to between three and a half and four days on average, may be commendable, but nothing very breathtaking to any old parcels operator.
Much quicker times were a matter of routine, long before there was a BRS Parcels service.
Admittedly, State parcels operators can claim that the bulk of inter-city transits take much less than three and a half days, but if this is so, the case for hiving off to small private operators the greenfields areas, that pull down average transit times, is surely strengthened?
Not surprisingly, Sir Dan Pettit regretted that only £43 million of the £60 million specified in the Transport Act, 1968, was actually stowed away on board. As many predicted at the time, the money was forsworn too soon.
It would be worth £40 million today, and there is no doubt at all that the NFC and their problem child, NCL, would•much like to get their hands on the money.
No one would wish to counsel the improvident or reckless pursuit of innovation for its own sake. But it is permissible to argue that the State parcels sector has a duty to demonstrate, with pilot experiments if necessary, better packing and handling methods for the traffic it carries, on behalf of customers, to the benefit or detriment, of us all.
My comments are meant constructively. NCL staff have endured the spirit of Dunkirk with great fortitude since 1969, or earlier. We must all hope that the barely discernible up-turn in the economy provides the stimulus for the "one last heave" to viability.
To quote Sir Dan: "NCL stands for 'No Compromise with Loss'." And so say all of us. What exhortations will Sir Dan offer Roadline UK Ltd?