A national strategy for tipper rates?
Page 73
Page 74
If you've noticed an error in this article please click here to report it so we can fix it.
PERHAPS because of the nature of their job tipper operators seem to be more articulate—they are certainly more vociferous— than any other section of the road haulage industry. The punishing nature of the work on vehicles not always sufficiently robust for the loads and buffeting imposed upon them, and the opportunity—sometimes for days at a time in bad weather—to chew over the problems of the industry, helps to develop a consensus. It is most apparent with the established operators of small fleets. The newcomers, and the fly-by-night pirate operators, are less conscious of the need for a common approach to the industry's problems.
It is by no means certain that tipping operators in general are afflicted by more difficult circumstances than other minority groups in road transport. One sometimes hears of rate structures virtually imposed on small general hauliers by large industrial concerns. There is also reason to believe that some major road transport users, carrying a proportion of their own goods, make a useful profit from the margin allowed for sub-contracting work.
Sizeable element
Nevertheless, tipper operators are a sizeable element in the industry. If they sometimes closely resemble the militant trade unions in their approach to life this must be accepted for as long as the tipping tildes remain fragmented. Indeed, it is arguable that a militant approach will be called for if the tipping industry is organized professionally in very large units: In the London area, as many CM readers will know, serious allegations have been made by such representative bodies as SABATA (Sand, Ballast and Allied Trades) that enforcement action against unlicensed tipper operators is quite out of scale with the needs of the situation. If road safety legislation can be mocked with impunity by irresponsible operators; if, moreover, such conduct is seen to be highly profitable, respect for law disappears. In no sector of road haulage are more fears expressed about enforcement. Is this, perhaps, one field where a few hundred more civil servants would not be aturden?
In a recent discussion with Mr. Joe Cox, the RHA area secretary at Bristol, I was frankly staggered to learn of the disproportionate amount of attention he has had to devote to the organization of tipper group activities and, particularly, the achievement of acceptable rate structures. The number and thickness of files maintained by Mr. Cox and his staff bear witness to the extraordinary persistence he has shown in negotiations with quarry owning companies or associations. He readily admits that but for some helpful decisions by the Western Licensing Authority, Mr. J. R. C. Samuel-Gibbon, the task would have been even more daunting.
The negotiation of realistic tipper rates would be relatively simple if one national body could speak, as to haulage rates, for all quarries. It would then be possible at an annual meeting with the RHA to fix minimum basic rate scales with an adjustment clause to take account of cost variations arising from Budget proposals. The machinery could be likened to the annual price-fixing review by the Minister of Agriculture after discussions with the National Farmers' Union.
In present circumstances a national tipper rate-fixing body seems Utopian. In many areas of the country quarry ownership is diffused. Within areas. quarries under different ownership compete for roadstone and other contracts not only with each other but with quarries elsewhere in the country. The delivered price of the road material is crucial to the deal so far as the quarries are concerned. Small wonder that where competition is most fierce there are so many rate anomalies. Local hauliers and their spokesmen are told in so many words that rates for some products for delivery within specified mileage bands or destinations cannot in any circumstances be increased.
In the Western area the tough and determined methods of Mr. Cox and his tipper groups have pushed up rates some 10l2 per cent higher than comparable rates paid to Midland quarry hauliers. Unless quarry rates in other areas move up appreciably, quickly, any further increases in the West must widen the gap. (Mr. Cox is certainly not minded to rest on his laurels. The Forest of Dean quarries offered a rate increase of 41 per cent—to be effective from April 1 1969—if the rate could be held until October 1. Because of the risk of a Budget increase the offer was not accepted initially.) This marked disparity in tipper rates has not gone unnoticed by quarry manage
ments. Within the RHA organization there is much interchange of information about tipper rates. Individual operators as well as area secretaries exchange information. The successful conclusion of an improved rate schedule for work from a major quarry group is followed by the dissemination of the details to other areas. Personal meetings between area delegates on rates matters are not infrequent.
Well informed Despite the lack of any effective centralized co-ordinating body it is not surprising that quarry managements in various parts of the country are well informed about rate trends. Mr. Cox has been told during rate negotiations with Western quarry managers that the wide disparities in rates between areas must be levelled off before any further increases can be considered. That the road haulage industry should he asked to exert influence to straighten out a chaotic rate situation is ironic; the quarry industry should surely put its own house in order.
What annoys Mr. Cox, understandably, is to learn during rate negotiations in the West that tipper operators in some other areas have made no applications for higher
rates despite the many cost increases imposed on the industry.
No one could blame quarries for reluctance to raise rate levels if their hauliers are able, in effect, to subsidize poorly rated outgoing loads with lucrative return traffic. What is needed is detailed information on traffic flows and revenue yields. What return traffic is available? What are the collecting and discharging circumstances? What additional empty mileage is involved in backloading? What effect does it have on the number of vehicles required to serve the outgoing quarry loads?
Writing before the Buxton Tipper Convention I am unaware of the content of the report on rates to be presented there. I understand that the North West Tipper Liaison Committee has undertaken a costing exercise, utilizing weekly costing records submitted by selected operators. No doubt other area tipping group officers will reveal a good deal about their own members' operating costs. One must hope that the rate levels for quarry products for given distances are compared fully and that the back-loading revenues available in each area are fully disclosed.
The ideas of Mr. John Galbraith (See "Tipping Together", CM April 4) for telex connected tipper groups providing a traffic exchange system allowing interchange of return loads deserve to be supported. Although there is the risk that a well-organized system for return loading would blunt the edge of the attack on low quarry rates, it is a risk worth taking. The large fleet tipper operators with many vehicles on long-distance work are often able to arrange reciprocal loads: If they were not able to do so their higher overheads would surely price them out of the market, vis-ci-vis the small operators.
Other developments
If a viable national traffic exchange system was set up to deal exclusively with tipping vehicles it is not hard to see other co-operative developments. The practice whereby the accounts departments of quarrying firms undertake virtually all of the office rating and checking work for the hauliers is calculated to tie haulier to quarry in a rather too intimate embrace. If all quarry haulage invoices were processed regionally or centrally by an organization representative of, and, in effect, owned by, the tipping hauliers, the variations in rates across the whole field would stand out clearly. A black list of quarries whose managements are unable or unwilling to meet the minimum acceptable rate levels of the tipping industry would provide much food for thought. Would the reluctance of the organized tipper groups to work at submarginal rates put such quarries out of business? Would the quarries concerned find it profitable to undertake all their own delivery operations? Would a queue of credulous one-man operators fill the void?
Thoughts of this kind are inevitable in an industry where tpo high a proportion of traffic moves at uneconomic rates. It is important that some clear guidance should be forthcoming as to the validity of some of the "defence mechanisms" erected by the quarry owners in efforts to rebut the claims of tipping hauliers for higher rates. The Restrictive Trade Practices Act is often mentioned: does it or does it not apply to the type of services rendered by the haulage industry?
The legal /commercial climate is changing rapidly and public opinion—the ultimate arbiter—has not yet settled on a firm policy line. The Transport Act itself is calculated to make many sections of road transport much more competitive. The recent proposals of the Monopolies Commission for the much greater diversification of beer outlets shows the way the wind is blowing_ If the proposals are endorsed by the Government the decision is likely to bolster the case of those who favour unfettered competition as the only arbiter of road transport rates. But if combination—in tipper groups or whatever—is disallowed, what of combinations of workers in trade unions? Has not a section of employers the same kind of right to combine for the purpose of negotiating with customer groups? And if local tipper groups, as the success of Mr. Joe Cox and his members in the Western region proves, can substantially improve rates, would not a powerful consortium of tipper groups negotiating nationally on minimum rates with the companion body (as yet non-existent!) of quarry owners and roadstone processors, be equally successful?
It has been pointed out to me by a close student of road transport rate problems that the "market" for transport rates would be much less interesting if the type of nationally agreed minima proposed was general. At present the trading community can shop around and obtain highly advantageous bargain rates with little difficulty. The fact that such a state of affairs is possible is due to the profound ignorance of the importance of accgrate costing existing in the tipper industry. As tipper operators progressively become more sophisticated in their approach to costing matters what will become of the "free competition and no holds barred" school of thought?
Reflecting an the bulging tipper group files of Mr. Cox, largely filled with ratesnegotiating matters, I find it hard to question that without his efforts tipper rates in the West could be 10 per cent or more below present levels. It is a haunting thought, none the less, that in the labour market more than 60 per cent of people are not organized in trade unions—and wage and salary levels for non-trade unionists are not noticeably lower than those of the "organized" brethren. The pressure for higher pay for nationalized industry chief executives stems not from the agitation of a small, powerful trade union but from market forces.
Action necessary?
In the light of this, is any action necessary in the tipper trades? In the fairly short run would tipper rates rise in the absence of any agitation by the RHA or any other body? Have the RHA area secretaries most concerned with tipper operating problems been wasting their time in the past five years?
In my view they have not. I believe the facts suggest that too much burden has been placed on local officers. The RHA, nationally, has not given the problem the attention it deserves. There is a special need for reliable national statistics showing numbers of vehicles engaged in the industry, tonnages carried, problems with particular commodities, collection and site delivery problems, over-loading aspects, suitability of vehicles, the proportion of traffic now moved by tipper groups, progress with traffic exchange and communication systems, documentation problems, revenue from backloading, seasonal trading patterns, relations with county councils and Ministeries, the general licensing problems of the industry, labour relations matters, etc.
Perhaps if the RHA nationally gears itself for this highly necessary job area secretaries like Mr_ Joe Cox will not need to spend themselves in the service of their tipper members, possibly to the detriment of other members of the association.