Commercial Aspects
Page 63
Page 64
If you've noticed an error in this article please click here to report it so we can fix it.
of Transport LAST week I emphasized the importance of selling a transport service as distinct from operating one. Whilst many of the inquiries received from prospective operators indicate some experience of driving or technical knowledge of road vehicles, there is seldom any reference to a recognition Of the importance of the commercial aspects of running a haulage business or operating passenger vehicles.
When the failure of a transport operator is reported, the salient features in the majority of cases are either a general reduction in traffic carried or the complete loss of important customers' traffic. The reverse set of circumstances rarely applies, namely, an adequate offer of traffic but inability to supply either vehicles or drivers through inadequate organization.
There are undoubted difficulties confronting the owner-driver or small operator in giving adequate time to sales and commercial aspects of transport operation due to their full employment in the day-to-day running of vehicles. But the effort has nevertheless got to be made if the imprudent reliance on existing traffics is to be avoided.
For the small operator, at least, the personal call on customers or prospective customers will be his principal means of publicizing the service he has to offer. Compared with other trades or industries, however, it would be foolish to exaggerate the merits of any service which was being offered because, unlike a commodity, the standards of any transport service can readily be measured against the clock or, alternatively, the condition of goods on arrival. With an increasing proportion of intake and output of trade and industry being geared to mass-production flow, the reliability of hauliers' services and fulfilment of any promises made must obviously be of vital concern to successful operation.
HAULIERS concerned in the collection and delivery of " smalls" or parcels are in a different position as regards publicity, compared with the general haulier, because many of their dealings are directly with members of the public, rather than with trade and industry. Moreover, their area of operation is often more localized and, as a result, an advertisement in the local evening or weekly Press would provide, a good medium.
Because industrial transport managers are invariably busy men, it is of the utmost importance that when a haulier canvasses a new customer for business he should have done everything possible to acquaint himself beforehand as to the peculiarities of that particular trade and the traffic he hopes to carry. This would include a fore-knowledge of the routes on which such traffic would be likely to move, so that the haulier would be in a position to make a firm and specific offer as to the service he could provide if traffic were offered.
One of the major assets of well-organized road transport operators is the ability to make decisions on the spot as to whether a specified collection and delivery time can be met, and this is an asset which should be exploited to the full. But as much fore-knowledge as possible is essential if the right decisions are to be made.
In this context it is significant that one of the hauliers' main competitors, British Railways, has over the years, made exhaustive surveys of the traffic potentialities of all the major industries of the country, and a further survey has been made relative to the progress of the railway modernization plan.
Whilst it would be beyond the resources of practically every road transport operator to make such an exhaustive survey, there is an undoubted need for him to obtain as much information as he can on matters which have a bearing on the future of the industries he serves. And, although such a survey may be on a more modest scale, he will have the very real advantage. of being able to take more immediate and positive action, where this is called for, than his larger competitors.
HEN negotiating with new customers, rates and timings will naturally be of vital concern to both parties, but the operator should not lose the opportunity to stress some of the advantages of road transport which, because of their familiarity, may tend to be taken for granted. An example is the condition of goods on delivery and the rare occasion on which a claim for damage or loss by this form of transport is sustained. As a corollary, both mistomer and operator can easily overlook, by the very repitition, the lack of need for expensive packing, which in some instances could exceed the cost of the actual freight charge. This is an advantage which must obviously be stressed repeatedly by road transport operators.
Supplementing the canvassing, of a particular traffic, operators will find that a valuable form of publicity, although less direct, would result from membership of associations, such as the local Chamber of Commerce and social clubs. Although many large operators are represented on such bodies along with their rail competitors, this opportunity of publicity is not used as frequently as it might be by medium-sized hauliers. Often in such circumstances valuable prior knowledge of local development and trends can be obtained which can be of real value to operators, even though immediate booking of traffic may not be involved. In previous articles in this series the danger of a lack of control arising as the size of fleet increases has been stressed. Especially is this likely where a small operator has been able to rely on memory alone to locate any of his vehicles as and when required. Beyond a certain size of fleet, dependent to some extent on the type of work in which they are involved, this becomes no longer possible and measures must be taken by installing an adequate recording system for the location of the fleet if the previously efficient and successful operation is to continue;
ASIMILAR situation could arise on the traffic side of the business if, as trade increases, no proper record is kept of customers and their particular requirements. When that stage arises it would be advisable to institute a card index record of all customers, or prospective customers, on whom periodic calls are made. On such cards, in addition to the name and address of the company. and branches if these exist, in these days of widespread amalgamations it would also be useful to indicate any association with other undertakings.
The names of the members of the staff with whom interviews are made or, alternatively, when traffic is carried, the staff of the dispatch department, should also be recorded. This is particularly important if an urgent telephone call has to be made about some relatively minor point which could be dealt with in a few minutes, providing the right person is located.
lf required, this index could also contain details as to whether or not the customer concerned operates his own transport and the occasions, or possibly seasons, when he is most likely to require additional hired transport. An assessment of the total potential traffic per annum and the proportion already carried could also be given.
A summary of such information from all the index cards would provide some indication of likely trends in traffic movement as a whole should the operator have occasion to consider, for example, the purchase of an existing operator in another area or, alternatively, the siting of a new depot.
An aspect of canvassing for new traffic which is likely to increase and, at the same time, present problems for hauliers not used to handling the particular traffic, is a request for the supply of specialized vehicles to deliver in bulk.
There are undoubtedly economies to be achieved by the use of this type of vehicle in the right circumstances. But in the majority of cases the haulier would be well advised to consider all the factors involved before offering to provide such a service.
Usually, the initial request will come from the customer, so implying that his own process of manufacture is already geared to movement in bulk at least in some stages, including delivery to the dispatch point. If the product could continue in this form the customer would obviously save not only the cost of whatever type of traditional container was formerly used—say, carton, box or sack—but also the cost of labour. Although non-productive, this could be substantial.
But such economies for the customer do not necessarily imply or guarantee a saving for the road transport operator if he were to provide the link—in bulk—between the manufacturer and his customer. At the outset he would be faced with the purchase of a specially designed vehicle which would inevitably be substantially more expensive than a standard version, particularly in these days of mass-production, and might even double the normal cost.
THE only way to recoup this substantial increase in initial outlay would be by a correspondingly substantial increase in revenue. In practice, this would be unlikely to be achieved unless the trip mileage was so small, and the saving in terminal times so great, as to permit an increase of possibly SO per cent or more in the tonnage carried during corresponding periods.
It is significant in this context that the tipper, although now so common that it is scarcely looked upon as a bulk-delivery vehicle, has been in many instances provided on the haulier's own initiative. This is because in several types of work in which the tippet is normally employed, for example sand and gravel, the mileage per trip is, in fact, so small as to permit exploiting the advantage of tipping to the maximum.
B46
Similarly, if in other fl Ids of bulk delivery the road transport operator could see the possibility of savings to be made he would undoubtedly agai provide the appropriate vehicle on his own initiative.
It follows that in th majority of cases when a customer makes the initial request for the provision of some type of bulk-delivery vehicle th4t the haulier's own cost of operation will be increased. It is therefore an advantage, as with the securing of general traffic for standard vehicles, to obtain as much fore-knowledge as to the peculiarities of the bulk delivery
in which he is to becom involved.
The spasmodic use f a standard type of vehicle Must obviously increase the operating cost, and this increase must be all the greater when expensive special-type vehicles are involved. Although regular employment may be obtained for some traffic carried in bulk, others could be seasonal, such as agricultural commodities. But by the very fact that the vehicle is of special type would, in the great majority of cases. debar it from use on other work. In such circumstances, therefore, coupled to the high initial cost would be a reduced usage, compared with a standard vehicle over a given period.
IN an attempt to alleviate this situation several dualor multi-purpose vehicles have been designed and manufactured.. But although going some way to permit increased usage, their construction must inevitably not only increase the cost and incidentally, prohibit anything approaching quantity production with the ultimate objective of reduced price, but additionally the unladen weight will generally be higher. This, in turn, must increase the annual licence duty and, at the same time, reduce the amount of payload the vehicle can carry because of legal limitations on the gross laden weight.
Another factor which the operator should try to ascertain before negotiating a rate for delivery in bulk is the actual working conditions at the terminal point. In theory such points may be arranged to receive whatever is the load of the vehicle immediately the vehicle discharges, so that virtually no waiting is involved during that actual process.
It should not be overlooked, however, that the actual unloading, even by the existing slow, manual methods, may represent a relatively small proportion of the total terminal time. This will include the locating of the actual department to which the load is to be delivered if a new customer is involved, waiting in the queue of lorries at possibly a busy factory, and attending to whatever documentation is required.
Moreover, if the initial load which was dropped in bulk into whatever hopper or tank was provided was not removed rapidly, the second and subsequent vehicles would have to wait for this to he done, so negativing the benefits of bulk discharge. All such factors which could have a very real effect on subsequent economic operation could only be ascertained by prudent inquiries beforehand, which implies the provision of adequate time to be devoted to the commercial aspects of road transport operation. S.B.