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New Concept of the Traffic Problem

16th February 1945
Page 28
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Page 28, 16th February 1945 — New Concept of the Traffic Problem
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Which of the following most accurately describes the problem?

AT well-known industrial transport executive, Mr. Frederick Smith, M.Inst.T., recently read a paper entitled " Transport The Right Use of Communications," before the Swindon Economics Society.

He defined " communications" as highways, railways and waterways, providing the fixed " paths " for movement, whilst by " transport" he meant, in addition to fixed communications, the vehicles which effect that movement.

The activities of the railways are not confined to traffic over roads upon which rails are laid, for they are operators of road transport, -canal and steamship owners, warehousemen, etc. Canals and coastwise shipping groups also • embrace road transport and warehousing, whilst traders, who operate the greatest number of motor vehicles, also own docks, warehouses, barges, ships and railways.

Transport does not fall into clean-cut categories, and he thought that over-simplification of the problem on these lines had been responsible for the complete failure to solve it between the two great wars.

We spent no less than £750,000,000 per annum on transport and ancillary services, excluding overseas shipping. This was equivalent to the national income from taxation. This burden was far too heavy. If our system of communication were used in. the right way it could .easily be cut by £250,000,000 per annum. Transport produces a form of wealth—services—which is consumed in the act of production and cannot be .stored. If a train with 500 seats runs from Paddington to Bristol it produces, say, 60,000 seat-miles; if when. it leaves only 250 seats be occupied, 30,000 seat-miles will be wasted. It would not matter if the railway had power to charge double to those who travel; it would still be waste of national resources.

The correct approach is not financial, •but technical—the right use of our system of communications, and employing the vehicles upon the right lines of communications, the aim being to obtain the greatest movement of persons and things over the greatest distance in the shortest power-unit time. Measured against the seats or tonnage capacity provided per mile, some idea can be obtained of the level of operating efficiency of the different agencies used. In railway parlance the test figure is net passenger-miles per engine-hour or net ton-miles per engine-hour. The author's experience is that right organization of demand is probably more important than that of supply. He believes that the functions of road and rail are entirely different, and that there are types of operation. by each which could be more appropriately performed by the other, also, work done by rail and road which should be performed by canals or steamer.

• Should Transport Ile a Monopoly ?

The real issue is whether transport, which, until the Lc_ engine wrought a change, was organized and priced upon a monopoly concept, should preserve this structure or become free. Parliament, up to the first world war, treated the railways as if they were monopolies, and had continued to do so although they have not had a monopoly of traffic for many years.

Much thought has been given to reforms in the legal relationship between railways and their competitors, with the result that by 1939 the general opinion of the competitors and of the trading community was crystallizing in. favour of an extension of monopoly rather than its limitation. The various agreements embodied in the Report of the T.A.C. upon the railways' "square deal" proposals were, broadly, based upon the extension of price control to other forms of transport, i.e., upon the cartellization of the transport industry.

Monopoly conditions founded ia this way in an industry essential to the public tend inevitably to the establishment of a level of prices founded on the least efficient factor in the cartel, usually chained to the capital value of equipment which, for practical Purposes, is obsolete.

The author cannot accept the view that anything would . be achieved by writing down railway capital. This would not contribute a fraction towards the solution of the transport problem, but only conceal it. Railway capital should be treated as a whole, without pedantry about writing off a mile or two of line which might, perhaps temporarily, have passed out of use. Once this bogy was out of the way the railways would feel free to adopt measures of increased operating efficiency which would achieve the desirable purpose of raising the net revenue to a level which would amply 'remunerate an even greater capital.

How will it be possible under a private monopoly, or a price cartel, to ensure the fullest efficiency of service at the lowest total cost with the best modern scientific equipment? A monopoly of essential services can always show a profit if there be no ceiling to its prices, even if it be extremely inefficient. In a price ring of the magnitude involved, prices will have to be linked with those of the forms of transport in which they are highest. Where, then, is the inducement to efficiency? The Road a,nd Rail Central Conference has been studying the problem in a more friendly attitude than might have been thought possible. There is no doubt that the railways' " square deal" proposals frightened the road-haulage industry.

Why a Rates Stiucture May Fall It is obvious that a road-haulage-rates structure will fail to equalize competitive conditions with the railways, unless rates charges for a similar service be similar There would be no need for agreement between the railways and road haulage except to consolidate and enforce rates which were not competitive. The author believes that the Conference will be forced to the conclusion that, without similar obligations of service, i.e., to carry without discrimination between customers, a rates structure will fail.

Perhaps the most important factor militating against a rates agreement is the right of the trader to carry his own goods. The higher the haulage rates the greater will be the increase in carriage by traders, but if this competitive check upon inefficiency goes, what will be left to ensure efficiency?

It seems that the assumptions upon which the interested parties are proceeding must lead ultimately to a complete financial integration of the whole of the transport industry. That means full monopoly of some kind or other. Great impetus will be given to this march towards monopoly if there be no serious attempt, as there must be if price control is to work, to impose obligations similarly upon all forms of transport. The profit motive would disappear. It would be an easy way to attain the socialist ideal without the socialism, but smacking of Fascism of the German type. Pefsonally, the author does not think the country would stand it. It would probably insist on full nationalization, for a large-scale monopoly would be just as bureaucratic. The author emphasized that it must not be assumed that he either advocated or opposed nationalization. He did not think that either a private monopoly or nationalization was inevitable, but this did appear to be the end of the policy which has held the field since early 1939. In his view the transport problem is fundamentally a technical one, and the financial results are the , consequence of

technical efficiency or otherwise. He believed that farreaching technical reforms are necessary and practicable, and that they could never be achieved under a monopoly, which would consolidate technical efficiency and produce profits by exploiting the common people.

The key to the railway problem is the raising of the average pay-load on trains from 125 to 500 tons or over, and, the overall speed to 30 m.p.h. or more. To do this, loads must be concentrated at a limited number. of centres for movement to other such centres, feeding and tapping these by. road vehicles covering areas on various routes • from the centres. This system would replace short-range road services to feed local stations, and feeder trains to what represent concentration centres under present conditions.

Mr. Smith's solution, for track costs would be for' the whole system of communications to be taken over by the State and integrated administratively and financially into a complete unit. There should be a Communications Fund into which would be paid rents for the lease 9f the tracks. Costs of maintenance as a whole would be chargeable to the Fund and would be recoverable by a fixed levy per tonmile, or, on road vehicles probably on their carrying capacity.

Roads exclusively for motor traffic might necessitate a special levy, but roads in general community use would call for-a levy on a similar but higher basis than at present, and on a higher scale still for traders' vehicles. Motor vehicles licensed exclusively to deliver traffic to, or draw it from, railway, canal or coastwise terminals would not be subject to levy. This would encourage a true division of function.

The author considers that the first effect would be to remove the pressure upon the owners of fixed track to put every ounce of traffic over it, without regard to the effect on operating results, There would have to be a clearinghouse system representative of the different carrying services and of traders. Its work would be to aggregate the traffics into loads suitable for the different vehicles, and allocate traffics to the most suitable forms of transport.

Tags

Organisations: Swindon Economics Society
People: Frederick Smith
Locations: Bristol, Paddington

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