Managing a Transport Business

Business Management in Transport 2

W.S. Barry

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351812061
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book, first published in 1963, uses the framework of the author's Fundamentals of Management for studying the management of transport undertakings.

Part I
The External Relations of Management

Chapter I
Relations with Passengers, Shippers and Charterers

There are three main sorts of customers in the transport industry. First there are passengers, and with them their belongings. Very few human beings travel any distance without a bundle of possessions. Secondly, there are shippers, who, as principals or agents, send goods from one place to another, usually to change their ownership. Thirdly, there are charterers who seek to gain by hiring a vehicle. Dealings with these three sorts of customers are sufficiently different to make it worthwhile considering them separately.

It is often said that the industry sells a service to its customers. This statement distinguishes the transport industry from those selling goods, and helps to remind us that its products are not tangible. But we will find widespread disagreement on what exactly the service is. To discover the truth we need to look at the customers’ wants and not at the industry itself. The array of services can confuse. What is the passenger buying? Is it cleanliness at the terminal, civility at the check-in point, careful loading, a comfortable seat, a hot drink or time-saving?

In fact there are many services involved, but they are not equally important. Some are vital, and others incidental. We have to sort out priorities, so it is not very helpful to lump together all the various services and refer to a service.

The essence of demand for transport is that people want themselves and their goods to arrive elsewhere. Arriving is the main object. A customer may be willing to forgo a particular convenience, but not to forgo arrival at the right destination. Most ‘arriving’ is wanted at a certain time, or within certain limits of time.

Sometimes passengers take trips primarily for the pleasure of travelling. But these journeys we distinguish by calling them ‘pleasure cruises’ or ‘excursions’ or ‘tours’. Here arrival is not the main reason for the journey. The journey is an end in itself.

Passengers

Generally passengers’ journeys are inconveniences, not things to be enjoyed for their own sake. Passengers tend to regard their position as temporarily worsened. They are not as comfortable, free, or as well-fed as they would have been at home. Their movements are restricted in a vehicle that probably provides few amenities. They have to leave most of their personal belongings behind. They may believe their lives are in some danger. They may spend most of their journey passing through, over, or by, places they have no wish to be in. To them the journey may be regarded as an unwelcome by-product of the process of giving them what they really want—arrival at their chosen destination on time!

The unwelcome by-product from the point of view of passengers is the essential production process for the transport company. The only way to give the passengers the product of arrival is to go through the production process of carriage. It is possible to produce goods without getting customers mixed up with processes of production. Production can be in out-of-the-way places, immunised from customer interference. Not so with passenger transport. Passengers are amongst the moving wheels and the to-ing and fro-ing of men, equipment and materials. Management has customers right inside organisation. Organisation that should be purely instrumental to the purpose of securing passengers’ arrivals, is complicated by having to entertain reluctant guests.

This is the nub of the problem of management-passenger relations in the transport industry. Both management and passengers have primary intentions that cannot be achieved without engaging in activities that give rise to secondary intentions. Besides trying to be efficient in production processes management must turn thoughts to making journeys as pleasant as possible. And passengers, besides seeking convenient arrivals, seek to obtain incidental satisfactions from their journeys.

The primary intention of securing passengers’ arrivals at correct destinations on time, and the secondary intention of making the journeys as acceptable as possible to passengers, are sometimes difficult to reconcile.

Management must make rules and regulations to govern the conduct of passengers. Management must ensure that passengers do not injure themselves or other people, or damage equipment. To enforce rules and regulations management representatives in vehicles must have some authority over passengers, and this is indicated by titles like, captain, guard, conductor, and so on.

These management representatives regard passengers as similar units. All appear equal in their needs and in the processes applied to them. The primary intention of the business makes the management representative preoccupied with safety, punctuality, reporting and other operational procedures. But journey-time is also living time; a passenger cannot be kept in a state of suspended animation. So the management representative must take time off occasionally to attend to personal problems that affect only one passenger in contrast to those that affect all passengers equally. Captain, guard or conductor must be prepared to deal with human emergencies that crop up in the process of living through journey-time; remembering, forgetting, becoming sick, thirsty, hungry, and so on.

This need for transport management to combine, with a primary concern for the technical processes of carriage, a secondary concern for the everyday needs and troubles of people, does not make the relations between a manager in a transport company and his passengers similar to those between, say, a bank manager and his customer. Only exceptionally does a manager in transport need to know anything about the individual circumstances of his passengers. Although he must be prepared to deal with human needs he is not very often concerned with individual needs. He is not like the bank manager who has to treat every client as a being apart and as a man who has a problem in some way different from that of any other man.

Managers in transport cannot, in their relations with passengers, take the attitude that passengers clearly get what they pay for. There are good reasons for passengers’ doubts. They cannot, like buyers of steel, lay down an exact specification of the product. The secondary intention gets in the way again. Passengers can specify their primary intention but not their secondary intention. They can state precisely where they want to arrive and the time at which they want to arrive, but they cannot be precise about what they expect as minimum conditions en route. This provides ample room for doubts.

The manager of a retail store can drop everything, walk out of his office and into the area where dealings are taking place between his subordinates and his customers. Transport management is not so well placed to keep dealings between operatives and customers under constant surveillance, nor has it so much freedom of choice of time for check visits. This is a reason for the development of inspection branches in transport. The inspector’s visit is an organisational device, to replace the stroll that the retail manager takes, into his store, to see how things are going.

In the production process of many businesses, external appearances of equipment, and the interior of buildings that house it, are kept to the most economical standard. This standard may well allow for bright, cheerful colours and clean smooth surfaces in the interest of mental and physical hygiene. But the standard is utilitarian. It is not meant to impress. Managers in transport have to modify the usual businesslike attitude because appearances become means of competition for passengers. Organisational elements that should exactly fit the production process must, to some extent, reflect the concern of management for the amount of pleasure that passengers get out of their journeys. Production equipment becomes part of the passenger environment and so must fill a dual role. There is need for window-dressing, and even optical illusions, to allay fears. Production problems must be masked to avoid causing passengers to worry.

And now we must consider the effect of manager-passenger relations on the behaviour of operatives. Sometimes passengers use a manager’s name in order to secure some advantage. Operatives should be instructed to ignore such an attempt to deflect them from the normal course of their duties. The cliché that ‘the customer is always right’ has had unfortunate consequences in other industries, but transport is protected to some extent by standards of safety, and punctuality that must withstand the whims of individual passengers. Any manager who allows, for example, safety regulations to be watered down, on the principle that the customer is always right, cannot tell where it will lead him. On the other hand in transport there is the opposite danger of over-protecting the employee. If it is found that an employee has broken some operational regulation, it is dangerous to shield him from blame. This might well blunt the keen edge of meticulous attention to detail. Because transport operatives work so much without supervision, management must use passengers as a check on operations. The use must be guarded because passengers are to some extent like other sorts of customers in that they are out to get the best of a bargain, and allow the emotion of the ‘market place’ to colour their judgements. Also if passengers are regarded as a legitimate source of condemnation of employees they must also be regarded as a proper source of commendation.

A difficulty arises because a passenger cannot usually register a complaint as soon as he feels aggrieved. In businesses where the customer can say: ‘Fetch me the manager!’ complaints can be dealt with swiftly, witnesses examined, and so on, and all in the presence of the employee, who has the opportunity to refute statements and challenge evidence. In transport, by the time the passenger’s complaint arrives on the manager’s desk, the former may be many miles away, and seldom is it possible to conduct an enquiry in the presence of both passenger and employee. Usually the matter has to be settled by post or telephone, and this is not always satisfactory for the employee. To be scrupulously fair to the employee nothing should be hidden from him. He should be shown original letters—not just copies or extracts. If the employee knows the whole story, he can reply fully to any innuendos that may accompany the main complaint.

If a manager is not recognised he may, when travelling, receive the same service as other passengers. But unfortunately he can seldom, without a conscious effort, see things from the passenger’s point of view. He knows the production process, and is likely to be preoccupied with what is right and what is wrong from the point of view of that process, and so add nothing to his knowledge of the passenger’s view of the product. What he wants to add to the basic views he already shares with passengers, is knowledge of the marginal niceties that are important in competition.

Managers can demonstrate an attitude of attentiveness to passengers and their problems whenever they are with them. If a manager steps on to the deck or the platform, or into the waiting-room, and appears not to notice passengers because he is concerned with buildings or machinery, his subordinates may not deliberately follow his example; but they may later tend to justify their own preoccupation with process and equipment by the managerial example. A manager should not play-act in his dealings with passengers. If he goes to extremes, and spends too much effort on a single passenger, his example is impossible to follow. He may be considered irresponsible in using a privileged position to allow himself to be unbusinesslike. The manager must convince his subordinates that his interest in passengers is sincere.

Passengers and the general public usually regard transport undertakings as monopolistic. Because a bus is the only form of public transport that runs past Mrs Smith’s front door, even though there is a railway station a hundred yards down the road, Mrs Smith is quite likely to argue that the trouble with the bus company is that it has no ‘competition’. If Mrs Smith meets with the slightest show of indifference, she will accuse the bus company of a take-it-or-leave-it attitude, that they adopt because they ‘know’ she has no alternative to using their buses.

There are good reasons for having a special manager to deal with certain aspects of customer relations in transport. But such an appointment is likely to provoke criticism. Passengers are the business of everybody engaged in passenger transport. For one man to call himself Passenger Relations Manager does not seem to make sense, particularly to the sales branch of a transport organisation. Salesmen argue that their job is getting and keeping passengers so what need is there for anyone calling himself a Passenger Relations Manager?

Special passenger-relations managers, however, do a valuable job in handling the special difficulties with passengers, revealed by their complaints. It is advisable to have complaints handled centrally, and with expertise. The geographical spread of terminals, constantly moving equipment, and central planning, make it difficult to trace the origins of mistakes. If the investigation of complaints is left to those who receive them, enquiries will circulate in the organisational network, and cause confusion.

Consumers’ Councils have their place in the industry. The vigour of some is encouraged by the fact that it is possible to secure local advantage, at the expense of the whole community. If the price of transport is not closely tied to costs on particular routes, out-of-the-way communities can obtain a substantial subsidy, by getting transport at standard rates. Behind every transport consumers’ council are ranged the economic interests of hoteliers, shopkeepers, industrialists and so on.

It does not matter how careful a transport undertaking is, in the treatment of the person of passengers, the effort will be of little avail if it damages or loses passengers’ belongings. Most people take it as a personal slight if something goes wrong in the handling of their belongings. Their feelings are outraged, but the representative of the transport company is never as worried and otherwise upset as the passenger. He cannot be. To him it is a case of a lost or damaged bag. To the customer it may mean an uncomfortable stay in a hotel, living in the clothes he stands up in, or it may mean the loss of something of sentimental value. The transport official’s lack of obvious distress can easily be taken as representing complete indifference.

To be sure of good relations with passengers, management must pay attention to that part of organisation devoted to handling passengers’ baggage, to prevent accidents occurring rather than to repair damage when it is done.

Shippers

The most common cause of bad relations, between management and shippers, is the failure to understand the point of view of the shipper. When a shipper entrusts goods to a transport company the matter does not begin and end with carriage. The essence of the undertaking from the shipper’s point of view is the successful transfer of possession. This is what he is really aiming at, and carriage is a means to an end. He is not really buying carriage (in the same way that passengers do not buy carriage); he is buying transfer of possession of goods (compared with passengers buying ‘arrival’). So documentation is as important as careful handling. Bound up with carriage of goods are shippers’ contractual obligations, reputation and prosperity.

Unless management in transport takes this view of the position of shippers, it is unlikely to gear its organisation to their needs. A sign of something being amiss is where the goods, or freight side of the business is regarded as something of a Cinderella, attracting a lower grade of staff.

Charterers

The relationships of shipper and charterer to transport management are different from the passenger-management relationship in one important respect. Usually shippers and charterers regard their dealings with a transport company as being ‘in the course of business’. Passenger traffic on the other hand is largely in the course of domestic and pleasure pursuits. Thus the relationship between management and shippers or charterers is generally much more ‘businesslike’ than the relationship between management and passengers. There is room for the usually friendly commercial relations between management and charterer, but a good contract should be regarded as the soundest basis for their business association.

Chapter II
Relations with the State

The Railway Age in England began in the 1830’s and lasted until the 1860’s. It is so-called because during this time a national network was made for the whole island, from a few local lines in coal districts. These were the years of laissez-faire. The railways grew up in an age that believed in letting business get on with its job, without interference from the State. The results are pointers to what can happen, if the State does little to restrict competition among transport companies.

Firstly, England was provided with a railway network in an astonishingly few years. Between 1840 and 1855 over 6,000 miles of railways were built. The spirit of intense rivalry ‘to get there first’ ensured that no time was lost in wordy debate or leisurely construction. The constructors learnt their lessons with remarkable speed and acquired a technical knowledge that became a gift to the rest of the world. The speed and extent of development well provided for the needs of the age. Industry was expanding rapidly and was thirsting for more and better transport. Canal transport was too slow for many new industries and road transport offered no quicker alternative. The motor car had not yet arrived, and there was very little on the horizon to warn of the approach of a vast network of roads, and fast, compact vehicles to use them.

Over some distances the tracks of competing companies ran almost parallel and a comparatively short distance apart. This resulted in some tariff-cutting that benefited the consumer. But in many cases, shortly after a rival disappeared from the scene, fares were raised to an ‘economic’ or ‘realistic’ level. On balance the public lost more from land eaten up by duplicate tracks, than passengers gained from cheaper fares.

The general fevered atmosphere of early development became the ‘railway mania’ of the ‘forties. People plunged into speculative deals, and lost money. Some undertakings might have prospered but for fierce, wasteful competition. The luxuriant growth, and resulting over-providing, was checked in a way that was natural in the eyes of those dedicated to the ‘dismal science’ of Political Economy. The strong devoured the weak, and the strong were left stronger to devour more of the weak. Railway crushed railway: railways swallowed canal and road. Today, when road and air take a share of the available traffic, we have a railw...