Pitfalls for the Newcomer to Parcels Transport
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THE spirit of enterprise persists and indeed renews itself again and again. There _are, for example, young and energetic hauliers who arc ambitious to become express carriers. The preference for this branch arises no doubt from its being untouched by nationalization. The least I can say about those who are considering taking it up is that they are optimistic The prospect of finding a district not already well provided with transport for parcels and " smalls " and which holds promise as a field for exploitation by a carrier, must be remote indeed. Thus the chances of obtaining a licence to carry on such a business are slim..
Moreover, there is actually less scope in these days for the employment of the express carrier than there was immediately before the war. Then, "little and often" was the trader's principle as applied to his orders for 'goods. He economized by keeping his stocks low and relied on frequent deliveries of small quantities of goods to enable him to meet his trading needs. Now he still takes his deliveries in " little " but not "often."
Many readers, nevertheless, want to know all about parcels carrying, hence this treatise.
The scope of the articles will be limited in application to small operators.
Two Main 'Systems of Working There are two principal methods of operation. First, collection and delivery within a comparatively small specified area, involving traversing the same route day after day or perhaps covering two routes either so as to cover each route in one day or taking one route on one day and one on the next. According to the other method the oper4tor visits a .different district each day of the week.
The former applies particularly to industrial towns, large enough to provide sufficient business Co justify such frequent calls on the same 'customers. The second relates more • partieularly to Country Carriers, probably with headquarters within 'comparatively easy reach of a number of market towns: .
Nearly all the inquiries come from townsmen so again I can perhaps pardonably limit this article still further to a consideration of the Problem so far as they are affected. First let Me set down what I might stale to be the prime
• -•essentials to success. They are actually comprised within the one word "service." They call for regularity, punctuality and a minimum of time between the collection of a parcel and its delivery. That time Must not exceed 24 hours and preferably should be less.
It should be appreciated that this calls for continuous effort. long hours for the operator and the possession of a vehicle which is not likely to break down. That vehicle must be carefully and adequately maintained.
The next thing which those who enter into this business A32
must clearly understand is that they cannot stand alone. It is impossible for such an operator to pick and choose and lay down as his policy that he will collect and deliver only within his specified area and will refuse parcels which require to be-carried outside.
He must therefore enter into agreements with other parcels carriers in the locality that they will take from him and deliver parcels which are outside his scope of action. Usually too, he will find that such agreements are reciprocal, that those to whom he hands parcels for extra-area delivery will also give him parcels to deal with in his own district.
The next thing the operator must do is safeguard himself against the risks of his business. He must decide upon the conditions under which he will accept parcels. In this connection, also as a help in coming to agreements with other parcels carriers, he should endeavour to join the Road Haulage Association and become a member of the express carriers group. Specific conditions of carriage have been drawn up by that body and the operator would be well advised to adapt them and apply them to his own business.
It may be of interest to indicate some of the most important of these conditions so as to illustrate some of the snags against which operators are likely to come in this business.
Liability for Damage
Perhaps the most important condition is that which limits the liability of the operator in respect of claims for damages. The relative condition usually stipulates that he shall not be 'called upon to pay more than 10 if the consignment he lost or utterly destroyed. If any consignment be of greater value and the consignor desires to cover himself against loss, then he is requested to insure that consignment independently.
Again, the operator must cover himself against the risk of damage happening to any of the goods he is carrying as the result of fermentation or spontaneous combustion, loss of market, or damage to fragile articles. He should make it clear that he will not be liable for articles put into unsuitable cases or packages.
It is in this connection, perhaps, that the most risky wart of a parcels carrier's business occurs He is likely to be called upon to handle quite a number of perishable and fragile articles. If he did not protect himself by some such condition as that just indicated, he might beinvolved in claims for damages that would occur so frequently as to take away more than he could earn in the was' of reasonable and just profits.
Under another of these series of conditions the operator protects himself against claims for loss by the consignee, arising from delay in delivery due to conditiOns which are beyond his control. He protects himself against 'damage which may rise from the carriage of explosives, acid's, or other similar commodities and proviles that the consignee shall be liable in respect of any damage caused. to other goods as the result of action by any such dangerbtis load.
One clause of particular" interest in this series provides for just such co-operative working as between one operator and another as I have already mentioned. In the event of consignments in transit being handed to another carrier the operator concerned terminates his .M.vis responsibility for claims at the point of deliverY to that carrier.
• Lien on Goods
There are clauses which provide that delivery of goods must be capable of being effected without unnecessary labour or loss of time on the part of the carrier, also for a lien on goods held by the carrier against amounts due. There is also, of course, that universal clause rejecting liability for consequences due to war, riots, strikes and so on.
The foregoing are the principal conditions. Altogether there are a score, quite a number of them nearly as important as the above. Any operator can make himself acquainted with those in force if he obtains a tariff of rates from a properly established express carrier in his neighbourhood. He should obtain such a schedule and study the conditions carefully. I-le should also apply them to his own customers.
As is natural, most of the letters received relating to this class of work ask for assistance in scheduling rates. In a conversation I had the other day with Mr. H. Rossington, chairman of the National Conference of Road Transport Clearing Houses, this particular matter arose.
Mr. Rossington and his conference, as was reported in " The Commercial Motor" on March 19, have devised a scale of rates for ordinary mediumto long-distance traffics. He is advising all the members of his conference, hauliers as well as clearing houses, to put those rates into practice. He told me that he was engaged on endeavouring to build up a corresponding schedule of rates for express carriers and ventured to express the opinion that that was a difficult task.
No Formula for Fixing Charges I agreed heartily. During all the years in which I have been busily engaged in considering costs and rates for all sorts of traffics, I have never yet been able to arrive at a formula for calculating charges for "smalls." In trying to advise an operator entering this. business I have always, in this particular branch of haulage, „reversed the normal process and have recommended him to obtain a scale of chargei from some established operator and to work to those.
Whether he makes a success of his business or not depends upon the custom that he can obtain; that is to say, upon the number of parcels which he carries per journey. If that number and the revenue from the work at the rates quoted exceed his cost of operation and his overhead charges, then he will make a profit.
If he is not obtaining suffieient parcels to show a profit, the only way in which he can improve and make a success of his business is by devising means for obtaining more traffic, but he must never cut rates. The recommendation for good service and prompt delivery of goods, the kind of thing I referred to earlier in this article, is the only legitimate method he can adopt.
Overheads Nigher than Usual
The haulier who goes in for parcels carrying is in much the same position as a shopkeeper. He has certain overheads or establishment charges, and these, I Must emphasize, are much greater than those in any other branch of road haulage. In addition, he has the cost of operating his vehicle, and because, as a rule, be covers the same routes week by week, his mileage and his operating costs are static. They are not more one week than they are in another, always provided, of course, that he makes arrangements to set aside certain sums for future expenditure on maintenance, depreciation, tyre replacement, and so on, as I have always so strongly recommended. The totals of his expenses, therefore, are as static as those of the shopkeeper.
The rates he charges for his parcels are also, in my opinion, _fixed by circumstances, and it would be folly for him to cut the prevailing prices charged by other operators in his area. He may take it for granted that there is no excessive margin of profit in those rates. The schedules have been built up over the years under the stress of acute competition. It is unlikely that he will be able to cut them and still make a profit.
"1 he problem for the haulier is, then, as I have said, the same as that of the shopkeeper. He must find enough customers with a sufficient number of parcels for his collection and delivery to ensure that his revenue exceeds his expenses.
If revenue be insufficient, he has only one course open to him. tie must find a means for attracting a greater number of consignors and parcels for consignment. Whatever means he adopts, whether it be publicity, personal contacts or employment of effective agents, he will retain whatever success he achieves only by rendering good service to his customers.
The first, almost the Only, thing that can be done, therefore, in replying to an operator who inquires as to rates and the prospects of success, is to examine, through his eyes, the district in which he works, to plan a route or routes, and to assess the cost of operation. Then the operator himself must judge the possibility of his obtaining sufficient traffic to ensure a revenue meeting and passing the total of his expenditure.
It may well be that the newcomer will find difficulty in estinrating the prospective business, yet will elect to "have a go." in that case, some suggestions as to the steps to take to attract new business may be useful.
Agency Organization Needed
First, he must get people to work for him. He must come to terms with potential agent's, people having suitable premises where casual customers will he allowed to leave parcels for collection and call for parcels which have been delivered. Some centrally located general shopkeeper may be agreeable to serve in that capacity (for a consideration, no doubt!). Sometimes the coach hooking agent in the district can be the agent.
The operator must take steps to make himself, and his facilities, well known. His vehicle should carry suitable advertisements. He must advertise in the local papers and have posters on the local hoardings. He must persuade his agents to show his posters. All or any of these means must he used.
This publicity must be supplemented by personal contacts, by calls on people who are potential sources of business. In particular, small manufacturing businesses are useful in this respect. They have parcels for dispatch and often can make use of a carrier to collect the raw materials for their businesses. Even large concerns are sometimes glad to employ a local carrier. Certain types of trader can also be approached for business.
In the long run, however, the parcels carrier will find that the best method not only of consolidating his business but of getting additional work, is recommendation of satisfied customers. He will gain their goodwill in proportion to the extent of the facilities he offers and the reliability of the service he gives_ Good service will be found to involve almost inevitably provision for collection and ,delivery of parcels on the same day or, if nol that, collection in the evening and delivery the next morning. S.T.R.