Road-Rail Rates Difficulty
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WE gather that there is some difference of opinion among the leaders of the industry even as regards the fundamental principles of rates fixation. That should not be and, until there be some reconciliation of views, progress will inevitably be delayed. There are some who favour the adoption of railway rates almost en bloc; others, whilst not quite so reactionary as that, are, nevertheless, inclined to accept the railway principles of assessment, namely, on the basis of quality of traffic. To follow either method, without some investigation to find out exactly whether the rates thus proposed are likely to prove a profit-bearing revenue, would be folly indeed. Above all, it would be grossly unfair to the majority of hauliers, and especially to those whose energies are restricted, in extent as well as in respect of class of traffic—the latter in particular. Those who argue along these lines can do so only because their experience is limited to a particular phase of road transport, that which is closely allied in its traffic and method of handling to the higher grades of railway traffic. To accept railway methods or railway rates would be satisfactory to operators such as these. It might be entirely unsatisfactory for those whose concern is with the lower grades of traffic.
Rates Principles that Differ Basically.
To apply the principle of rail rates to road traffic is basically unsound. It ignores the fact that the railways carry all classes of traffic and draw revenues from all. They are, therefore, enabled to strike a profitable balance. Road transport operators individually may be carrying one or two classes which may be good revenue bearing or may be poor. For the railway principle to be equitably applied, those hauliers in the favoured class must be prepared to subsidize the others. How does that appeal to the rail rates protagonists? Nor must it be forgotten that every small haulier is limited, by Traffic-Court-made law, to handle only the class of goods he is accus tomed to carry. He may not lightly change, for if he does he is likely to run the risk of losing his licence, even his business.
Some safeguard is essential, some check, a ready reckoner or yardstick, against which any proposed rates may be measured up to see what likelihood there is of them showing a reasonable profit. That yardstick can be only a road-rate schedule on the one satisfactory principle of assessment—cost of service.
Nothing less will meet the requirements of the case. Present-day road rates will be useless for the purpose. They are chaotic and, so far as most hauliers are concerned, definitely and inconceivably uneconomic. An examination of the finances of many operators would make that abundantly clear.
Criticism that Will Not Hold Water.
There are some influential leaders of the industry, nevertheless, whose views are as narrow as the experience on which they are based, who persistently deride a suggestion that the roadrates structure can be erected upon the basis we are _commending. When challenged, they talk airily and somewhat vaguely of terminal charges, depot expenses and the like. That criticism is in itself a refutation of their own arguments. Cost of service is made up of cost of vehicle operation and the expenses so named. The cost of vehicle operation, the main element, can be assessed nowadays within a very narrow margin of error, assuming that due provision be made for maintenance and depreciation on a common basis according to usage.
Our recommendation to the general body of our haulier readers is to insist upon the setting up of such a standard as the preliminary to any agreement on rates. Failing such insistence we foresee a further period of dissatisfaction and, at some subsequent date, a revision of any agreement which has been made so that full account may be taken of the factors which we have here indicated.