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Financial incentive could cut turnround
Page 61
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by H. R. Featherstone FCIS,AssocInsif
director, Freight Transport Association PRODUCTIVITY is hardly a new word for the transport industry. Year after year, productiv ity has been increased through larger and more specialized vehicles, better scheduling and planning, higher speeds. All in all, a more scientific approach to the business of transport within its wider concept, distribution.
Progress in some directions, notably higher speeds and realistic driver productivity schemes, may not have been as rapid as we would have liked, but at least there has been progress. We have been moving forward. Only in one direction have we gone back wards—vehicle turn-round. Far from solving the problem of delays at factory, port and shop, lost time is increasing. It is only made worse by the related problem of reduced delivery hours.
The problem is hardly new. Indeed, a good deal has been done over many years in an attempt to reduce terminal delays. Conferences have been held, port authorities approached, customers urged to co-operate, publicity campaigns waged. It is certainly not new. But it is now hitting transport managers right between the eyes because of the impending cuts in drivers' hours, particularly the reduction of the working day to 11 hours which is more serious to many than the reduction in driving time.
To firms engaged on multiple deliveries, much more can be achieved by reducing unloading and waiting time than would ever be possible through increased running speed. On the other hand, companies which have drawn up incentive schemes to show substantial savings on running time have found much of the good undone through inability to control terminal delays.
To tackle the turn-round problem is therefore of crucial importance.
It is easy to fall into the trap of viewing the transport operation in isolation. By this yardstick, any excess over minimum turn-round time is unproductive, and due to bad management. But, paradoxically, it may be due to good management. It may be more economic overall to keep vehicles waiting from time to time, rather than to gear the shop or factory to be continuously available for unloading. The situation is analogous to empty running, where it can be shown conclusively that it is sometimes more economic to run empty than to wait for a return load to be available.
Cold Comfort
This is cold comfort for the transporter, who would doubtless be more open to conviction if he knew that vehicles were only kept waiting in consequence of conscious economic judgments of this sort. He rightly suspects that the cases of bad management outweigh the other sort.
There is no lack of knowledge among transport men of ways of reducing turn-round • —better-designed reception facilities and loading bays; mechanical handling equipment both on the vehicle and the loading bay: greater use of articulation: joint planning between transporter and customer; simplification of documentation and procedures; and so on and so forth. Why, then, has so little been achieved?
Could it be that those responsible for delays, although constantly being exhorted to put their houses in order, are seldom given an incentive to do so? Exhortation and education are all right in their proper place, but are seldom an adequate substitute for selfinterest in the commercial world.
Does this mean demurrage with all the difficulties, practical and psychological, which surround it? Not necessarily. Why not a discount in return for prompt turn-round or the provision of particularly good terminal arrangements? Certainly this would be much more attractive psychologically than the penal element involved in demurrage. For this reason it should appeal also to the sales departments which have so often resisted pleas from transport managers to put pressure upon particular customers.
The idea is not new but, by the same token, wonder how often it has been tried. Of course, there are difficulties. How is the discount to be calculated? How is delivery time to be checked? And what about the paperwork involved? These are practical prob lems, but they are no greater than the ones implicit in demurrage. It is, incidentally, another field in which the tachograph would prove its worth as a management tool.
Would the discount be large enough to seriously influence the customer? In some cases, perhaps not, but where delays are serious, and hence costly, the financial incentive should be worth while, especially at a time when trade and industry is particularly costconscious. It has certainly been sufficient to persuade at least some operators that it is worth while to pay themselves for modernization of their customers' premises!
There would no doubt be fear of an initial uplift of rates or charges to provide the discounts. This need not, indeed should not, happen. If improvement is measured against the current norm, then discounts can be paid out of operational savings, and no question of increase should arise.
The same principle of financial incentive might be applied with advantage to out-ofhours deliveries, with the difference that here there may be no financial savings, only a social saving to the community. Inasmuch as it is the community that benefits in the form of reduced day-time congestion, surely there is a strong case for the community to provide some form of social subsidy, possibly in the form of tax relief. The shopkeeper would welcome relief from SET (surely an appropriate relief) with open arms, and this would help to offset the increased expenses which he would otherwise incur through staying open late. In this way, out-of-hours deliveries might become a reality instead of a discontinued experiment.
Perhaps financial incentive could also be used to grapple with the insidious problem of the continuous reduction of the delivery week, in some cases now down to four short days, at shops and factories. If these reductions make economic sense to the customer, as they undoubtedly do in some cases, the transporter can only redress the balance through financial incentive. Exhortation has been proved to fall upon deaf ears.
No one is likely to produce a miraculous answer to the problem of turn-round. The nature of some delays is such that they are virtually inevitable and must be accepted. Others will only be eliminated at greater overall cost somewhere in the system. But there still remains a substantial residue which it should not be beyond the wit of man to solve. Whether this residue would respond to the discount formula propounded earlier must remain an open question. But one thing seems certain. New thinking, preferably of the bold, imaginative variety, is overdue.
I hope that the FTA working group which we are setting up to look at the problem will provide it.