Stabilize Rates on "Tile C.M." Basis I N its discussion of
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a scheme to stabilize haulage rates, the committee of A.R.O. Cambridge and Ely Subarea, next raised this point: " That fixed rates are likely to be subject to hidden rebates and contras of all kinds." My answer to that opinion is that the harm which can be done by this process is limited. That it is likely to occur is no real reason why rates should not be stabilized.
Once the principle of stabilization is agreed upon, on the basis of the time and mileage rates quoted in The Commercial Motor Tables of Operating Costs (as suggested in last week's issue) we shall at least have arrived at a stage when everyone in the industry will know what the rates should be. A good deal of the trouble now prevailing is due to the complete ignorance of at least 50 per cent. of hauliers concerning an economic rate for any particular job. If a scheme of stabilized rates be agreed Upon, we shall then have what we have never had before, a standard to which to work. That there are liable to be divergencies from that standard is admitted.
Bargaining the Basis of Trading.
It should not be forgotten that bargaining is the very foundation of frading. In every industry other than that of haulage, there are, however, more or less fixed prices and if, in the course of bargaining, some divergence occurs, it is only temporary. The seller does not make each new cut price the standard rate, which, next time a customer comes along, will itself be subject to a • further cut, in the process of bargaining.
It is that successive bargaining for each new customer, with no standard to which the haulier can return, that has been, and still is, the weakness of the road-transport industry. It is that which has brought haulage rates down to such a low figure. I maintain that once a standard is established, the tendency to cut and cut and cut again will at least be considerably diminished.
The next criticism was that, unless the rates of all forms of transport are subject to approval by one tribunal, the railways will cut the rates without let or hindrance. The answer to that objection is that the railways cut without let or hindrance anyway and to introduce that point into this discussion is almost the equivalent of drawing a red herring across a trail.
The railways cut below the uneconomic prices which are quoted by some of the worst rate-cutters among road hauliers. The question. of fighting railway rate-cutting is a problem in itself, to be considered separately, and hauliers should remember that they are in a position to offer particular benefits of service which far outweigh any advantage in respect of rates which the railways may offer.
I have a positive answer to the next criticism, namely, that it is difficult to avoid complication in scheduling rates for vehicles of 1-ton to 15-ton capacity, for various classes of traffic and sizes of load, including single or multiple pick-ups or drops.
Complicated Schedules Unnecessary.
This complication is completely avoided by using the time and mileage basis for assessing the rates for any particular vehicle or any particular job. The CoNmereial Motor gives 2s. 9d. per hour, plus 21d. per mile, for a 1-tonner, assuming that it is operated with a single shift of drivers and no mate, and 2s. 3d. per hour, plus 21d. per mile, if there be a double shift of drivers, but still with no mate.
For a 15-ton oiler the corresponding figures are 6s. 90. per hour, plus 941. per mile, for a single shift, and 5s. 3d. per hour, plus 91c1. per mile, for a double shift. Similar figures are given for every size of vehicle. With these figures, it is possible to quote a rate for any kind of job, whether the terminal delays, calls en route and speeds are such as to make the journey unusually long or short.
With the next objection I dealt in the previous article. It states that rates stabilized at a profitable figure may cause the introduction of more C-licence vehicles, especially by farmer C-licensees, unless such rates apply to them, or unless their entry into haulage be restricted. I pointed out, last week, that there are conditions which make it inevitable for merchants and traders always to require the assistance of road hauliers.
I did not include the farmer C-licensee in that reference. I do agree that something should be done to restrict the operations of that type of commercial-vehicle user. It should be made an offence for any C-licensee in any industry to carry goods for hire or reward. I have good reason for stating that strenuous efforts are being made by the associations to deal with that problem.
Allowing for Local Conditions.
The next comment is that minimum rates which will be acceptable to hauliers in flat East Anglia might be quite unremunerative to those operating in South Wales. Surely that objection can be met by a slight modificatiod of the time and mileage figures according to locality?
The time figures could well be standardized in accordance with the Conciliation Boards areas: Indeed, they could be based upon the wage scales in operation in any particular area, although the alteration necessary would be almost infinitesimal, except in extreme cases. The mileage scale could be varied, according to the nature of the country, by, perhaps, reducing the standard by id. per mile in flat East Anglia and similarly increasing it in the hilly districts of Wales and elsewhere.
It is next suggested that industry should have the right of bargaining on rates, where it is shown that two-way traffic can be relied upon, or where two-way traffic is offered. These two sets of conditions are not so closely related as might be assumed from their being included in the one paragraph. Where two-way traffic is offered, the quotation is to one customer and would be for the use of a vehicle for a given time and covering a certain mileage. For that service the time and mileage rates are a positive basis for tender.
It is not the same thing when dealing with what I might term the probability of two-way traffic being available. Then the haulier is dealing with two customers. There is, moreover, the chance that the return traffic may not eventuate and, in any case, it is likely to involve terminal delays due to difficulties in picking up at convenient times. Two-way traffic can be de
finitely unremunerative, even at full rates, owing to these terminal delays, which cannot fairly be debited to either of the two customers concerned.
Under these conditions, each case would have to be considered on its merits. There ought to be some agreement between hauliers at each terminal point, lest an operator from "A," for example, should unfairly compete with a haulier from "B," by reason of this bargaining, as the committee calls it, on the basis of twoway traffic.
Return Loads at Cut Rates.
The question of return loads is admittedly one of the complications which will need a good deal of thought and close application at the hands of hauliers (kindly note that I do not merely state the hauliers' associations) if a satisfactory solution of the problems involved is to be achieved. One of the difficulties is that instructions for loads are sometimes given at the point of delivery, rather than that of collection. In other words, the haulier receives his order for the back load, when, of
course, the outward load becomes the subject of bar gaining.
There is always the matter of the haulier finding himself in a town, having delivered a load, and being offered a return load at a price which all concerned
know to be uneconomic. The temptation to take that load and make a pound or two, rather than go back empty, is one which is extremely difficult to resist. An
important factor in this question is, of course, the less reputable clearing house. There is no doubt that the problem of the clearing house will have to be tackled coincident with that of rates for return loads.
Nevertheless, this factor is, as I have stated, an unavoidable one and should not be allowed to hold up • progress towards the main objective—the establishment of a basis of haulage rates. In my next article, which will be the third of this series dealing with the stabilization of rates, I propose to deal with the suggestion that road-haulage rates should. be based on the railway practice of charging "what the traffic will bear." S.T.R.