JANUS
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WRITES
The haulier should as a matter of course follow his association's lead on rates'
THE effect of a public statement, like the size of a wave, can often be estimated Li the backwash. The announcement by hauliers of a 5 per cent increase in rates has achieved satisfactory notice, to judge from the adverse comments made upon it. The criticisms have been both political and commercial. Opponents of the Government's transport policy have treated the increase as evidence that hauliers are chiefly concerned to make even bigger profits than before now that the sphere of railway competition • is being reduced.
One or two bodies of traders have seized upon the increase as a justification for putting up their own prices. Reports attribute this reaction to the Wholesale Textile Association, whose members, it is said, must take full account of unwelcome factors in determining their own charges. The impression the critics seek to leave is that the transport element in their costs is so significant that any change must at once be reflected in the shop window. There is no hint that many of the critics carry their traffic for the most part in their own vehicles and are not directly affected by the decisions of hauliers. .
All the same, resistance to change in rates is natural. The trader does not like to think that he will have to pay one shilling in the pound more for his transport than he did previously. The haulier does not see the problem from the same point of view. His chronic difficulty is that, for all sorts of reasons, the level of his rates tends to fall when all other costs are rising. He pins little hope on an individual approach to his customers. The only impulse in what he thinks is the right direction is provided by the periodical recommendations of his association. These at least provide some kind of proof that whatever rates he happens to be charging at the moment ought to go up by an agreed percentage.
FIERCER COMPETITION In some fields of road transport, competition is much fiercer than in others. References sometimes made to the general level of rates, therefore, can be misleading. There are some hauliers, perhaps fortunate in the field in which they specialize, or perhaps wise enough to concentrate on the right sort of traffic and refuse the rest, whose rates over the past few years have comfortably kept pace with what is recommended. Others have found that the slide rule points the way to the bankruptcy court, and have been forced to fit their rates to the market. In this category are most of the small and comparatively new operators, with no organization to speak of, whose limited resources give them no alternative except to compete where the throng is greatest.
There is a wealth of meaning in the relaxed confidence with which British Road Services announced simply that "for parcels traffic a revised schedule of charges is being prepared for implementation as from June 1 ". While it is appreciated that a fixed tariff is the only practical method of charging for the carriage of smalls, B.R.S. was also aware that not many of its customers could even threaten to carry the traffic themselves, and that there was no possibility of other hauliers threatening to enter the parcels 1346
carrying business by offering cut rates. Operators already established would be imposing the same kind of increase as B.R.S., although their competition-was sufficiently keen to prevent over-charging.
General haulage charges, the B.R.S. statement continued, were related to the circumstances of individual traders' requirements. "They have of necessity to be separately negotiated." In other words, the hunt for traffic in this field is keen, perhaps too keen. A rates increase is not so much a question of what the costs justify as of what the haulier can get.
MANY DIFFERENT FORMS
The negotiations take many different forms, according to the type of operation. The operator with a schedule and a large number of customers is in a favourable position. At the other end of the scale is the operator most of whose traffic may come from one big organization with its own strong idea of the rates it is prepared to pay. The carriage of milk is controlled by a marketing board, which fixes the remuneration with individual operators and has sponsored joint machinery to decide cases in dispute and to make a joint assessment of costs. Contracts between a haulier and a customer normally incorporate agreed rates, and with some authorities the agreement has a rise-andfall clause, often related to the recommendations of the RBA. Rates Committee.
It can be no easy task for that Committee to hit upon a percentage figure fairly applicable to every commodity, to every type of operation, to long-distance and shortdistance work, and to reckoning by the ton or by the period for which a vehicle is hired. There is usually, a saving proviso that in some circumstances the recommended increase would not be sufficient. Specialized operators are then free to take the matter further, in the same way as the carriers of meat have recently decided that a more appropriate increase for them would be a if per cent, one reason possibly being the higher wages element in their costs.
The constant factor in an equation with many variables is the need for every operator from time to time to take stock of his rising costs and translate them into revised rates. His association does this for him and presents the result to the public in a manner that he would not find possible. The haulier should as a matter of course follow his association's lead on rates. He must have in the forefront of his mind the sad fact that there is no automatic economic principle by which his rewards will rise in keeping with his outlay; whereas the natural workings of competition will ensure to the customer the full financial benefit of any improvements in vehicle performance or in operating techniques, apart from the kind of Gresham's Law by which the bad rate tends to drive out the good.
Above all, the haulier must not be led into thinking that the reasonable increase he is urged to impose will make any appreciable difference in the price of goods in the shops. A rate of /3 per ton is something like one-third of a penny per lb., and a rise of 5 per cent onthis is negligible.