The Disastrous Policy of Ratecutting.
Page 43
If you've noticed an error in this article please click here to report it so we can fix it.
A T the present juncture of events, when the -Cl-road-transport industry is striving against many adverse factors, of which the most important are the reductions in railway fares, in the rates charged for goods and raw material conveyed by rail, greatly increased taxation (both of vehicles and fuel) and, finally, the recent increase in the price of fuel itself, there is a great temptation for the operator to cut his own rates below what may be termed the economic figure. There need be no serious objection to a slight reduction in profits, but we would warn users most seriously against any further cutting than is entailed by this.
Nothing but harm can result from running vehicles at prices which are not only unremunerative but actuplly involve dipping into reserves, reducing the amount normally put by for depreciation and effecting such, so-called, economies as running tyres beyond their proper life, utilizing cheaper fuels and oils, and keeping to a minimum the attention given to chassis and bodies.
We are quite in accord with the principles of real economy, but those to which we have referred are deceptive, if not entirely false, and road transport will not maintain its present position if it has to resort to such tactics.
It should be remembered that in many ways the carriage of goods and passengers by road presents so many advantages that there should not be any real need for drastic measures. A difference of a shilling or two between rail and road fares on a long journey does not suffice to sway the passenger from one means of transport to the other. He must be made aware of the advantages which the road can hold out to him. Likewise, in the matter of goods transport, the conveyance from door to door without intermediary transference of load, offers an inestimable advantage of which thousands of traders are fully aware.
It is an unfortunate fact that much of the price-cutting is internal, that is, by competition between road hauliers themselves. Apparently, the only cures for this are better co-operation between them and bringing to their notice the folly of this unwise policy.