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SPINE-CHILLING THEORY ON COMPETING
Page 40
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by John Darker AMBIM MR. JAN POSNER, manager, international container services, British Railways Eastern Region, sparked off a warm controversy last week when he suggested that competition as a transport price regulator was becoming outmoded. What mattered today, said Mr. Posner, was the scale of the operation.
The speaker was addressing the three-day conference on the theme: "Container transport economics" sponsored by our associated journal, Freight Management (the main papers were reported in CM last week). Mr. Posner argued that British exports could never compete on equal terms with European manufacturers until British road /sea transport costs were brought down to the level of surface transport costs on the Continent. Shipping rates on short sea routes must come down to the level of land haulage rates, said Mr. Posner.
A delegate suggested that Mr. Posner's view on the failure of competition as a price regulator was slightly sinister. His experience was that rates had been reduced as additional ferry services had been introduced. This was a good thing for the exporter and it was surely wrong for the representative of a nationalized service to advocate such a policy.
Facing the facts
Mr. N. J. Freeman, session chairman, said he, too, would have raised this point if the questioner had not done so. Mr. Posner's idea sent shivers down his spine.
Mr. Posner said he was sorry nationalization had been mentioned. The scale economies he had referred to had nothing to do with State ownership; they were a fact of economics today. In private industry there were frequent mergers to promote rationalization, often to the limit allowed by the Monopolies Commission. In the short sea services to the Continent there was extensive over-capacity, and while this kept prices down there were limits beyond which it could not go. "I did not say I welcomed the trend," said Mr. Posner. "It sends shivers down my spine, too."
Mr. J. P. Wells, representing the RHA, queried the basis of the road rate structure quoted by Mr. Posner. Mr. Wells thought typical road rates for 200, 300 and 400 miles were of the order of 40/45s, 60s and 80s per ton. Mr. Posner's figures were substantially higher.
Mr. Posner said the rates quoted were as current as possible amounting to about 3s per mile—"not far out if the haulier provides tractor and trailer".
The wrong place
Mr. R. R. J. Plummer (Turners Asbestos Cement Co. Ltd.) asked whether the Channel Tunnel had been considered when BR planned its container service to the Continent Mr. Posner said the tunnel "has been drilled through all our heads." The tunnel, he thought, would come out in the wrong place for many traffic flows.
Mr. A. C. Boehme (Associated Steamships Ltd.) spoke as a convinced exponent of private enterprise. As an Australian container service operator he saw no hope of major cost reductions without a virtual monopoly. "Therefore I support Mr. Posner's spine chilling theory."
In the discussion following Mr. Hans Hatt's paper: "Problems facing Continental freight forwarders" Mr. Hatt revealed that container traffic to Switzerland was opened by Customs at frontier posts. Taxes were levied on gross weight of contents and it was necessary to unpack to determine weight. The final delivery of goods was by road; it was not worthwhile to re-pack goods into the container for delivery.
Summing up, Sir Matthew Slattery said it was clear there was no general agreement on container sizes or the best method of loading on ships. There was an urgent
branch manager, High Wycombe. Other BRS Parcels appointments: D. J. G. Swatland: traffic assistant, Walter Street, to succeed H. E. Partridge, who retires at the end of November. G. J. Ryan: branch manager, Muswell Hill. He was branch manager, Bournemouth.
D. S. M. Barrie, a director of Yorkshire Traction Co. Ltd., has been elected a member of the Council of the Institute of Transport.
John Douglas Mather has been appointed British Road Services Ltd. deputy company staff officer. He was previously Convoys Ltd. personnel manager.
W. Robertson has been appointed Albion Motors Ltd. sales contracts manager. For the past few years he has been responsible for the home market section and he succeeds L S. MaeGillivray who has retired after 48 years with the firm.
• Mr. W. McMillan (James Hemphill Ltd., Glasgow), an RHA vice-chairman, will address a convention of the Automotive Transport Association of Ontario in Toronto on Monday. The Canadian Government is considering regulating the road haulage industry under a single Federal authority and Mr. McMillan will explain the UK's controls and regulations.
need for international agreement and he suggested that an organization similar to the International Air Transport Association could well be established to iron out the many problems of container movement.
Mr. P. W. Yarwood, general manager, Associated Container Transportation Ltd., presenting his paper: "Is the shipper ready for containerization?" said there had been some misunderstanding of the function of inland container depots. The depot staff would not provide a transport service. They would provide a groupage service to customers, but the responsibility for transport would rest with the container consortia.
ACT, said Mr. Yarwood, would have offices at the ICDs but they would not be part of the line management of the depots. He envisaged the need for new centres of warehousing and distribution.
The container trend would "turn the transport system inside out" said Mr. Yarwood. Some users, he thought, had much homework to do. Using a racing • analogy he suggested that horses and jockeys in the container stakes were now in the saddling enclosure. Soon they would be under starter's orders. The users had time to lay bets but not much time to study form. "Not all users will benefit," he said.
A number of questioners criticized the reluctance of ACT to tell customers which mode of transport would be used for the land haul. Mr. Yarwood said the tariff would be broken down for the land transits in the UK and Australia and the sea freight.
Mr. II. H. Clarke (United Transport Oversea Ltd.) queried whether road haulage rates in the UK would be depressed by the overseas container operations.
Mr. Yarwood said shippers would pay no more for their land haul to ports than they paid at present. Road haulage rates to the Tilbury terminal would be subsidized.