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Small v big Luliers...

Is big beautiful? Are owner-driv te-cutting cowboys?

Peter Land: This is a group of people that Commercial Motor has brought together. I don't think they her been selected for any particular reason except to reflect a fairly wide. range of the transport business. The ob jective is to have a very freeranging discussion around the article that was produced in August in Commercial Motor magazine headed "The Good, The Bad and The Ugly". There were a number of points brought out

in that article that, it is felt, coul usefully be discussed in this i formal setting and about whic we might reach some co elusions.

I work for the Nation Freight Corporation. By pr fession I'm a chartered accpuntant and I have been around :he business world since 1950. spen: 14 years in the menu'acturing industries, the textile rvorld and the rubber industry pefore joining British Railways in 1964 as the chief accountant of the Western Railway (during the Beeching era).

Dick Grace: My company is Lion Cartage Ltd, in South East London, and was established by my father in 1916. I joined the company in 1936 and I am now the managing director. We have 20 authorised licences but owing to the recession we have greatly reduced the number of specified vehicles. I have a small staff, we do o own maintenance and, al completely self-contained. IA are general hauliers who w carry anything to any place, b we do specialise at the momel in the London and Home Coul ties area.

Geoff Fry: I am Geoff Fry; rr business is just outside Cai terbury. I have been associat€ with the haulage industry for 2 years, the last five years as owner-driver. I am in gener haulage. The staff consists my son and myself each wi. one vehicle. We have on E average eight regular custome who keep us employed.

Our customers say they u us because they have suffered the hands of larger compani putting out sub-contracting disreputable hauliers.

Gerry Stacey: My transpc business is general haulage. I. based at Cheshunt, Hertfor shire. I started off in the main a tipper operator and we s work for the original firm that were contracted to in 1946 started in transport as a fitte mate in 1939.

I now have 21 vehicles, 18 which are fully occupied. C turnover is something in t region of £250,000 a year.

John Silbermann: My businr is known in the transport wo as Hallett Silbermann Ltd a we are part of a bigc operation. We also started 1946; I founded the busini and, therefore, to that extent are in the good company self-made operators. 1

operate from Hatfield, Lond, Rotherham and Birmingha Our main interests are he haulage and abnormal Io where we are at the lower enc the scale compared with giants. We go up to about 1 tons gross trains.

We also do general haula we operate in the UK as wel on the European continent r we operate something like vehicles, and a very la number of trailers. Regular c tomers I would put in the reg of 200.

Number of employees pure haulage is in the regio, 110, but there are many ar lary services where we h other employees. We dc

really go in for casual work such; we very firmly believ, the philosophy that it is el operator's job to select his r market and to go and get business for which he is I suited. However, we

amine casual work offered to and if it fits in with our pattern will do it.

I serve on a number of cornttees including the national aria and the executive board the Road Haulage Association d am currently one of the two e-chairmen.

ike Wells: I am an ex-owner ver. To clarify that, I was in siness as an owner-driver but 3ided to pull out after doing sums and discovering that business just did not pay. I s in the tipper business, g-distance. work. I operated a vehicle and I worked ough a sub-contracting flier.

ter Land: If I could now try to the scene by giving a little cis of the article that has sed what I believe in ComTial Motor was one of the gest postbags that they've r had.

Ihe article was published on just 12 and it made some fences to a number of things : John Silbermann had been ing for some time. It is ar

gued with some force that because a licence can only be refused if it can be shown that the .applicant is an unfit person or has insufficient funds, it is unlikely to be refused. A bad record is difficult to prove if the applicant is-a newcomer, and it is fairly easy today to obtain finance for resources.

The article said customers are reluctant to face increases in rates and charges. Rates are being set in a highly competitive situation and hauliers are operating in a market much removed from "cost plus" for establishing selling prices.

The article argues that an operator's income must always exceed his costs if he is to remain in business. The level of profit that he makes must enable him to be paid for the work that he does, to be paid an interest on any investment in the business be it his own or that of a financier and it must enable ,him to replace any resources that he uses up in earning his revenue.

His revenue is fixed by the market and as profit is an essential feature of the business it is essential for an operator to understand what his costs are.

Costs comprise two groups: those that are the regular outgoings that can be readily seen on a weekly, daily, monthly basis and those items for which he must provide for the future, and introduces the replacement depreciation argument. Actual outlays are obvious, and the most important item for which he must put something aside is to provide for the replacement of his vehicles which have been very severely hit by inflation.

The capital cost of equipment has been roughly doubling every three to four years and in defining the cost of the business it is argued that the depreciation provision that goes into forming the basis of the selling price should be at least 25 per cent higher than that provided by a historical cost basis.

Those are all figures that can be contested but the principle that one is really after is that the provision in the minimum selling price must cover the replacement of the vehicle and not the provision of the original vehicle costs.

The article closes by saying that an operator, if he works for rates which do not reflect his real costs, his wages and the interest on his investment, is slowly going bankrupt and is bringing the whole rate structure or selling price structure of the industry down.

I think the major points from subsequent correspondence was the allegation that big companies are forcing owner-drivers to work at uneconomic rates. This is caused because the owner-driver is desperate to obtain cash flow.

Another line was the ease of entry argument which said that knuckle rapping by the Licensing Authority is no deterrent at all. It was also argued that sub contractors are being forced to go for their principal's business by undercutting the rate because the principal is taking more than a reasonable share of the rate.

A final, slightly different point that was made was that the Employment Protection Act encourages sub-contracting to owner-drivers because in this way the principal can avoid many of his responsibilities under the Employment Protection Act.

I presume the writer meant redundancy costs in the event of disposing of his labour..

This identifies to me t basic items: one is the eas entry, and then we could haps talk about sub-contract and if we have'any time left fixing of the selling price.

Geoff Fry: I found entry e When I applied for a sec vehicle on my 0 licence, all I was a Ministry Inspector me from the South East L see whether I had facilities two vehicles, and I satisfied h I showed him round the mises, showed hitt) the sched sheets for the vehicles I then. We discussed the haul trade in general and my perience as a qualified engin and that was it No problem

Mike Wells: I got in too easil applied for an 0 licence March 1975. I filled in all forms as requested, sent th through to the LA; eight we later back came an operat licence.

John Silbermann: That's big difference of the pre-19 situation and the situation of Transport Act and operato

nce under which we now .ction. In the old days everyiy was virtually invited to ect. If one objected there was aasonable chance of keeping undesirable competitor out. Today objections are almost a )cl duck from the word go. -y few objections have ever ?.11 successful. May I just say

s by way of explanation, I it want to be misunderstood it I'm in favour of the old ;tern, against the new system t the cardinal difference of lay is that objections are a n-starter.

,ter Land: Is there a view iangst us that there is a need protect those who are in the siness against those who sh to enter?

ck Grace: I must admit to xed views on this because if meone wants to come into the Justry they should be helped. :Iped by advice, even an offi)1 inquiry to see whether they ve got the capabilities and the lance. New applicants are like ung people, when they apply r a job they are told "You're no )od, you've got no ex!Hence' How do they acquire exirience?

erry Stacey: I don't believe in em just coming in anyhow, ?fling a vehicle and going to ork without knowing what ey're doing. I hold the view at when a person applies for a ;ence they should be given it nder "probation'', that for

If a sensible young man omes to me for assistance, rovided he can prove himself 41 help him. The established an can help a lot; I think iere's enough legislation today tithout loading people with lore paperwork and more )rms to fill in. The legislation is !ready there. The local council hecks to see if the premises neet the vehicle requirements. 'he first thing the vehicle xaminer says when he comes lownto view, is: "Where are ,ou going to keep the ,ehicles?'

This is enough to deter inybody who thinks about ieeping lorries in the local pub rard or at the back of somebody )Ise's premises. The fact that he bloke's a good driver ioesn't necessarily mean he's joing to be a good operator. He's got to have a bit of backing somewhere around.

There were hauliers who started in my day had £100 and borrowed £100. He would probably need £1,000 today and borrow £1,000 but it's the same principle. I don't think you can limit him to finances. It's a matter of know-how, and he'll only get that by experience; if he doesn't get it in the first 18 months, he's gone.

Peter Land: Surely one of the causes for examination of a person's ability to enter the business should be his ability to administer his business to survive.

John Silbermann: I believe it is every operator's duty and every businessman's duty to survive. In the nature of haulage it is quite possible to appear to survive and be on a firm road to bankruptcy, sometimes for a number of years, before it actually happens.

Therefore, I am entirely satisfied that the first duty of all persons venturing into haulage is that they must be able to do simple sums and know what it costs to operate a vehicle, what money they need to put aside to replace the vehicle, and what money by way of profit they want for themselves.

Unless they can do this sum in advance then they are not going to structure the prices. But is it too easy to enter the industry? It's necessary to view haulage differently from other industries. I believe that in a free society it must be possible for anybody to learn and enter any trade or profession. There should be no permanent refusals.

However, haulage is different in so much as its business takes place on the public roads. We have a first duty to the public; we cannot have a jungle where the public and property is put at risk. I'm thinking not only of physical damage to people and property but of the goods that we carry that are lost or stolen, where claims cannot be met as a result of accidents or faulty insurances.

All sorts of innocent people can get hurt, if the haulier doesn't do his administration properly.

We are a national lifeline; haulage is the lifeline on which Great Britain lives and if we don't guard that lifeline and maintain it in reasonably good shape we are cutting the throat of the nation. And coupled with that is that all round this table and all over the country are lots of people who have learned by bitter experience over a lifetime in the industry — that experience has made them good operators.

If we are going to keep on letting them trade in an atmosphere where they regularly go broke we will never pass the expertise on to the next generation. Therefore, we will eventually have a very poor and weak industry that will never be viable. This is the sort of situation we have had on and off for 60 years under both the Acts of Parliament of 1933 and 1968.

I think there is a duty for the haulage industry alone and society to find a formula whereby entry becomes controlled to the extent that it provides for a stable industry but remains accessible to all who are worthy of coming in. But this is the compromise so very hard to find. For example, two or three of us round this table, myself included, started from nothing, had to fight our way in against a very difficult system. We resented it very much at the time.

We have to find a formula on this subject of ease of entry. Take a leaf out of the book of other professions — perhaps the dentist, the architects, the surveyors, who have over centuries admittedly, not only over this century, evolved the professionalism whereby they police and control their own way of going on.

I can't help but feel at the end of the day a haulage industry which is self-policing may be the healthiest of all, provided that isn't abused by making the few that are in it rich and safe and keeping all competition out. Peter Land: As opinions have been expressed no one has mentioned the professional society that has been with us a long time, the Chartered Institute of Transport. Could their assistance not be recruited in the interests of competence? The other thing that no one has mentioned of course are the new regulations that are coming in from January 1 on Certificates of Competence.

Dick Grace: I feel that the RHA is really the only organisation where the owner-driver can be served. I am surprised that more of them don't join and take a greater interest in it.

To belong to the CIT you have got to have qualifications; the same applies to the Institute of Traffic Administration. This, of course, does not apply tc RHA.

I can go back many many years when I viewed every haulier with suspicion. And ther my father pushed me forward tc go on one of the RHA sub-are committees and I got to know •i number of hauliers. 1 founc them to be genuine people whc discuss each other's problems.

I served on various commit tees right the way through ontc

the national council and I fount the same thing in the nationa council. They are people witl similar problems and I found if wanted advice it would be freel, _given. I feel that it's the onl' organisation we can work with.

Geoff Fry: You ask why are w not RHA members; well, it' mainly that when I get down t the nitty-gritty I find that larg operators and RHA member are undercutting the ownei driver. They, in turn, are of ering the work out to owne drivers at cut rates that the themselves can't possibl operate on.

Peter Land: Can we just try an clear the one other point asked? Have you any though on these new regulations th, are being proposed on ease entry?

John Silberman : I have a gre scepticism about what is no becoming known as the CPI the Certificate of Profession Competence. From January 1978, all vehicle operators wi an 0 licence will be able to clai what is known as "grandfath rights" to whatever level licence they want their manac to hold. They may even cla provisionally for more than o man. So, I suspect, from January 1978 for many years ahead there will be a very large pool of spare licensed managers or certificated persons who are considered competent. Until that pool is exhausted there will be no shortage.

Alongside that all the training' establishments, training boards, technical colleges and so forth are busily training new youngsters at a moderate rate vvho will get their certificate. Therefore the very thing which zould make it bite does not exist — the threat that a firm who antrust their management control to a certificated manager Nil be told by him: "I am not 3repared to risk my certificate Dy breaking the law and you -night lose your 0 licence."

That firm will have a pool of ;ertificated managers and there rvill be plenty of others standing )utside knocking at the door vaiting to take the job. The RHA ind senior civil servants were ighting this battle and the RHA ost. We tried to make them Jnderstand that there has to be much greater scrutiny of those vho are to be given the grandether rights.

There has to be a substantial lifferentiation between those vho carried in the past for ownccount only and for those who want to carry for hire and reward. For example, what we rould have thought would have ,een right now would have been very simple declaration. When ou apply for your grandfather ghts (CPC) say "Yes" in 1975 r whenever the test year was, I carried loads for hire and award" or "No I did not".

Then in accordance with that ) be given a general certificate r a limited one for own-account nly. But that's not the case; verybody who has ever carried single load for hire and reward the past will now be entitled ) a full CPC and to me that is le opposite to what common ?rise dictates.

What we are really all saying that entry should be open to I those who can legitimately .3rsuade authority whoever that , whether its the Ministry or ade association or whatever. Ttrants must persuade that Jthority that they intend and we an adequate knowledge to irry on that business profitably order to survive.

ster Land: I would summarise r saying that I don't think any us are seeking protectionism at prevents people coming in, it we want reliable people ming in. I think we've said 3t we want somehow or other

to see a standard set that reflects ability, reflects an operational and maintenance resource base, and reflects an administrative ability and plan to continue in the business over some period of time.

So we're looking for a stable industry but one that is accessible for people to get in. We do not wish to put up any barriers but somehow overriding this we see the need for some kind of apprenticeship, some sort of R HA/ FTA involvement. We tend to reject the CIT as being involved because mainly they are too broadly based.

The RHA and FTA are the people who are really close to the industry and would be much better judges of standards; we are arguing for a high-quality self-policing industry. I don't think we see the new proposals as being very helpful towards solving this problem. We are convinced that entry is far too easy at the moment, and that this is against all social interest.

Mike Wells: I think there should be a test or examination set by the Department of Transport and conducted by the Ministry on their premises. This would deter those who were not capable.

Peter Land: We must judge this against our earlier arguments about the need for experience; your point must be additional to the other qualifications.

Can we move on to subcontracting? Could we begin by considering the responsibilities of a sub-contractor, and the responsibilities of his principal, the man who employs him?

John Silbermann: My experience is that the main haulier relationship with the subcontractor is a two-way mistrust; the sub-contractor invariably starts off thinking he's being robbed of a fair price for the job, he's being given all the rubbish work, and the main haulier invariably is frightened that the sub-contractor will go direct to his customer and undercut the rates.

Mike Wells: Well., in my opinion, the principal haulier is Mr Naughty or Mr Nasty. The owner-driver works for them at their cut rates and after a period he does his sums as I did and finds that it isn't paying. So he decides to get out.

He is quite prepared then to work for lower rates than the original customer offered, because he's already been paid that by the principal contractor. The principal hauliers subcontract the work because they are not prepared to work for the rates themselves.

Geoff Fry: That is exactly what happens. The owner-driver who is looking for work accepts the lower rates, but once he does this, it is the beginning of the end. I had a discussion with a large Midlands manufacturer quite recently and my very words were "If I want to go bankrupt I will sit at home in comfort smoking a cigar instead of driving the motorways at cut rates."' Once a man has committed himself to a vehicle he's got to start fighting for the income. I won't cut a rate, I won't work at any low price and I won't get out. I've had a vehicle standing idle for five weeks rather than run at a loss but I don't lose money directly because I get stuck in and I do a lOt of maintenance work, and things that need doing in two months time, I save money by doing it then. I am still earning money in a roundabout way which in turn is better than running at a loss.

Peter Land: I can understand the owner-drivers' problems. If you're a lone operator and you haven't any cash coming in for your work at the end of the week you've got problems, because your cash flow problem is right with you on Friday night!

Geoff Fry: This is what happens to a lot of them. I am in the fortunate position whereby finances are not a problem. The biggest problem actually is fighting off finance companies who want to finance me for a new vehicle. But I know full well if I were to take on new vehicles, I could get two, three, four or five, but I don't feel I could administer the fleet effi myself, up to the standar now give I would rathe with two vehicles.

Gerry Stacey: The bi sub-contracting offende I've known is the trailer h the person who has no v of his own, pays no tax o rance. He never tires of ting you to work roun clock. He uses the same the time, exploits hi openly admits he exploits The rates that are offer very often not negotiable expect him to run all over shire and then back to Do drop the trailer at Shee The drivers are encourag work over hours becaus want the trailer back. Nine out of ten if you employ d and sub-contract, the next you know the driver's do on his own-account.

These funny subbies h very large list of operator are only too pleased to fig against the other all the ti there are any GV9s issued trailer it's not their fault down to you. This is wha get all the time.

If you work for a haulie expect to get 10 per ce your normal rate. The trou when you get two or three contracts on one load there's three lots of rates th got on before you begin. T where you fall on your face Mike Wells: These contracting hauliers, the not satisfied with 10, 20 or 30 per cent off the rates are going to go on to make profits from selling fuel, doing repairs, spares, sh ropes, hiring trailers. There end to where they will o prepared to go to exploit owner-driver.

Dick Grace: I suppose I a other end of the scale. If o my customers came along t and offered me a job in an which I don't operate I first t see if there's some friend w operating in that area and t ask him what his rate is so t is no undercutting. I put a b top for ordinary office admi ration but f will not do it at a that might not work. I only to give work away to peo know I can trust.

John Silbermann: I think would solve all our proble and they are repeating all time, when we stop s contractors saying to the haulier, "What will you me?" If you can get people t heir sums and name their own irice that will solve the pro)Iems. If they can't get their )wn price they should keep their notors in the yard, the same as 3eoff does. I'm sorry it may ound high-handed, after 30 rears of experience to say that I (now the answers but we've all lad to learn from bitter exoerience.

The sooner the new operator or sometimes the old operator, who has never learnt, gets round to learning how to do the simple sum or to fix his price he's on the way to solving his problems. The only other way is that as Mike has done, he draws his money out of the business.

We've reduced our fleet by several dozen vehicles in the last few years and I'm not the only one because when you come up against the impossible situation where you can't get the price that you calculated then it's better to draw your money out and buy national savings certificates.

Peter Land: I think there is one very important point and it's coming out very strongly. That is the moral courage that's needed to back up against the wall. We all know its the right thing to do, but that takes enormous moral courage if you have a cash-flow problem.

We also heard that there are people inviting people to participate in sin. There are the tempters around who keep on saying, "Put the price down a bit and you can have the job." The sub-contractor shouldn't work like that, he shouldn't say "How much will you give me?" He should say "This is my price'' and stick to it.

Let us say that that is the problem we've identified. What's the solution to it? Dick has given us some sort of answer; he said in effect, "I have got a register of reliable sub-contractors who I know aren't going to go bust. I can allow them to do the job and I will add a small amount on top of their price in order to cover the overheads:' John Silbermann: Dick relies on the sub-contractor to do his sums first, then he asks the customer for that rate plus a bit more, and for my part good luck to Dick if he can get 50 per cent on top. That's between Dick and his customer. But Dick is not doing the sums in this case.

Geoff Fry: I find BRS invariably give me a good rate, and sometimes after I've done the job! I've often had rates given to me after leading. In fact I can recall one particular load, early in 1976, where they put the load on the trailer and I made them take it off when I heard the rate. I emptied the load off, took the vehicle back to the yard and laid it up.

Mike Wells: Everyone, no matter who it is, main contractor, sub-contractor, forwarding agent or manufacturer, they all want to dictate their rates to the owner-driver.

Geoff Fry: And as long as there's anybody who will come in and accept their rate they'll get away with it. We come back to what Gerry says about the chappie here who has no rolling stock at all, no 0 licences. He's making more money and working less than any of us.

Gerry Stacey: If I can just make a point here, you go into a tobacconists you pay what they ask for and this is how it should be in haulage. When people tell me the rate, if I can't run at their rate I don't do the work. I have a large yard and I don't care if all my lorries stand idle for a day or more because I know if I send my drivers out on a cut-rate job in the morning by tonight I will have lost a good job and it's no good at all. My rates are all fixed on one simple formula. The job must be profitable.

John Silbermann: If anybody knew a simple answer it would long ago have been found, but I do believe if there's any answer to be found, it can only be found in taking a leaf out of the book of the trade unions. I know they get blamed for many things: they are not necessarily a popular example to hold up but they have succeeded over 100 years of activity in getting a fair reward, for their members for their labour.

I think the haulier is in the same position as the worker in trade union membership, whereby they stand shoulder to shoulder in some sort of body. I am bluntly and honestly advocating the RHA as being the major body recognised legally by statute in the Transport Act and recognised by fact as being the practical representative of the profession. Unless people join it and put something into it, rather than asking, "What's it going to do for me?," we will never get there.

It's the only way of getting all hauliers together on the same wavelength, educating each other, and one day reaching the sort of situation that we are striving for. We should know our costs; we work out our prices and stick to them in the faith that our fellow hauliers are going to back us up,

Peter Land: Would a significant force of small operators be prepared to say -This is the price, a fair price and if you don't like it we don't want the Ob." Is there any way in which one could register the sub-contractors who know their business, understand their, costs who are prepared to give a fair price which will result in an appropriate price being given by the principal. Would you think of the RHA registering the small subcontractor?

John Silbermann: No I can't go along with that because I can't make a distinction in my mind between a sub-contracting haulier and a main haulier. We are all in turn sub-contractors for other hauliers.

I can't see any purpose in picking out one group of operators and calling them subcontractors. If we mean by that register owner-drivers, I can't go along with that because ownerdrivers cover a multitude of activities from the fellow who genuinely owns and drives his own vehicles for one customer, to the fellow who's tramping all over Europe, to a chap who's really a lorry driver who's trying to buy his lorry on hire purchase. There are all kinds of owner-drivers.

Somewhow or other in recent times, the RHA hasn't been seen to be the voice of the owner-driver as much as it really is, and perhaps there's room within its hierarchy to set up a special meeting forum for owner-drivers to discuss and educate each other on these very points.

We have mentioned the ETA today as being the other organisation and, of course, they represent in the main, our cus tomers and the customers operate vehicles. I'd like to pi tribute to them on one score understanding costs. That fairly new and a change of he on their part, but thanks to RIpressure I think I claim that th have seen fit on two occasio this year to publish in print complete recognition and yin,

cation of all we've been sayini

They are saying it to thi members who hire people Ii us, and to their memb operators, from the one-vehii greengrocer to the ICI Unilever-type member. They E saying to all of them "Do yc own costings where you r your own vehicles a remember you have to replE them, you have to cover all th have to replace them, you hE to cover all their costs and y mustn't run them on t cheap."

They're also saying to th members "Be fair to the hauli you hire to make sure they the right price from you so t they shall continue in bt ness."

Peter Land: You are sim saying that the ETA recc mends that current replacem prices should be used rat than historical vehicle costs, fixing the charges.

Gerry Stacey: A point I'd lik make about legislation, mud I hate legislation, is that in sc European countries a corn ny's books can be examinec the Licensing Authority to m sure they are charging the ri that are financially sound.

Mike Wells: Other than le lation there is no way to cor rates. At the moment in Bri it's on trust and trust is a th that's sadly lacking today. 1.1 do we not operate some forr conference agreement operated in the shipping dustry?

Peter Land: That's an int( ting point Mike and it brine to the question of selling p Knowing the costs in the I ness is one thing, but I ha view that it's the setting 01 selling price that's importan I said a little earlier we are working generally in a cost business. We are operating market place where ther more capacity than there is \ and the position will not better. The setting of the se price is a rather delicate thir these circumstances. I thinl first thing one ought t( saying is: What is cost?

dlike Wells: I think CM Tables ,f Operating Costs are somehing which everyone can base heir rates on.

ierry Stacey: Anybody who links they are going to get :71/7's rates are living in a world f their own, but I accept they re a basis. My charge for a 0-tonner whether it be traction nly or with a trailer is £65 a day nd 14p a mile. That's for a 0-hour day or 281 miles. The 4p a mile is over 50 miles. My rice on 100 miles is £79 per ay.

'eter Land: When you are forlulating the selling price there re four elements to consider. here's the amount of cost that vary by use, fuel, tyres etc. here's the amount of cost that ill vary by time, licence, insurice, etc, and there is the cost the capital or the cost of proding the resources.

Finally there's a thing called ,e profit. If we are saying that :tes can't be obtained that )ver these elements then what e are really saying is that one those constituent parts is not ing properly provided for, in e selling price.

Silbermann: Haulage ists are almost identical for all us. The overhead element in tulage is now a minority cost. ) illustrate the point, if you ke the total cost of operating a ihicle, overheads would be mething under 20 per cent or i per cent.

The problems that face our dustry aren't in the 15 per nt range, they are much bigr. We've dismissed too lightly e cowboy operators. I am nvinced the trouble is caused • them not knowing their sts, because they can't be thered to sit down and work t their licence, depreciation, ;urance, repairs, fuel, tyre and iges and allied costs.

I add up the sum and divide ton, by mileage or time. I add that, overheads based on exrience. Once you've done the n the only thing that remains question is what profit you nt out of the business? There ave a pretty fixed view based, elieve, on logic.

I mentioned earlier National vings certificates. For Imple, if we spend £100 on • tificates, I think we will get nething like 5 or 6 per cent free at the end of the year in urn for doing nothing. yone can invest in a building :iety or other obviously safe titutions. We can play shares the Mock exchange and make anything from 5 — 10 per cent after tax depending on the investment. You can get a little more risky and invest in slightly less well established companies on the stock exchange and collect 10 — 15 per cent.

• If one can't make that kind of return by running haulage for oneself then one is foolish. Because if one can make it by buying savings certificates or sticking the money in a building society or buying shares, why bother with drivers and breakdowns or customers (who may not pay their bills) and goodsin-transit and thefts and all the other mess that we call haulage why bother unless it pays at least upwards of 15 per cent?

Any 32-tonner must cost £20,000 or more so £20,000 at 15 per cent making £3,000 a year is an absolute minimum after paying the wages of the driver and paying towards my wages as a working director. I must make a minimum of £3,000 clear to justify buying the lorry. I do know hauliers who say they wouldn't run a lorry for £3,000 a year. Yet there are lots and lots would like to make that kind of money from each lorry. Peter Land: Generally I agree with John but I must challenge the little bit on the very end. It is a fact that the costs of operation vary. If we hear of a man who is charging less than us, and we don't know him or don't like him we say he's cutting corners. If he's a chum we'll say he's a good manager.

The effect on selling price of operational and management differences is small compared with the effect of the cost of providing the resources. John included in his case the need for a return on the investment. I wonder what view he would have if the man had no money invested in the business, say he went to the bank and borrowed £20,000 to acquire a lorry or he contract hired the lorry.

The total cost against which an operator considers his selling price can very enormously in total and at different phases of vehicle life, according to the way the vehicles are financed. Transport has been an industry that has operated on the basis of ownership, but there have been a lot of changes over the past three or four years and an operator cannot be criticised for setting a low selling price if in so doing he is reflecting his skill in the way he finances his resources.

Summing up today's discussion, the thing that has come out so very very strongly has been the need to know what costs are. Secondly we all seem to be saying for goodness sake let us help each other to be better professionals. Geoff and Mike want initiative to be taken by the sub-contractors to ensure they work for a proper return reflecting their costs and that we should help them to be good operators. The discussion seems to indicate that we have a very good base industry, but associated with it is an everchanging supply of what we might call transport itinerants, who are in today and out tomorrow.

Some of these people, not all that many, seem to establish themselves. There are people who we think are perhaps thriving on these itinerants. If they are they are, then in the long term they are destroying themselves because they are the people who are making transport a cheap product. If you take a business at an uneconomic 'rate, look for a sub-contr and make him suppress his you'll be guilty of making t port a cheap product and i end we all suffer from Would you all like to have a word beginning with you D Dick Grace: I think the issue comes back to trust. trust has got to be base knowledge and experien both the business and pe There was a time when I able each year to base my on last year's profit and account. I haven't got the or the time to do it now. guess at it. Although there number of known factors licences and insurance.

It is essential, howeve have an exercise at some compiling a rate just to see is going on. I know what's g on now through experience Geoff Fry: Very obvious' overheads are not to be pared with those of a la operator. Why then shou charge the same rate? This i undercutting for its own s but merely to give me a return for my effort and if I d get that I don't go out but the time to get on with paperwork.

Gerry Stacey: For most of suppose, transport is no much a business as a way o but it is a way of life which got to pay.

John Silbermann: It's a m of educating everybody to on a proper price for a job refuse to take any less. Until all do it from the humbl owner-driver to the largest poration we won't solve problems. And the educa must be on both our side an the customer side from the g multi-national organisation the small shopkeeper.

i would plead with owner-drivers to join the R and make their voices heard.

Mike Wells: I think I agree what everyone else has said the several points raised I Iieve sub-contracting rates to the nub. Something has to done about this in respect owner-drivers. The formatio haulage-co-operatives need be encouraged. I think so form of conference agreem could be put into operation.

Peter Land: I think, gentlem the discussion has been fruit much has been said, much m remains to be said and perh CM will give us the opportu to follow it through at a la date.