The Road and Rail Position Reviewed
Page 35
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By " Tantalus "
Our Contributor Asks How it is Possible to Co-relate the Rates of Two Services When the Conditions and Bases of Cost Vary so Greatly THANKS are due to "The Commercial Motor" for the timely warning, given in a recent editorial, regarding the attempts made to co-relate road and rail rates. Undoubtedly the 'views expressed therein are not the opinion of a large section of the industry which, in fact, has never welcomed the advances made to the railway companies by those representatives of roadtransport whose desire has been for a closer union 'between the two bodies. It seems obvious that in any such eventuality road transport would be the loser.
The journal rightly states that freedom from strife purchased by the sacrifice of liberty of the road would be achieved at too great a cost. Let us remember always that it is possible to pay too high a price even for the most laudable ambition. In the event of a rates agreement being reached between road and rail, what quid. pro quo is offered to road? Has any real assurance been forthcoming that the railway companies would cease their pre-war practice of the traffic-court persecution of hauliers? Would they be prepared to compete in the open market, leaving the trader free to select the type of transport best.suited to his own needs?
In all probability supporters of the Road and Rail Central Conference would argue that such questions need not be dealt with at this stage and that they are rather matters for post-war consideration. It may be depended upon, however, that any agreements which may be reached now will become part of the post-war scheme. In the meantime road-transport will have forfeited its freedom and its birthright for a mere mess of pottage.
How is it possible to co-relate the rates of the two services when the operating conditions and bases of costs do not permit of such co-relation? Indeed it is neither possible nor desirable. The announcement of the Central Conference that " streams of traffic " with which it has dealt now run into four figures is amazing. If the stream continues to flow at such a rate in due course it will become a surging torrent claiming road transport as its victim. It would appear that the railways—through the medium of the Central Conference —are obtaining from the road members the knowledge of the latter gained over a long number of years in the hard school of experience. Doubtless this information will be put to " suitable " use when the time is opportune.
Road Transport Must Fight for Freedom At all costs road transport must fight to retain its freedom to operate as an independent and essential section of the national transport system. A most interesting book on this subject was published recently by Mr. Gilbert Walker under the title " Rail or Road." The views expressed therein display thoughtful consideration and demand respect. Mr. Walker points out that whilst the controversy between roa.,d and rail is in abeyance temporarily—owing to the war—the issues underlying it remain unsolved.
At this stage no one can foresee whether—after the war—the transport services will be owned publicly or privately. It is possible to visualize a system of fixed transport charges, the method of transport being left to the decision of a unified transport authority regardless of the wishes of the trader or the consignor of the goods.
Even this would not eliminate strife between the competitors, unless firms and individuals were prevented from conveying their own goods by road or carrying for hire or reward. It is further recorded that C .licensees are much more numerous and own a far greater number of vehicles than the A and B licensees put together. Therefore, it is inconceivable that any scheme of co-ordination will be allowed to come into being which would deny the right of traders to carry their own goods, even if the railway companies and road hauliers cease to be competitive at some future time. No plan of road-rail co-operation can banish road competition completely; although, of course, it might be possible to tighten the licensing conditions to an extent calculated to discourage firms from operating their own lorries.
Economist Who Dislikes Monopoly Mr. Walker does not advocate the creating of a transport monopoly even within these limits. He attaches great value to the preservation of the principle of competition within a co-ordinated system. The form of co-ordination advocated is based• upon the establishment of uniform principles in the-fixing of road and rail rates. The classification of railway charges is based mainly on the value in relation to weight of goods carried or what the traffic will bear—a method which for a long time has been firmly established. Road transport—on the other hand—has no uniform charges, each operator fixing his rates either on a competitive or cost plus profit basis. This means that the value of goods carried has no relation to the rate charged. It will be observed, therefore, that the fundamental principles upon which road and rail rates are based are entirely different.
Mr. Walker, wan*, the General Railway Classification of goods swept away and the value principle to be abolished. Thus road and rail would be left free to compete for traffic in accordance with real costs. Frequently in the past it has been asserted that any such solution would prove unfair, as the haulier—unlike the railway company—does not have to meet the capital costs of buildings, maintaining the permanent way, etc.
As Mr. Walker points out—this view is a mistaken one. Whilst the initial capital outlay involved in starting a haulage business is comparatively low, the rapid rise in taxation, both on road vehicles and petrol, has increased considerably the operating costs. So much so, in fact, that in 1936 the yield of taxation on road vehicles and fuels exceeded by 26 per cent, the total expenditure on roads. It will be seen, therefore, that the haulier was making his full contribution. In addition the restrictions imposed by the Road and Rail Traffic Act of 1933 limited the number of vehicles permitted to compete with the railways. Mr. Walker rightly criticizes this system on the ground that it is prejudicial to the national interest. Further, he 'would disintegrate the railway companies into their constituent • lines for the purpose of fixing rates and competing with hauliers ; thus providing a stimulus to efficient service and the development of technical changes.
Whilst the foregoing proposals may not be acceptable to everyone, it must be admitted that their author has a wide and profound knowledge of his subject, also he has succeeded in presenting it in an " original and interesting manner.