CASH or CREDIT
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by JANUS
COMMENTING on the recommendation by the Road Haulage Association of a 74 per cent. increase in rates, one of the national organizations representing the people who will have to meet the extra cost said that it would be bound to affect the prices of all kinds of goods. The reaction is natural. Nobody likes having to pay more and getting nothing better for it, and the contention must be true if it means that some addition, however small, is being made to the total burden of cost that the trader and manufacturer have to bear.
The exact importance of the addition is seldom set out, nor is any serious attempt made to calculate it. The shopper is not aware that he is buying transport as part of every purchase he makes. The reason may be that for many commodities the transport element is negligible. It may cost £1 or £2 a ton to convey a consignment of vegetables from farm to greengrocer. Only a mathematician would be interested in working out what tiny fraction of a penny this represented for each separate vegetable, let alone the further calculation of 74 per cent, of the fraction.
IT is the cheapness of transport that makes it feasible to bring goods half way round the world and still to compete with the home product. For the same reason, products manufactured in one place can be sold next door, or at the other end of the country, or even in another country, all at the same price. The slight difference that transport makes to the cost is ignored without risk.
There are some commodities to which this does not apply. The cost of materials taken from the earth and used in their raw state may be said in a sense to consist almost entirely of the transport element. It is also the case that some articles that are the end product of a long series of processes may require an equally long series of transport operations, each one adding its mite to the total cost. Even in these extreme cases the principle of cheap transport may not be affected_ Materials that do not require a process tend to be collected as near as possible to where they are to be used. The article that requires the shuttling backwards and forwards of many vehicles before it reaches the hands of the purchaser is likely to be expensive in any case. The transport element in the final price is still small_ ON a strictly cash basis, therefore, transport might seem unimportant. This is obviously an absurd construction to put upon the facts. Transport has played perhaps a more profound part than anything else in shaping the modern world and one reason has been the fact that it costs so little. Its value, to_be assessed properly, must be reckoned in Other than financial terms. The customer, whatever he may say to the contrary, does not set much store by the cost of transport. He has other andbetter reasons for thinking it important.
Much of what transport can do for him he tends to take for granted. His goods and produce may have to conform with exacting specifications, not merely, when they leave his premises but also when they arrive at their destination. There must be no deterioration on the way, and this may mean careful choice of vehicle. Reliability may also be a vital consideration, especially when there is a contract or a ship to catch. Among olher hazards are the breakdown azt4 of a vehicle or the complete loss of a consignment throul carelessness or misadventure.
If the goods do not arrive at the right time and in t right condition, the consignor usually finds that he h incurred a financial loss, apart from the possible loss further business. It would not be inappropriate to show t amount in his records as a transport cost. Such a procedu would bring home to the producer in cash terms exad what transport means to him. _ Most traders and manufacturers are well aware of wh is involved, even if they have offered no attempt at an exE appraisal.. The survey of members made by the Tradt Road Transport Association some time ago revealed th cost was only one and by no means the most irnporta of many reasons for choosing to operate under C licenc One inference that has been drawn from the survey is a the manufacturer regards his vehicles in exactly the sat way-. as any other tools. He likes to have them under I own control and ownership. In Other words, the cc yenience that might be sacrificed by relying on hired trai port is of more value than the presumably consideral higher Cost of running a fleet of vehicles exclusively I one's own products.
The haulier might wish that the trader, who sees real value of transport so clearly where his own vehic are concerned, would turn the same unjauncliced eye the transport he buys. There may be something in i haulier's case, allowing for the distaste that the hat shares with the rest of the human race at being asked pay more for something.
IF a material is unsatisfactory, or a tool perfor -ffi indifferently, Or :'a vcrorker is inecient, the manufactu soon realizes what is wrong and takes the appropriate acti whether or not it means hav,ing to spend more money. 7 activities of his transport department are not under eye to the same extent. He has no complaints so long the haulier who serves him complies with instructions.
The haulier himself may be struggling with many diffic ties. Over some of them he has no control, especially wh his vehicles are held up by increasing congestion. Ot problems may be more his own affair. He may not be a to afford to renew his vehicles and other equipment as of as he would like. He may find the competition severe feel compelled to retain unattractive traffic at unattrad rates than stand his vehicles up and lay his drivers ofl His customer may not wish to know about these thin He hands over the work, somehow or other the hau fulfils his part of the bargain, and there the matter re He looksat the request for an increase in rates in the so way as he looks at higher prices in the shops.He does regard the haulier's activities as part of his own busin that he would naturally try to Maintain at a high stanch even if he had to pay more.
If he is at all reasonable, the trader is bound to ai to the increased rate when he hears the reasons for it. haulier might aim to go beyond this point. He might s to make his customers proud of the people who carry t; goods, more consciously convinced of the true value transport and less concerned with what it means in pour shillings and pence.