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lAULIERS' GROUP MOVEMENT The Movement Towards the Group of Small Hauliers, After Seoe False. Starts, is Now in Full Sw. and it is a Good Thing for
Industry
By " S.T.R.
THE movement towards-the grouping of local hauliers, for their . mutual benefit, now seems to be .growing. There have, of late, been several attempts to encourage it, but with practically no success. Hauliers Mutual Federation 'tried to foster it, Associated Road Operators sent out a grouping quiz to its members; and probably the C.M.1.1:A. d 1 something similar; but, . as to that, I know nothing.
It' is 'a curious thing, but the attempts by those associations to encourage grouping had the contrary effect. Apparently, there is nothing that acts as a greater deterrent to group formation than for an association to take a hand in it. Proof of this.paradoxically enough, is provided by the fact that Mr. R S. Woodhouse, secretary of the South-eastern Area of A.R...0., is also secretary of the North East Kent Transport and Trading Co., Ltd., a group of hauliers to the formation to which reference was made recently in " The Commercial Motor."
Mr. Woodhouse is emphatic about the existence of this peculiar -psychological reaction of hauliers to any attempt by an association' to form groups. Apparently, he says, the hauliers are suspicious; they seem to take the view that the association is going to make something out of the group, and they do not like it
He had nothing to do with the formation of the North East Kent Group, at least in its early stages. The members held a meeting, decided to forrn.a group, and took the preliminary steps to that end, before they approached him to take over the secretarial work. He is firmly convinced that if he, as an official of AR. 0., had attempted to initiate the movement, it would have come to nothing. , • "Keep-out" Warning to Associations That is important, as having both a bearingon the history of the growth of-the group movernent—indicating, as it does, Why it has, hitherto, been so hesitant—and as a warning to associations and association officials, whatever their stations and wherever they may be, to " Keep Out."
I have always been a keen' advocate of grouping, as readers of " The Commercial Motor " may know. I have encountered groups of various kinds in my. wanderings up and down the country, and I have always found them to be beneficial. I have liked them because their effect is to remove the suspicion which, in the absence of grouping, seems to permeate the industry, so 'that every haulier suspects and is jealous of his neighbour.
There is co-operation and mutual goodwill .present whereves a group is formed, and rate-cutting is considerably diminished, for the group is, in effect, a stout bulwark against the attacks of those buyers: of transpOrt who use the method of setting one
haulier against another as a way of getting their haulage done. at cut prices. The inherent jealousy and suspicion of the non-grouped haulier assists that process, whereas, in a group, there is inter-communication amongst members and agreement on minimum rates which foils it. These, to my mind, are the fundamental advantages of grouping; others have developed, and I shall refer to them later. It is a fact that, with one exception, the groups with' which .1 have made personal contact have been formed, in the first instance, with these objects in view, but particularly as a means for combating rate-cutting. .
The exception, a group formed in the Biggleswade area, is worthy of more than passing reference because in its development other advantages have been so strikingly shown. I give its history in brief here, although it is, in a sense, a digression.
Market-garden Produce . Provides Good Example For years the staple traffic for hauliers in that area had been marketgarden produce, conveyed, in the main, to Covent Garden, London. With hardly a day's notice, however, they were forbidden to operate and all their traffic was to go by rail. They were left high and dry.
One of them, fortunately, was
.acquainted with the • Harpenden Co-operative Group and with Mr. E. B. Howes, its chairman, whh was asked to help. Mr. Howes characteristically said, " All you've got to do is to get cracking and form a group like. mine." He gave them some advice and a copy of the rules of the Harpenden Group.
The upshot, which is the matter germane to my argument, is that, recently, when it became advisable •to arrange that this market-garden produce should again be carried by road, there were no vehicles to carry it. All those hauliers who had been accustomed to deal with it were, because of the success of their group, too busily engaged on other more remunerative and more convenient traffics.
The material advantages of group formation, other than the fundamental ones I have already named, develop as the result of experience of group working. They are not always envisaged when the group is formed.
Although the group idea began some time before the war started, its development. has, in the main, proceeded during the war. Some of the advantages which have accrued arise, to a certain extent, from war conditions. Some of them, possibly all, will probably continue in peace time, hut that remains to be seen.
The first, and probably the most outstanding, certainly the one which is most attractive from the material aspect, is the ability to handle contracts and, deal with blocks of traffic .so large ai to be outside the scope of any individual member. In the absence of a group, such work is inevitably passed to a large concern. With a group in being, the services of upwards of 1,000 tons carrying-capacity is at command.
Next in order of importance, in my view, is the mutual help which, as a matter .of principle, is rendered by members of a group to any one Of them who may be in any kind of trbuble. If a lorry breaks down en route, a telephone message to another, member will bring immediate help, either in the shape of a breakdown vehicle, owned either by one of the group or collectively, a lorry to take off the load, of a mechanic with the parts necessary to effect a roadside repair_
Spare parts are, in a sense, pooled. At any rate, those members who have them hold them-in readiness for corn_munal use. This is a measure of mutual assistance which has been of imniense value during the war, and its usefulness will not abate, -but rather enter upon a new phase when normal times return.
Grouping Provides Warehousing Benefits
The provision of warehousing facilities is another of the benefits of grouping. It is rare for the small' operator to be able to afford space-for that branch of the activities of road transport, and he suffers, accordingly, by having to pass on such traffic as might be his if he could providestorage at reasonable rates. In a group there is usually one member, at least, who has sforage space, but if not, the group, acting collectively, can provide it.
Bulk buying of supplies of all kinds, not even excluding vehicles, is claimed as another advantage of group membership. ThiS. I must confess, is one of the alleged benefits, about which I am not so happy. It is, in my view, a blemish upon the high principles which appear to underlay the actuating motives of most of those who are instrumental in .forming groups. The fact remains that most groups feature it as one of their activities, and I leave it at that.
The foregoing are the main material advantages which accrue to 'the small haulier who forms or joins a local group. There are many others, not so outstanding, which 'are none 'the less valuable to him.
It is important, however, not to overlook the broader aspects Of the subject. At the-risk of being regarded as pessimistic, / venture the Opinion that the small haulier is alter the war, to find himself in a somewhat perilous position. He is the stumbling block in the way of the ambitions of the 'larger combines, which are powerfully grouped and desirous of obtaining a monopoly.
The fact that there are small hauliers in large numbers throughout the country is a bar to the railways concluding a monopolistic road-rail agreement on rates and conditions, an agreement which, I am sure, would completely revolutionize road transport in a way that will not be good 'for the industry or the country.
The powers that be view the small haulier with considerable disfavour as
7 witness the declaration made by Lord' Leathers, Minister of War Transport, in the House of Lords, on October 27, last year. He said: " Nevertheless we must recognize that the existence of so many separate and small units in the road haulage industry vastly increased the difficulties of bringing about any permanent co-ordination between it and other forms of transport."
Grouping is, at once, the countermove and answer to these threats. A well-formed group can stand up to any corriblne and can deal with the machinations of the railway companies; groups acting in concert can much more effectively perform that function. Group formation is the answer to Lord Leathers's assertion.
Two Kinds of Group are in Existence The groups now in existence are of two kinds. There are those which are looSely knit, with a bare minimum of rules governing their conduct and pro' cedure, and which operate under a kind of gentleman's agreement. The others are limited companies, usually limited by shares, properly registered, with fairly rigid memorandum and articles of association.
Amongst the former are included the Harpenden, Biggleswade and, I believe, Nottingham Groups. The latter, which preponderate, include such as the North East Kent, already men , boned, Rochdale, Bolton, Derby. Sheffield, West Midland and London.
The chief features of the rules governing the Harpenden Group are:— one member is voted annually as controller, and an executive committee, comprising one-third of the members, with president, chairman and hon. secretary, is also elected annually. All work handed into the pool is invoiced by the operator with whom the traffic originates, and he deducts a commission of 5 per cent, to cover his expenses. Books of all members are open for inspection by any other member, if necessary, for confirmation of rates or to settle any dispute. In the event of repeat orders going to a mensber of the group who obtained the traffic in the first place from another member, the latter is to continue to draw his 5 per cent. commission. Information about rates, and of conditions in the industry, is pooled. Bath member retains his individuality and has inde pendent control of his finances. "
The Biggleswade Group has a generalpurposes committee, a finance committee of three, and a chairman and hon. secretary. All are elected annually. Each member retains his own customers and goodwill and all new traffic must be handed to the group for sharing. Operators booking orders retain 2i per cent, for booking fees and hand 2i per cent, into the group funds. The chairman allocates the traffic All traffic handed directly to the group is subject to a deduction of 5 per cent, of the proceeds,' to be paid into the group funds. Rates are fixed by the general-purposes committee. A member breaking any rule. or defaulting in any way, is liable to expulsion. Disposal of accrued funds is to ,be .determined at each annual general meeting. The books of the group are open for inspection at any time by any member.
When the Group Becomes a Company
Now let us turn to the alternative method of grouping, in which the group forms itself into a company with share capital. A typical example and one which appears to be becoming popular, is that initiated by the Rochdale Transport and Trading Co., Ltd., before the war. This company drew up its memorandum and articles of association following many years of trial of thealternative type of group, having decided. that the loosely knit kind of organization, working on gentlemen's agreements, was unsatisfactory. The articles, although they bear a war-time date, were drafted with a view to peacetime operation. I am informed that, amongst others, the North Fatat Kent Transport and Trading Co., Ltd., used these articles as a basis in the formation of its own group, and that more than a dozen copies are in circulation, in various parts of the country, where fresh groups are being formed.
Wide and comprehensive powers are taken in the memorandum and articles of association, as may be judged by the fact that there are no fewer than 25 items cited as being the objects for which the company is formed. Amongst them may be mentioned the provision of warehousing accommodation; the bulk purchase of supplies of all kinds; acting as a clearing house for members; handling traffics and work for or with the help of, its members; stabilization of 'rates: improvement of facilities and service by co-ordination of effort.
There is to be no interference with the businesses of individual members. It is stressed that the company is not a holding company but a servant company, owned by and not subservient
to its members, but set up tä 'serve their material interests.
The progress and spread of the movement to form groups is likely to be considerably accelerated by the inauguration of the National Conference of Road Transport Groups..
-The Conference has been formed with the primary object of the eXchatige of views between groups, and to provide for' mutual assistance. Emphasis is laid on the fact that each group is an entity and must remain so. Groups, to be satisfactory in operation, should be local. There is no desire or intention to form combinations of groups. The Conference is to have an advisory capacity and to be in no sense mandatory. It will refrain altogether from interference with the internal organization or procedure ,of the groups which are its members. The intention is to encourage groups to be self-supporting.
It strongly recommends that' all members of individual groups should become members of one or other of the existing associations. The Conference does not intend to perform any of the functions of the associations. It does not owe direct alliance to any, ' only in so far as the members of its constituent groups are members of associations. •
In this advisory capacity the Conference has already laid down what, in its view, should be the 'guiding principles to underlie the formation of groups, and the steps which shOuld be taken to assist in the 'formation of more groups and to bring them into the Conference.
A summary of these principles, and a statement concerning the steps to be taken to promote the formation of groups, was published in " The Cornmettial Motor" dated May 26:
Protecting the Small Man by Grouping
It is, however, important to note that, whilst it is true that those recommendations were the unanimous vote of the Conference, they were, in effect, and with practically no alteration, the carefully considered proposals of the chairman, Mr. F. Rudman. He holds the view that grouping is essential, even vital perhaps, to the protection and preservation of the small haulier on behalf of whom he is an ardent advocate. He is a member of the Rochdale Transport and .Trading Co_ Ltd., one of the premier groups of its kind, and has been "preaching the gospel " of the group movement for eight years.
He believes that, if group formation spreads until the movement becomes Nation-wide, and if the group characteristics remain as they are at present, and as he recommends them, they will, united in conference, become perhaps the strongest transport body in the country.
I think he is right, although I am still unhappy about the clause providing for buying supplies in bulk.