SUPERFLUOUS COMPETITION
Page 48
Page 49
If you've noticed an error in this article please click here to report it so we can fix it.
Some •Hitherto Undiscussed —of Road Transport, with
Aspects of the Road Traffic Act Practical Suggestions for Insti and its Effects on the Welfare— tuting Precautionary Measures
THERE is considerable argument just now in favour of the elimination of " unnecessary " competition. Many of the reg-ulations alleged to be simmering in the mind of the Minister of Transport are devised to that end. The combination of all London's passenger-carrying organizations under one management embodies that same objective.
The idea seems „sound, but there are many persons who might, with justification, at least enter a plea that their views should be examined, even though they may have axes to grind. With this end in view I interviewed the directors of one of the best-known clearing houses in the country, and evolved these views as the outcome of the subsequent discussion, .which largely confirmed my own opinions on the subject If the elimination of competition is going to be beneficial generally, all is well, but are these drastic proposals really going to effect the all-round improvement predicted for them? Looking a little farther than the immediate future and trying to visualize the state of affairs that is likely to ensue when most of the unnecessary competition has actually been eliminated, doubts are raised. There is an instinctive feeling that some competition is quite a good thing in itself.
The Combatants : Railway and Road Interests.
We British people dislike being told that we must do this or that—in other words, we like an alternative. Suppressing that for the moment, however, let us try to glimpse the future, using as our means for piercing the veil our knowledge of what has happened in the past.
First, clear the ground of any false premise: get out into the open and see exactly how we stand and which are the parties concerned.
The combatants—competitors is only a polite synonym—are the railway and road-transport interests. Not all or any of the politely worded and optimistic references to co-ordination and working for the common good will ever really disguise that fact. The railways are losing traffic to the roads and road-transport concerns everywhere find themselves in direct and fierce competition with the railways.
The Road Traffic Act, in certain of its provisions at least, might have been devised as an instrument for the elimination of " needless " competition. Its provisions are excellent. The general body of rightthinking road-transport users agree, for example, that the limitation of the hours of drivers' labour is a muchneeded piece of legislation. What road-haulage concerns fear is the ultimate effect of the operation of this clause of the Act in its relation to the rivalry of road and rail. They do not, however, suggest modifica tion of the clause, but they do demand that provision should be made to prevent the untoward developments that they anticipate.
Rates for long-distance road haulage are at present cut as fine as they can be consistent with reasonable profit-earning. They are competitive with rail rates, but do not show to great advantage, being just enough, together with the particular advantages which road trhnsport offers, to turn the scale in favour of the road—at any rate, so far as certain classes of traffic are concerned.
The effect of the Act, in so far as this particular clause is concerned, will be to advance road-haulage rates all round to an extent which may best be indicated by quoting the example of London-to-Birmingham rates, which will be increased by about 5s. per ton.
It is believed that this increase will afford the railways the opportunity for cutting many of their present standard rates so that the economies they offer to trade will outweigh the advantages which road transport confers. Remember that road transport entails only two handlings and is a door-to-door service, demands the minimum of packing, and is practically immune from pilferage.
Eliminating Competition from Road Transport.
It is assumed that the railway companies will carry traffic at a loss and continue to do so until the presumably " needless " competition of road transport is eliminated and a monopoly is created. After that has been achieved, and legislation prevents its recurrence, is It not likely that rates will be increased and the opportunity will be taken for making up the losses involved in the rate-cutting, as well as making extensive profits?
This is an example of what may result from the elimination of "needless" competition. It is sincerely to be doubted if that result will be to the benefit of the community at large, as it will leave traders entirely at the mercy of the railways.
The competition between rail and road, as it exists to-day, is in the Majority of cases utterly unfair both to the railway and the road-transport shareholders. It benefits some traders and penalizes others, even though they may be in the same industry.
What I am getting at is this. A trader in a large commercial centre as, say, Birmingham, sending goods to another large commercial centre as, say, Liverpool, has two definite and reliable methods, i.e., rail and road. What is the result? The rail gives a special rate—the road-transport concern under-cuts it—the rail comes down again—the road comes down again and the eventual " winner " is a "loser," ,because the traffic Is carried at an uneconomic figure. ' Now take the case of the trader, whose factory is the same distance from Liverpool, gut situated where the road competition is less severe. .
His competitor in Birmingham beats him every time, because the rail, having little or no competition, charges its standard rates and refuses any application for special concessions. So soon as road transport is organized on this trader's route the BirminghamLiverpool position obtains.
Clearly, if anything is to be done it must be done now, or very soon. The objective of any action must be the prevention of unfair competition. Let the road rate be legally standardized, if you like, and let the trader choose, by virtue of the service he receives. Let it be made illegal for the railways to quote rates which are not profitable in themselves. The rates for all classes of traffic must be available to the public and in such form as to be readily understandable. The present railway-rates book is far from being that.
Given the benefit of these reasonable, straightforward precautions, the road-haulage industry, notwithstanding the effect of the inereased burdens resulting from the re-arrangement of drivers' hours of labour, can hold its own. A certain amount of re-organization will be necessary in order to effect those economies which will offset the increased costs.
One of the most effective moves will be the more extensive employment of road-transport clearing houses. An essential preliminary to that is the purgMg of the system of its doubtful elements. Probably the best means to that end is an alliance of the reputable establishments ; the formation of an association of clearing houses, membership of which could be taken as proof of integrity. Merchants and hauliers going to a member of the association could be sure of fair and business-like treatment.
Organization of the small hauliers would come next, and eould well be carried out with the assistance of a clearing houses association, if only for the reason that reputable clearing houses are at present diffident about employing small hauliers. They fear to be let down by them. Co-operation amongst these hauliers, backed by the clearing houses, would be their salvation.
With three strong organizations, namely, the LongDistance Haulage Contractors Association, the Association of Clearing Houses, and the Co-operative Association of Hauliers, all linked together and working for the common good, almost anything might be possible. The first of these three is in being. There is, as I have definite knowledge, agreement amongst those chiefly concerned that the other two are ripe for formation. Only the first step is needed. That might well take the form of a meeting of a nucleus of repre sentative clearing houses. S.T.R.