Solving the Problems of the Carrier
If you've noticed an error in this article please click here to report it so we can fix it.
An Operator's Suggestion for Rates Stabilization
A Well-thought-out and Simple Scheme for Assessing Rates for Goods Haulage for Both Distant and Local Work Which has Been Put Forward for Criticism
YORKSHIRE hauliers have for longer than anyone— and with greater persistence—been energetically attempting to arrive at a basison which. stabilized haulage rates could be assessed.
. The most recent effort is embodied in some notes I have just received, via Mr. Harry Clark, secretary to the Federation of Yorkshire Road Transport Employers, from a prominent, experienced and large operator in Yorkshire, to whom I shall refer in what follows as Mr. A.
Having suggested a basic formula for general application to this problem of rateS assessment, this correspondent proceeds to explain his scheme, so that some of the criticisms which might be raised are answered beforehand. I am going to deal first with his explanation, using it to lead up to a description of the scheme.
Classification Of Goods Not Essential Part of Rates Schedule The classification of goods is dealt with first of all, and, obviously, my correspondent views it as a problem of " to be or not to be." It is clear that, like myself, he thinks that the classification of goods is not an essential part of a road-transport rates schedule. But, he says, "If classification of goods be made compulsory, then the present railway classification could be used."
In that event there should be agreed a competitive rate for road transport which should be the rail rate less a percentage. That is to say, if classification be inevitable, the railway classification would meet the case, but not the railway rates. The charges to be made for the transport of goods by road should be assessed as the rail rates less a percentage. The object here, and it is quite a good one, is to avoid having two independent schedules of rates, one for road and one for rail. That would have the effect of adding complication to something which, goodness knows, is already sufficiently complicated.
In continuing to discuss the subject of the railway classification, he points out that one of the difficulties which would be emphasized in its application to road transport, is that commodities can, even in the present railway classification, be put into several grades. Merchants and manufacturers are able to .devise schemes for varying the rates for their vehicle by declaring that the consignments are in the lower of, say, two classes. They do so by reference to the list of exceptional rates which, in the railway classification book, appear as appendices to the main classification. It would be difficult, he points out, for road-transport operators to deal satisfactorily with the kind of problems which this procedure would introduce.
In the hope that his fear of compulsory classification is groundless, Mr. A. puts forward an alternative suggestion. He recommends the classification of vehicles. In that he is undoubtedly• right, that being the only logical method of Classification which can, with any satisfaction at all, be applied to the road transport of goods.
Percentage Addition When Special Types of Vehicle are Used
He takes a popular class of vehicle as being the lowest kind suitable for long-distance traffic, and suggests a minimum rate to apply to that type. In cases where the traffic is such as to necessitate the use of a boxvan or a special type of vehicle there should be the addition of a fixed percentage to the standard minimum rate.
Cognizance of the problems introduced by bulky traffic, or by the conveyance of goods such as machinery, which occupy a considerable amount of space in proportion to their weight, is made by suggesting a bulk tonnage weight or cubic ton. In an particular traffic the charge wciuld be either according to cubic capacity or to actual weight, the higher rate invariably being applied.
One reason why tbe classification of goods seems, to some extent, to be desirable—almost unavoidable—even for road transport, arises because of the incidence of insurance in transit, which falls heavily on some traffics and lightly, or not at all, on others. To surmount this difficulty it is suggested that all goods, in all classes, should he carried at a fixe4 rate, subject to the variations in respect of type of vehicle and to provision for extra load ing and unloading time, and the risks taken care of by compulsory goods-in transit insurance. The premiums for the latter, and the terms and conditions, should be standardized.
He points out that, in view of the weight of insurance which, under those conditions, would come upon the market, it is reasonable to expect that the rates quoted could be considerably reduced. • Applying the railway principle of charging, namely, basing" rates on the one-way principle and bearing in mind the time taken to load and unload,, it is suggested that there should be a basic fixed loading time of 20 minutes per ton and a similar period for unloading. This period should be free, that is to say, it should be included in the basic tonnage or ton-mileage rate. In the event of the time needed for these operations exceeding that just quoted, it should be charged at an agreed figure.
In the case of local traffic, which inevitably includes a tremendous variety of conditions, it is suggested that, in the first place, there should be• a limiting radius within which local rates should apply. The rates should be on an hourly basis and I gather that it is accepted, in principle, that the local rate would not necessarily be the same in all districts.
The concluding note in., this explanation suggests that provision should be made for the basic rate per ton mile to be adjusted from time to time, according to the variation in tanning costs. It is-pointed out that, in this way, having agreed a basic rate, adjustment would involve very little in the way of complication and could be most easily effected.
Now for the suggested basic formula. It comprises five paragraphs, as follow :— (a) If classification be inevitable, then the railways should agree to allow road transport to utilize their rate books and to charge at the railway rate less an agreed percentage.
(b) Assuming that the conditions suggested in (a) do not apply, then there should be a minimum rate per ton mile (if the figure of 2d. is suggested, but as only a basis for discussion), this minimurn to apply to all classes of vehicle and in the case of bulky goods the ton is to be measured as 100 cubic ft.
(c) Any traffic weighing more than a ton per 100 cubic ft. to be charged on the basis of actual weight. Any traffic which weighs less than 1ton per 100 cubic ft. to be charged as though 100 cubic ft. was 1 ton.
(d) Twenty minutes per ton is to-be allowed for loading or unloading. For periods in excess of this a charge must be made per hour and this will vary according to the class of vehicle, but should be at a minimum of 7s. 6d. per hour.
(e) Local rates, within an area of 15 miles radius (here again the figure is put forward not in any arbitrary way,. but as a basis for discussion) of the collection base to be charged at an hourly rate. locally agreed, with provision for certain minima.
The foregoing schedule is not precisely as it was put to me, I have, and I hope I may be forgiven, edited the paragraphs a little as there seemed to pee to be a certain amount of redundancy.
Here are my early reactions to this scheme. In the first place I do not accept the principle that a schedule of road rates must, as a matter of course, be made up of charges which are less than rail rates. I have often protested against the suggestion that rail rates should serve as a basis for road rates, but I have most emphatically never suggested that road rates should be less.
There are many traffics which road transport cannot economically carry at rail rates, let alone rates at less than rail. There are many traffics which,, by reason of the better service given by road transport, can demand and receive better rates than those which are charged when the traffic is carried by rail.
Moreover, I dislike intensely the suggestion that the only way to meet rail competition is to cut rail rates. That, in my view, is a principle which is totally wrong in its application to any business. I am not, in this, shutting my eyes to the fact that, in competing for traffics, the question of comparative rates cannot be ignored, but I am quite certain that, in the long run, service and facilities must also count.
I am utterly opposed to the ton-mile as a basis, for assessing rates for haulage of goods by road and am of opinion that it is quite unsuitable for that purpose.
The figure of 100 cubic ft. per ton, is, in my view, excessive. In all my dealings with this subject, I have found SO cubic ft. to be the accepted figure. When I was assisting Associated Road Operators to compile a stabilized schedule of rates, this subject was discussed and the figure of 80 cubic ft. was discovered to be the generally accepted figure. I think it should remain unaltered.
The allowance of 20 minutes for loading and -unloading is fair and about the average period. Readers who are inclined to suggest that there are traffics which can be loaded or unloaded in shorter times should realize that 20 minutes is not the net figure but, presumably, makes provision for those frequent delays and incidents which have the effect. of making the average time for loading and unloading so much more than the net period.
The amount quoted for demurrage, namely 7s. ekl. per hour, is, I presume, to be applied to the smallest type of vehicle. It should be fairly steeply graded, as the load capacity increases, and should be regarded, not as a direct compensation for loss of use of the vehicle, but as a deterrent.
The final clause, relating to local traffics, will, in my opinion, have to be modified, or at least expanded. The radius of 15 miles, suggested as a basis for calculation, covers too wide a field. A fair rate per hour for a 54onner. of the popular type operating over a 15-mile radius, should not be less than 13s.
Municipal authorities are likely strongly to object to a suggestion that they should pay 13s. per hour for the hire of a yehicle of that type. For such work the radius of operation rarely exceeds four miles, and a fair rate would certainly be much less than 18s.; the figure of 7.s. per
hour more nearly meets these conditions. S.T ,R.