New chapter in freight marketing
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HE DECISION by Southern RS to launch its Clearreight haulage brokerage ervice to provide clearance f those vexing small lots of a In or two will provoke some ay smiles for the old sweats .1 the industry.
The imbalance of traffic, into nd out of the London region, as been a fact of life with which Dad and rail operators have een confronted for decades.
The London region absorbs luch more traffic than it enerates; that is why many Dad haulage operators in the irovinces have been reluctant to arry freight — unless at a high ate — into the South East.
Backloading rates, having egard to the time often taken to let a load in or around London, lave been too low.
:lassic situation It is difficult to see how things :ould have been otherwise in a :lassie supply and demand thuation. With far more vehicles ;eeking loads than loads avail)ble, those with traffic for the )rovinces were in a strong )osition to pay minimal rates. Vlany operators within 120 -niles of London found it more Drofitable — even with relatively ow-rated traffic — to return to Dase from London empty, with 311 speed.
Regional imbalances in traffic in and out exist in many parts Df Britain, thanks to the haphaEard development of industry in the last 150 years. The South East is merely worse affected than 'others.
The market research undertaken by Southern BRS shows that general haulage now represents only about 35 per cent of the total business. Multi-role operations, often with specialised equipment and vehicles, or with added services such as warehousing and distri bution, are now making the running. A recent GLC survey suggested that only 25 per cent of freight carried into Greater London was moved on general haulage vehicles operated for hire and reward.
Cottage industry
Southern BRS point out that of the half-million operators' licensed vehicles running in the UK, about a quarter ply for hire and reward. Eighty per cent of these are run by companies with only one or two vehicles.
Road haulage, essentially, is a cottage industry.
The results of this fragmentation, allied with the traffic imbalances mentioned, suggest that there are 100,000 vehicles plying for general haulage trade running at less than optimal efficiency. There are widely varying rates of hire, though vehicle operating costs are broadly constant, in relation to mileage covered. Road congestion is worsened by the proliferation of empty or partly loaded vehicles, though, in national terms, some empty running is unavoidable.
150 per cent rise . Cost increases, logged by Southern BRS since 1972, show that vehicle replacement costs have increased by up to 150 per cent; diesel fuel is up by 132 per cent; drivers' wages by 97 per cent. Vehicle licences are up by 75 per cent and spare parts cost 183 per cent more, with no prospect of any easement if wages in the vehicle manufacturing industry continue to escalate.
Southern BRS says the industry is now suffering casualties at an alarming rate, with new entrants diminishing and withdrawals and bankruptcies increasing.
Great advantage
The great advantage of the Clearfreight brokerage system is that customers with traffic, and other RHA or FTA operators with small lots to move, will now be able to phone their nearest Clearfreight depot in Southern BRS and leave the rest to them. The traffic will be aggregated to destination areas and, hopefully, delivered within a couple of days, though I suspect there may still be oddments which will not be done as quickly at the generally standardised tariffs envisaged. (It has always been possible to shift traffic for a price; customers with less than a ton will have to pay Southern BRS at the tonnage rate.) Southern BRS is banking on an upturn in the economy which may coincide with a shortfall in vehicle capacity because of the withdrawal of numerous operators — professional and own-account—as a consequence of the years of recession and EEC-type regulations.
Timing vital
If, at a stroke, operators with small lot problems can be helped and the publicity generated attracts more large customers to the BRS network, then this is a fine exercise in anticipatory marketing.
The timing is clearly important, for the general problem has existed for many years. What is proposed, today, woul have made some sense at ar time, though the market oppo tunity, today, may be better.
Clearing houses in Londc and the Home Counties will ni be inspired to cheer the BR venture, which could put sort firms out of business. TIclearing houses, in theory, cou have aggregated small It traffic, thus denying BRS if kudos of a sharpened marketir image. Against that, it remair to be seen Whether the CleE freight project will pay off. A f vehicle load of small lots fc say, 10 dropping points will I time-consuming. Can it k costed to be generally prof able?
When the BRS gener haulage organisation was set t in the early years of nationalis tion, an elaborate, pione( network of teleprinter terminE linked traffic offices up al down the country.
Plugging in
In theory, nothing prevent free enterprise hauliers frc "plugging in" to this system, take advantage of pre-advice vehicles and a request for ret( load facihties.
But BRS management vk not noticeably keen to extent nationalised facility to all mers. Indeed, the extens traffic control system design to maximise vehicle runni efficiency, largely became rra bund because BRS drivers, some areas, were not inclined welcome operational efficier of the total system if it result in less originated traffic ft" their particular depot.
It is hard to condemn reaction of BRS drivers in tht circumstances, though it may fair to argue that the tc efficiency and profitability their publicly owned enterpr was, subsequently, seriou damaged.
Today, BRS is not regarc as The commercial threat to f enterprise that it was felt to IN the 1950s and 1960s. B managers sit, side by side, IA colleagues employed by R and FTA member companies