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Leicestershire Hauliers Ltd.
Page 51
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'It is not our object to make colossal profits' by David Lowe M hist A.
IN 1961 members of the Road Haulage Association's Leicestershire sub-area wished to prevent the repetition of a surplus of tipping vehicles being left in the area which had occurred after completion of the Watford to Crick stretch of Ml. The next MI stage, the Crick to Markfield section, was being planned in that year and RHA members feared there would be a large influx of tippers to carry out the excavation contracts. This prompted discussions and finally the formation of Leicestershire Hauliers Ltd. Unfortunately, members were soon to find that the major motorway contractors wanted little to do with organized groups whose aims were to hold out for better rates. Contractors preferred the owner-driver or small operator who were in individual competition and happy to accept the offered rate.'
For the remainder of 1961, all of 1962 and the early part of 1963 the group was inactive. Interest, however, was revived after the 1963 RHA conference at Brighton when one item on the agenda was co-operative groups. In February 1964 a manager, Mr. R. Cross, was appointed and he is now also a director of the company. Since that date the group has been really active, achieving with some success its basic objects of obtaining work for members and maintaining rates in the process. Financially, the project has been very successful.
In terms of the ideals of compleie co-operative activity, only marginal results have been obtained. This is due in no small measure to the independence of hauliers anxious to retain their identity. The ideals of group working demand full integration of members in all aspects of their operations, and in Mr. Cross's experience this is just not possible. He feels that small hauliers need to band together to face competition from large operators, but while the small operators agree to this in theory they are most reluctant to put it into practice.
Mr. Cross has found that some hauliers will not take vehicles off low-paid work for better-paying group work because of their lack of confidence in the ability of the group to provide regular work. Why this should be so is difficult to comprehend when it is widely known that the group company is soundly established and has an adequate and regular supply of reasonable work. It comes back to the haulier's desire to retain his independence, and, in fact, it appears that this is the basic reason behind almost all efforts by the group to extend its activities and services to members. Mr. Cross quoted instances of members working independently at their own rates for the same customers as the group; this, I think, highlights the difficulties faced in endeavouring to achieve full co-operative working.
The Leicestershire group, which operates in an extensive quarrying area, avoids quarry work, and much of it is left to the owner-driver on contract licences. In Mr. Cross's opinion the quarries, like the motorway contractors, are not keen on negotiating with organized bodies; quarries are well aware of the pressure which would be placed on them to pay higher rates.
A great deal of group work is solid fuel; other regular traffic includes grain, road stone and building materials. Many hauliers in the area have conditions on their B licences to enable them to undertake work for Leicestershire hauliers. These conditions were obtained without much difficulty, neither British Railways nor BRS objected to the applications. The local BRS depot has, in fact, been found very helpful—the group has done work for British Road Services and in return if Mr. Cross gets a flat vehicle in need of a load he phones BRS.
It is in financial terms that the group. has been most successful. Progress has been made from a nil turnover with a £74 loss in 1963 to a 1969 turnover of £153,000 showing £3,300 net profit. Mr. Cross points out that it is not the group's object to make colossal profits, but profits must be made to keep the organization on its feet. No fixed percentage deductions are made from rates, and only an amount that the rate will bear is deducted.
Shareholders have received a 10 per cent return on their shares for the past three years, and in 1968 and 1969 members received a one per cent return on the value of work carried out for, or contributed to, the group. Surprisingly, out of the £153,000 turnover in 1969 only £20,000 worth of this was contributed by members, and work done by them was valued at £94,000. This means £133,000 worth of work was obtained by Mr. Cross and his staff and £59,000 worth of work was carried out by non-members.
Mr. Cross has a firm belief in the value of co-operative working, but he is limited in what he can do by, the lack of enthusiasm for the same ideas by members. He feels that a national federation of tipper groups is necessary—this was called for at at the RHA tipper conference at Buxton—to provide advisory and information services. Mr. Cross wanted to establish a group garage and storage facilities on the premises where his office is established, but in addition to having to find £25,000 for the scheme a further £16,000 would have to be paid as betterment levy. This made the scheme prohibitive.
New legislation I asked Mr. Cross about trends in the area following the introduction of all the new legislation. He replied that he has noticed a considerable fall in the number of Contract A applications but an increase in B applications to extend existing conditions. The quarries have started to 'acquire their own vehicles to offset the shortage caused by small operators closing down, but they still will not negotiate with the group.
Mr. Cross has had many inquiries for help with form filling, plating and testing applications and operators' licensing applications. In many cases these forms have proved too complicated for the small .operator to understand. Some of the small and less efficient operators have begun to find that rising costs have swamped them, that competition is too hot and the legal requirements here became too technical and complicated.
However, this situation will help those operators who have prepared themselves, and it is, I think, clear evidence of the need for greater co-operation among small operators to enable them to challenge the giants.