Forming and Operating a Hauliers' Pool
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Some First-hand Information Dealing With the Pradical Aspects of the Financial and Administrative Sides of Grouping By Bernard Elston, Chairman, The Don Valley Hauliers' Pool, Ltd.
THE advantages of road haulage pools or groups to the individual haulier, and the industry, as a whole, have
. already been dealt with in your pages, and therefore are too obvious to be laboured here.
However, it may be of assistance to hauliers in various parts of the country, who may contemplate forming pools, if I briefly outline the steps taken in connection with the formation of the Don Valley Hauliers' Pool, Ltd.
In the early months of 1943 one or two men who were enthusiastic on the subject got together to discuss the possibilities of forming a co-operative haulage pool, and gradually formulated a policy and a programme.
In due course, meetings of local hauliers were convened when the proposals were freely debated and mutually agreed upon. These were as follow:— (1) Six directors designate were appointed by popular vote, the voting papers being so drawn up that at least one " small operator " (not more than three vehicles) must be elected, and, in actual practice, two such were elected to the proposed board tO guard the interests of the small man.
(2) All directors were to give their services free.
(3) Members were to pool their work and the Pool's ' traffic controller to allocate it to members in the best possible way to cut down empty running to the minimum, but in conjunction with the principle that those members who put work into the Pool should he given as much of that work as they could handle, or its equivalent in earning power.
(4) The Pool would invoice all the work, collect the money and disburse it to those concerned less a provisional 3i per cent. to cover working costs.
The Pool Should Be Non-profit
making in Character
(6) The Pool itself was to make a() profit, and all surplus of revenue over working costs was to be returned to members in the same ratio as ,their . contributions to revenue by way of the 31 per cent. levy.
(6) After the Articles of Association had been vetted and approved by the M.O.W.T., the company was registered as a private limited company in January, 1944. The submission of Articles to the M.O.W.T. was not essential and certainly caused some delay, but as we had received considerable encouragement and help from officials of that Ministry, we felt that this courtesy was due.
(7) Our share capital is purely nominal—£300. Being a private limited company we are limited to 50 members., and we are at that full strength, and as we embrace only some 160 vehicles the paid-up capital of one share per vehicle was insufficient and all six directors advanced £100 each, on loan, to cover formation expenses and to provide a nominal working capital.
(8) Membership is limited to hauliers operating on either A or B licences or their present-day equivalent, and who draw their fuel from the Doncaster sub-district office of the M.O.W,T. which covers the Don Valley district, thus the Pool becomes a self-contained " group " with the traffic controller as " group organizer."
(9) Shareholding is strictly limited to one share for every vehicle operating through the Pool. Shares have no earning capacity whatever, but merely carry voting powers —one vote per share. It should be noted that, whereas a member may own and operate a fleet of, say, 12 vehicles, and if, say, six of them be fully engaged on some contract work, domestic coal deliveries and BO Cill, and the other six be operated through the Pool, then that member is limited to six shares and six votes . . . thus every member has equal voice in the conduct of the company in ratio to his working capacity for the company. .
• £20 (10) Although the directors have full powers and authority to conduct the business of the company in the manner they deem fit and proper, we have made a practice of holding monthly meetings of members, when any point of importance is brought forward and discussed and members given full opportunity to voice their opinions and take a vote on any matter if they so desire. This principle has produced a very democratic organization with the ideal "family business spirit" in which it is most pleasant to work.
( 1 I) This is very largely a sand, gravel and coal area. so that the majority of our members operate tippers, but flats are included, and work engaged in, suitable for them.
(12) Although we have not been operating for quite a full year, we can now estimate that the full working costs of the company, including the formation expenses, office furniture a,nd equipment and similar non-recurring expenses, should nOt exceed 2 per cent, of the company's turnover. The company is housed in a suite of three rooms in the centre of Doncaster, has two telephone lines installed and the staff comprises the traffic controller and'five assistants; Nature of the Business Makes for Easy Working The nature of our main work, the haulage of sand, gravel, stone and similar ccmstructional materials on short and medium-distance journeys, and opencast coal from various South Yorkshire sites direct for the M.O.W.T., makes it easier to operate as here outlined than would be the case if the bulk of our work was longer-distance trails
As an example ofiour working, let me assume for a moment that the total earnings of the company in any given period Were, say ... ... ••• 100,000 At 31 per cent, the company's revenue
would be ... ... ... 3,750 Say the working expenses were ... 2,000 Surplus for distribution to members ... £1,750
Therefore, for every 21 a member had contributed to the revenue by way of the 31 per cent, levy on his individual earnings, he would receive 9s. 4d.
For the balance retained for working costs, in the case of this particular, example exactly 2 per cent., the member is found work, his invoicing and general clerical work connected with " sales is done for him, the money is collected and paid to him, and on this latter point it is obvious that the Pool can bring greater preure to bear on any bad payer than can an individual haulier. These advantages are, of course, on top of all the others to be gained from the principle of a tightly knit and friendly organization standing solidly together to protect its rights and interests individually and collectively as has been dealt with by previous writers.
If anyone is contemplating forming a pool on these " co-operative " lines to operate for the profit of the individual member rather than for the profit of a group of shareholders and directors, I should be pleased to give him any assistance within my power that be may care to ask for.
Whilst the grouping of small and large interests into strictly commercial organizations—" combines," " monopolies," or whatever one cares to call them—may serve a good purpose in the structure of the industry, we, here in Doncaster, feel that we can give equal, if not better service" to all needing efficient and economic transport, whilst at the same time preserving our individuality, clientele and interests by operating along the lines quoted. Once we had outlined our policy and programme, we received every encouragement and support from the M.O.W.T. which has been held ever since. Because, by pooling the work itself, we can cut down empty running and thereby save petrol and rubber, and the fact that we operate for the benefit and profit of the individual memberoperator may have something to do with the friendly support we receive from the Ministry.
In conclusion, I must add that we could not have achieved the success we have done had not the directors devoted a considerable amount of their time at great personal inconvenience and at no small expense to the ajfairs of the company, Therefore, I strongly urge anyone nominated to a seat on the board of a koposed pool to consider carefully whether he can spare the time and has the facilities to carry out what will be found to be both
responsible and strenuous duties without payment other than the generous appreciation of the members.
It is rather sad to have to say that this huge industry, one of the largest and most important in the economic structure of the country„ because it is composed of thousands of small units, is, or at any rate was, regarded by the user as of but little account—its status apparently having been established on that of the owner-driveroperator. Speaking rather broadly out of the past, it was about the only industry where the customer said " my rate is so-and-so" instead of asking the question " what is your rate? "
Therefore, anyone having the necessary time and facilities, and the interests of the road-haulage industry at heart and a burning desire to gain for it its proper status, will find the work of a director fascinating and worthwhile.