Towards Transportopia
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Striking similarities between American system of controlling road carriers and the E.E.C. proposals THE similarity between the evolutionary reasons for the present Federal and State system of regulating road carriers in the United States and the situation appertaining in Europe—in particular within that section comprising the European Economic Community—is quite striking in many, though not all, respects. It is striking enough to have caused Brigadier A. E. M. Walter, Britain's foremost expert on European transport affairs, to remark in a paper to the Institute of Transport in London last November that a study of the evolution of America's regulatory system might well point the way in which Common Market transport policy is going during its quest for a joint transport pattern. It is given added current point by the meeting, due next Tuesday, between officials of the transport committee of the European Parliament and the American governing body, the Interstate Commerce Commission.
As is well known to readers of The Commercial Motor, this task of laying down a transport policy is proving tremendously complicated for the six present members of the E.E.C.; add to those complications the catalyst of British entry (if it materializes), plus at least the entry of Norway and Denmark, and one can see that the chances ' of those difficulties lessening are remote. Rather can they be expected to increase, .because it would seem to be quite irrational to expect national transport control systems either to give way willingly to an overriding, supranational regulation system or not to be jealous of their own rights.
This friction is often apparent in the U.S.A., particularly with regard to maximum weights and dimensions, which vary a lot between States. If it is apparent in a community of American States, all still within one country, how much more apparent will it become in a community of nations such as the E.E.C. And no-one would suggest that the nations of Europe, suspicious and jealous of each other as they tend to be (with old enmities and old victories and defeats still rankling,) will come as easily to a joint pattern in anything!
However, this is not progressive thought, because Europe is moving slowly towards this goal. At the end of the 1939-45 War, through the Economic Commission for Europe (E.C.E.), the Organization for European Economic Co-operation (0.E.E.C.) and other organizations, European governments (our own included) began to pay lip service to joint approaches to a number of matters, including transport. In particular, the E.C.E. set up its inland transport committee in 1947. But lip service is really as far as it has got— in something like 15 years! There has been talk in plenty, but actual results are meagre. This is not the fault of the experts concerned so much as their different national viewpoints and political considerations. Nevertheless, it is the position as it stands.
The advent of the Common Market is probably the most likely means of ever achieving uniformity within European
transport because therein lies the necessary seeds for success —1 joint parliamentary representation and common economic aims and machinery. In these seeds, too, can be found the similarity between the E.E.C. and American approaches to road transport.
But if this surmise is correct that the Common Market's transport regulatory organization will eventually approximate to the American organization, then British operators—hauliers in particular --will have to give up some cherished ideals which at the moment many of them seem to think they will be able to keep, in some form or other, if we join the Common Market. There is also hope. Hope that if the E.E.C. does plan its transport in such manner, then it will have the inestimable advantage of being able to study the American model and profit from the mistakes that have been made there. That is why next Tuesday's meeting could be more important than would seem to be the case on the surface.
So let us, very sketchily (because the subject is vast and complicated), compare a few basic points of the existing American and possible European systems and see where British interests might hit troubled waters.
Governing Bodies To start with, the governing set-ups are comparable. In America, one finds the forming of policy matters (through Congress and the Senate), with interstate regulation responsibility that of the huge and immensely powerful Interstate Commerce Commission, which in turn delegates active responsibility to a number of bureaux (in the case of road transport the Bureau of Motor Carriers). Individual State Commissions very largely govern road transport which runs only within their own boundaries.
" The E.E.C. has its Council and Parliamentary Assembly (Congress and Senate) which formulate policy; and the Commission which is the organ which translates that policy into action (the Interstate Commerce Commission). Although it has not yet had cause to do
By ALAN HAVARD
so, there would be nothing to stop the E.E.C. Commission from setting up administrative divisions for each form of transport (the bureaux). The E.E.C. Commission has already made it abundantly clear that its main concern, at least in the initial stages, will be to regulate mainly international road transport and leave individual member countries' transport ministries to maintain regulation and control of their own intrastate transport, subject to policy decisions by the E.E.C. Council. Here there is, near enough, a parallel.
Points of Policy Now consider declarations of policy. In 1940, the United States Congress declared a National Transportation Policy. This provides for: " fair and impartial regulation of all modes of transportation subject to the provisions of this Act, so administered as to recognize and preserve the inherent advantages of each; to promote safe, adequate. economical and efficient service and to foster sound economic conditions in transportation and among the several carriers; to encourage the establishment and maintenance of reasonable charges, transportation services, without unjust discrimination, undue preferences or advantages, or unfair or destructive competition practices; to co-operate with the several States and the duly authorized officials thereof; and to encourage fair wages and equitable working conditions; all to the end of developing, co-ordioaling and preserving the national transportation system by water, highway and rail, as well as other means, adequate to the needs of the commerce of the United States, of the postal service and of the national defence."
In the case of the Common Market countries, the now-famous Schatis Memorandum laid down, in 1961, five basic principles on which the E.E.C.'s joint titansport policy should , be based. These were:
(i) Equality of treatment betireen the different carriers and between' Carriers and traders.
(ii) Financial autonomy for transport enterprises which should stand on their own feet and pay their way without subsidy.
(iii) Freedom of action sO that the carriers should be free to fix their rates Within certain limits and be free to operate without undue restriction.
(iv) Freedom of choice so that traders should be free to choose the form of transport which Suits them best and be free to 'operate their own transport. (v). Co-ordination of investment in the
different forms of transport: 'The similarity' of organization has already been shown; now can be seen also similarity of policy, .,It
therefore, seem a possibility. that the E.E.C. Council will either make a declaration on similar lines to that of the U.S. Congress, or otherwise similarly enact. There is certainly indication that• it will follow the same general paths as Congress.
It is at this stage that some of the cherished tenets of Britishroad haulage can be seen in direct challenge to what it seems the E.E.C. might do. The Commission has already Made clearits desire for early fixing. 'of rates brackets (within the forks of which operators'woUld have charging freedom) for different types .of traffic. This is more liberal than • the American system of fixed rates between competing' hauliers on a particular route and carrying similar traffic. What price, therefore, British 'objections to the EEC. proposal (should we min)? We would not be entirely without support; but whether it would be enough to carry the day. seems, at the moment, rather Wishful thinking.
No Discrimination
A cornerstone of American transport policy has been equality of competition between all forms. of transport. This, too, is inherent in the Treaty of 'Rome: The E.E.C. already prohibits_ unfair discrimination or subsidization and seeks to control cartels and monopolies: , British hauliers actively resent any suggestions of co-ordination, -integration and So on. They are words with unforttinate political connotations for : them.. Yet this is another cherished ideal that might well be .trampled if we joined 'the 'Common Market. • .
In practice, it . might not be so had. American hauliers, for instance, live With io'although they do not fad to press their own ,case, wherever opportunity occurs. As. recently .as. last October, Charles A. Webb, a 'member of the .Interstate Commerce Commission, told' a conference of regular common carriers (the American A-licertsee): "No • major legislation. is likely to be passed if it represents a total victory for one mode of transportation and a humiliating defeat for equally important segments of the industry?! ,
From the contact I have had With ,tott transport officials of the E.E.C. Commission, I can vouchsafe the opinion that they would subscribe wholeheartedly to those words. These are the officials who will do much to shape European transport policy, and so that is another reason for thinking that, transport-wise, Europe might well go American "---at least to a considerable extent.
Last year President Kennedy gave a Message on Transportation, two fundamental principles of which were: a consistent and comprehensive framework of equal competitive opportunity in order to assure fast, safe and non-discriminatory n14 transportation services at the lowest economic and social cost to the nation; and a greater reliance on the forces of competition and less reliance on the restraints of regulation. Here again, E.E.C. transport officials are firmly wedded to'both these ideals themselves.
No Politics A small, but very important, incidental aspect of the American policy is that it is all-party. In other words, transport is lifted outside the arena of political bickering and dogma. Europe's Common Market countries have the chance to go the same way and, therefore, so has Britain if we join the E.E.C. Personally, I can think of no other way it ever will be removed from political wrangling in this country except by the force of acceptance of a declared E.E.C. common transport policy. Yet 'how vital this .point is to any transport system, national or international!
In the actual field of licensing there is, again, similarity to be traced. In the U.S.A. two types of commerce are legally recognized,. these being Interstate and Intrastate Comnierce—the precise two categories (international and internal transport) which the E.E.C. Commission recognizes. The I.C.C. regulates the interstate and, as already stated, llargely. leaves the intrastate transport to the State concerned. The E.E.C. Commission proposes similarly. Obviously, there is ranch overlapping in the U.S.A.; the LC-C. recognizes this and works with the State Corn"-, missions on such matters as affect both agencies, with the object of securing easy day-to-day working of the whole transport system. Here is a field where the E.E.C. Commission could learn much from the Ameriean administrators, so that the Common Market could avoid the pitfalls which trapped them. If the surmise is true, it therefore follows that Britain's transport ministry would approximate to an American State Commission: working in conjunction with the E.E.C. Commission, keeping its national autonomy but surrendering international matters to the Commission.
The American system of licensing differs basically from that of the U.K. in that it licenses a carrier to a route, rigidly controls his rates and general actions, but leaves hint free to expand his fleet as he chooses. It seems reasonable to suppose that the E.E.C. Commission, which started-its issue of quotas for international work on January 1, will generally do the same rather than follow the British pattern of licensing.
Final decisions of the I.C.C. are subject to Federal Court appeals on questions of law. Similarly, the E.E.C. Commission must bow, if it is wrong in law, to the European Court.
Basically, in America there are three types of haulier: the common carrier (either regular or irregular as to route); the contract carrier; and the private carrier. All accord exactly with British licensing divisions, hut in the Common Market the question of contract carriers is not yet settled. Needless to say, the private carriers are not regulated (a
parallel case can be seen in British C-licensees). tut, additionally, in the 'U.S. there are a very large number of legally exempt 'traffics—particularly agricultural produce. These unregulated and exempt forms of road transport have given rise to degrees of illegal operation th-at make any such troubles in Britain seem non-existent. It has been estimated that one out of every four inter-city goods vehicles in America runs illegally.
The I.C.C. has powers itself to impose penalties on offenders against statutory conditions or published rates. The E.C.C. Commission can recommend the imposition, through national legal processes, of similar sanctions or penalties.
Rates Control The control and publication of rates is another cornerstone. of American transport policy; there is every indication that it will also be one of E.E.C. transport policy. But, as already stated, the British haulier's antipathy to published rates is not likely to carry the day in the Common Market. However, here is another field where the E.E.C. could learn from American experience. There is a very strong feeling in the U.S. that the tight control exercised by the I.C.C. over rates should be relaxed and that other bodies should exercise, at least part of that control. This feeling is reflected in current, controversial Bills which may or may not get through Congress. An additional -factor in the U.S.A. is that of the establishment of joint rates between different forms of transport and between carriers in any one faun of transport operating in competition over the .same route.
One of the, matters which figure in the proposed E.E.C. transport policy is that of studies of track costs. In Britain this has been unsuccessfully attempted for some 30 years. Even more to the point, the Americans have never really successfully achieved such a study; .there is always considerable controversyat every Step.
Investment
Another E.E.C. proposal is to co-ordinate investment in the various forms of 'transport. • The I.C.C. is nqt basically responsible for this 'in America, but it does have a certain amount of control in this sector of' the industry. The I.C.C. also regulates conditions of employment for workers in the transport industry; this is another proposal of the E.E.C.
Commission. • However, the biggest . cause of longterm friction in the U.S.A. seems to be between the individual State Commissions and the I.C.C. The task of avoiding such friction within the E.E.C. would be tremendous.
So Brigadier Walter seems to have been right. Look to America for a reflection of Common Market transport policy. But the reflection also shows the unworkable and unwanted pieces of the American system, which could be of tremendous advantage to the E.E.C. Commission, whose experts all seem to he willing to learn 'and are not in any way dogmatic about their own beliefs.