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Milk Hauliers Should Help the J.H.C.

4th January 1946, Page 27
4th January 1946
Page 27
Page 28
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Page 27, 4th January 1946 — Milk Hauliers Should Help the J.H.C.
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Which of the following most accurately describes the problem?

LET me place on record at the start that I am writing this article on December 18, 1945. That fact may, possibly, be of importance. It is an essential part of my duty to be fair in all that I write. The fact that I am, all the time, watching the interests a the small haulier and presenting his case to the best advantage, does not mean that I may not write a word in defence of any other parties concerned. I am not counsel for either side.

In these articles it is my business to present the truth, so far as I am aware of it. Viewing the matter of milk-haulage rates, and especially the proceedings of the Joint Haulage Committee, in that light, I am bound to state that much of the blame for the apparent lack of fight exhibited by the haulier members of this Committee is due to the fact that they do not get the co-operation and support of the hauliers they are trying to help.

As a preliminary to explaining what I mean by that, I must tell something of the proceedings of this Committee, so far as I know them. The Committee comprises six representatives of the Milk Marketing Board, six haulier members —selected by the R.H.A.—and three representatives a the dairies. The chairman is a member of the Milk Marketing Board. This last appointment has aroused criticism, but I do not support that. I have always found the chairman to be very fair.

When a case is heard, the haulier, with his representative— if he prefers to have one—attend, with a set of figures previously prepared, similar to those which are reproduced in the accompanying Table II from the article published in "The Commercial Motor," dated October 26, 1945. Representatives of the Milk Marketing Board are also present and they bring a similar set of figures (reproduced as Table herewith) which indicate what, in their opinion, the haulier's figures for cost ought to be.

The haulier may question the Board's representative and the M.M.B. men may question the haulier. Any statement may be made in support of the case of each. Any member of the Committee may ask questions of either party.

How the Committee Members Arrive at a Decision • This ends the first part of the proceedings. The haulier and his representative and the Milk Marketing Board men then retire while the Committee adjudicates. When the Committee has come to a decision the haulier and his supporter and the. Board's representatives are called in and are informed of the result.

Now, here is the most important point. I have been informed that there is no appeal from that decision, provided that the Committee be unanimous. Since, so far as I know, there has, as yet, been not appeal, it follows that, hitherto. the decisions of the Committee have been unanimous.

Another point, if an appeal be made following a failure by the Committee to come to unanimous agreement, the case goes to what is called arbitration, and the decision of the arbitrators is final and definite.

I have, on previous occasions, asked why the haulage members of the Committee have not disagreed to such an extent as to make it open for the haulier to appeal and thus take a case to arbitration. I have invariably been told that the figures presented by the haulier are insufficient or not accurate enough to make it safe to go to appeal.

The haulage members of the Committee are definitely of the opinion that to go to arbitration with a weak case would be much worse in the long run than not to go to arbitration

at all. in their iudament it is far better for them to agree, even when they feel that there is a doubt that full justice is being done, rather than to take a case to arbitration and fall

down through the insufficiency of information provided by the haulier.

Then, I asked, why not go to arbitration on the basis of this lid. per mile allowance for establishment expenses and profit, because that is, in practically every case, so obviously insufficient. I have met the same reply—that hauliers do not present factual data as to their establishment expenses which would enable the haulage members of the Committee definitely to assert that this lid, is not sufficient, and there the case rests.

We can carry it further but only if some haulier does produce figures for cost in every department which are absolutely unassailable. If, then, the Milk Marketing Board is so ill-advised as to try and force an adverse decision, then the Committee will not be unanimous, the case will go to arbitration, and something really useful to milk hauliers will happen.

I should imagine, however, that it is extremely unlikely that the Board, in the face of such accurate and irrefutable evidence, will dare to force the issue. Therefore, we come clearly to the inevitable conclusion that if milk hauliers are to get fair rates they must, in the first instance, set about accumulating accurate records of their costs, accurate down to the last +d. If they do that they will, at least, be awarded .a measure of profit on their undertaking.

All that will remain then, as I see it, will be for the haulier members of the Committee to take a strong line to ensure that that measure of profit is fair and reasonable, having in mind the conditions under which the traffic is carried. I imagine that, even there, the haulage members of the Committee will find they are up against it, but if they have castiron cost figures as a basis on which to work they should have a chance of achieving something on the lines indicated.

Preparing Figures for Submission to the Committee

Now let us examine these figures for cost in the form in which the haulier is expected to prepare them for submission to this Joint Haulage Committee. Let us examine them in the light of the two examples reproduced herewith. I am going to demonstrate that the haulier, in this case, was culpably careless in the compilation of his cost figures and that he undoubtedly failed to give the haulage members of the Committee that co-operation which is their due and which they must have if they are to help the haulier in the way in which be needs it.

We need not concern ourselves with the upper part of the tables, giving particulars of vehicles and routes, beyond pointing out that the figures presentedt by the Milk Marketing Board seem, on the face of it, more likely to be 'factual than those presented by the operator. However, the totals of daily and annual mileage agree, as does the annual gallonage. There appears to be a difference of opinion as to the hours worked, but that is accounted for by the fact that the haulier, having to pay on the basis of an 81-hour day, puts down 81 hours, whereas the Board in its return set i out the actual time needed to complete the milk round.

Here, as a matter of fact, is a point which does rather show that the M.M.B. is not making any particular effort to be fair. It must know that there is work to be done on the vehicle each day when it returns to the garage, after having completed its round, and that, therefore, the 81-hour claim by the haulier is as nearly accurate as the figures set down for "Time Daily" by the Board.

It is, however, with the figures for cost that we are really concerned and I propose to go through the items one by one and indicate wherein the haulier failed to reach the standard of accuracy which is so necessary.

We can pass over the items" licences" and." insurances." There was complete agreement on these and to ascertain the amounts is not a matter which is troublesome.

When we come to wages there is this curious feature, namely, that the Board indicates that a figure of £1,573 per annum is satisfactory to it, whereas the operator claims only £1,495. The inference is fairly obvious. The haulier must be wrong, for it h extremely unlikely that the M.M.B. would award him,' on account of that item, more than he actually pays, and already we can see that the haulier has not kept a true and accurate record of his expenditure on wages.

The Board's assessment is on the basis of 54 weeks per annum: that of the haulier on 52. If the haulier had kept weekly records he would have found that he has had to pay 54 weeks wages in 52 weeks, because he has either to allow his drivers the equivalent throughout the year of approximately a fortnight's holiday, paying some other drivers to take their places during that period, or, alternatively, pay his drivers double wages during those two weeks. If he had kept weekly records that would have been self-evident.

Another point. The Board makes provision for "State Insurance ES." The haulier in his accounts makes no provision whatever for that item. Apparently he has forgotten it. If, as I imagine is the case, he pays premiums to cover the W.C.A. insurance he would find that the item was nearer £10 per annum than 15, so that there, as the result of his failure to keep accurate records, he would have lost something approaching £5.

The next item is "Hire of Outside Haulage." The Board, in its wisdom, concluded that because he had five vehicles and had, from time to time, at some loss of efficiency in delivering the milk, been able to manage with four vehicles, there should be no allowance for hire. Actually, that is unfair. If five vehicles be assumed to be necessary to do the work, then it is inevitable, in milk haulage—which involves the use of the vehicles for 52 weeks per annum, of seven days each—that the vehicles must be laid up some time during each year for maintenance and repairs, in which case it would be necessary to hire other vehicles to take their place.

An Estimated Figure Unacceptable Unfortunately, once again the haulier fell down, in that he did not keep precise records of his expenditure in that direction or, if he had them did not produce them, merely putting down an estimated figure of £180, which; reasonably enough, the ,Board and the Joint Haulage Committee felt justified in rejecting. It was fortunate, in this case, that there was no question of use of vehicles for the haulage of traffics other than milk, because, in that event, the complication and disadvantage of not having accurate records would have-been more evident.

No difficulty arose in connection with the amounts specified for expenditure on 'petrol and oil. I understand that a figure of 10 m.p.g. for petrol had been agreed and the costs were based on that. So far as lubricating-oil consumption is concerned there is not a great deal to fight about.

It is when we come to tyres that the full importance of keeping accurate records becomes most apparent. The Milk Marketing Board allowance is 1.22d, per mile. If I Lake 34-in. by 7-in. tyres as costing £85 per set, it moans that the Board assumes that the tires Will stand, taking tubes and covers together on the average, a mileage of about 16,700.

In my view it is not likely that 34-in. by 7-in, synthetic tyres will last that mileage on this traffic, but does the operator produce any evidence to justify his figure of 1.987d. per mile, which is equivalent, as he states, to 9,00C miles per cover and 20,000 miles per tube?

Stare of Tyres Must Be. Given

In his claim, he states that he has purchased, during the year, 11 sets of covers and six sets of tubes, costing, in all, £846. The M.M.B. does not accept that. Before it can accept those figures it wants to know precisely the state of the tyres on the vehicles at the commencement of the period and the state of the tyres at the end of the period.

It is quite possible that, just preceding the commencement of the period, the tyres were absolutely worn out and that when the period ended the vehicles had all been fitted with brand new tyres. If that be so, then, says the Board, you are charging us for a complete set of tyres on each vehicle more than we should pay.

It is unlikely that the picture thus drawn was an accurate one. On the contrary, it is probable that, in most cases, a set of figures for tyres presented in that way, spread over five vehicles, does actually represent the expenditure on tyres over a year and could be taken as averaged over the fleet. Nevertheless, it has to be admitted that the figures were not accurate. They did not actually show the cost per mile for tyres. They made certain assumptions which might have been as much as 50 per cent. inaccurate.

As regards the next item, "maintenance," there was not much disagreement between the figures presented by the haulier and those presented by the Board. The latter allowed 1.10d. and the former 1.174d., approximately threefortieths of. a penny per mile different. Even that, however, can mean a sizeable sum in a 100,000 miles per annum, which this fleet covered, but again the haulier presented no detailed figures in respect of his claim for 1.174d. All that he stated was "spare parts and labour, f500." That is a round sum which no one would accept as being strictly accurate.

Now we come to the final item, where the haulier made the biggest mistake of all. In his claim for depreciation he assessed the amount on the basis of five lorries' at £525. Actually, the Milk Marketing Board was well aware that two of the lorries cost only £385 each, although the other three did cost £525 each. He might have been justified in disputing the figure of 150,000 miles as a basis for depreciation of the type of lorry he was using, but he lost ground because his figures, in the first place, had not even the semblance of accuracy.

It is not to be wondered at that the Board could not accept as being accurate the items of "overhead expenses" and "profit," which appear in the operator's schedule of expenditure. It stuck to its lid. per mile and, so far as it was concerned, that ended the matter.

Apparently, also, it ended the matter for the haulage members of the Joint Committee, because, although he was given .06d. per gallon more than the Board had offered—he was given 1.Id. per gallon as against 1.04d. per gallon and compared with the 1.4d. per gallon for which he asked—we do not know what actuated the Committee in coming to the decision to give him that small increment.

Nothing I have said above may be taken as affecting what I have milk he 'carried. What I am

£6,536 he did not, in presenting his case, 2,732 previously stated in tbese articles, 1,744 trying to demonstrate now is that

namely, that it is my firm conviction that this operator was entitled to 1.4d. per gallon for the afford the haulage members of the Joint Haulage Committee that co-operation and support which they should and must have if they meet the arguments put up by the In next week's article, I intend to outline a method of recording costs in connection with milk haulage, a system as simple as it can be, but which will, nevertheless, afford the essential information which will at 16ast justify an operator's claim that his costs are what he claims them to be.


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