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matters by John Darker AMBIM
Road versus rail in the United States
Fuel shortage is inhibiting the truckers
THE market-split between road and rail in Europe will be fought out in the next decade under the influence of Commission policies, themselves shaped by the parlous finances of railway administrations and by an increasingly powerful environmental lobby.
Although direct comparisons with the USA need to be treated with caution, the land distances involved are not so dissimilar that experience in one is inapplicable to the other.
Mr George E. Toles, an American transport writer, has made a topical survey of the competitive position of road versus rail in the United States. The trucking industry there, he says, is booming as never before, with trucks the fastest growing and most flexible means of conveying goods, especially high-value goods between cities, into showrooms, and up to doorsteps.
20.5m-trucks In 1945 there were 4.8m trucks registered in the US. Today there are about 20.5m, including 997,000 owned by the Federal Government. There are some 15,100 motor carrier companies with revenues (1971) of $16.7 billion, or 53 per cent of that year's total freight transport revenues.
Mr Toles says road transport flourished because of its speed and ability to deliver door-to-door instead of just to the periphery of the city. "This was a convenience worth a premium price to manufacturers."
The 41,000-mile Interstate Highway System, now nearing completion, was one of the greatest productivity boons to truckers. The new roads have attracted more private motorists and there has been costly congestion around big cities.
Mr Toles does not refer to some notorious environmental obstructions to the completion of the Interstate Highway System, nor does he stress that the roads vary in width and quality in various states, so that -the largest triple-bottomed outfits cannot run all over the network. He quotes Waller Lescure, financial vice-president of Smith's Transfer Corporation, as saying: "No doubt the Interstate has been about the
best thing to happen to us" and the contrasting remark of a railroad man who wistfully said: "Imagine how well off we would be if the Federal Government owned the right-of-way and laid track for us."
A comment of Edward Kiley, top research man for the American Trucking Associations, Inc, would be entirely appropriate to the UK and will be true of Europe when frontiers and Customs and trade barriers are of no account. Said Kiley: "The truck has become a rolling assembly line. Warehousing is being cut to a minimum now, largely because of trucks." Kiley added that many industries have their components delivered overnight for assembly the next day.
Trucks in the US fan out toward regional distribution points by nightfall bearing finished goods. "If trucks stopped rolling for one night," writes Mr Toles, "plants from coast to coast would have to be idle the next day."
1950s battle Most observers agree that the trucks and railroad battle was fought and settled in the 1950s. Today, the two industries develop separately with little interaction.
As early as the 1930s the development of pneumatic tyres and high-compression six-cylinder diesel engines dented the hold of the railroads. So many new motor carriers rushed into the market that the Interstate Commerce Commission was given jurisdiction over the road haulage business. Lorries do not need to wait for a string of vehicles to be assembled before moving off; as the highway system grew the road haulage business burgeoned.
There has been a running battle between road and rail for the hauling of cars. Truckers made inroads into this growth market in the 30s and by 1958 were hauling 85 per cent of all new cars, according to William Betts, a spokesman of the Association of American Railroads. But then the railway industry hit back with the development of the "rack" railroad car which could carry 12large cars or 15 "compacts" at a rate below road haulage tariffs. _ Today trains handle about half of the inter-city haulage of new cars, with transporters for the final delivery to showrooms. Most of the heavy raw materials and basic products needing to move long distances, such as ores or car components, go by train because of its cheap cost-per-ton-mile basis. In Mr Toles' words, "where the need is for a steady flow rather than timeliness".
For finished goods and shipments smaller than a railroad car load — much larger in capacity than British Rail wagons — lorry transits are the norm. American road hauliers are thankful that they have never been saddled with such unprofitable operations as passenger hauling.
Licensing set-up The financial performance of most trucking firms has been good since the 1970 recession. A key factor is the extent of the franchises let by the Interstate Commerce Commission in a system analogous to the carriers' licensing set-up in Britain prior to the 1968 Transport Act and which resembles much current legislation in Europe.
One leading company, Roadway Express, Inc, based in Akron, Ohio, has shown a growth in parallel with the industry. Its revenue in its first year (1931) was $200,000. This rose to $5.5m in 1946 and 323.1m in 1950. "Last year Roadway pulled in $ 373m along its 49,300 miles of routes, connecting more than 19,000 communities in 31 states."
Roadway's area lies mostly east of the Mississippi River and includes the congested Northeast Corridor, where railroads have had their worst fortunes. Mr Toles says the company's area contains about 85 per cent of the nation's value-added manufacturers, which is presumably another way of referring to consumer goods. The "added value" from processing or manufacture in proprietary foodstuffs or light electrical products is wholly disproportionate compared with the change in value of the heavy ingredients of mild steel, for example.
A threat to the development of road haulage in the US, and possibly nearer home, is the impending fuel shortage which will inflate fuel prices and operating costs.
Recently many American road haulage firms have been unable to obtain year-long contracts for guaranteed deliveries from the oil companies. Truckers have estimated that they would need 20 per cent more fuel this year than last, but so far deliveries have been 20 per cent below last year's levels.
Back to rail?
William D. Baker, president of Cooper-Jarrett, a New Jersey road carrier, has said: "I feel confident that the Governmentwill recognize the importance of motor carriers to the economy. But if a real shortage occurs, we'll just have to cut back schedules." There are fears that if the tight fuel situation persists there will be pressures to concentrate available fuel to railways because of their more efficient fuel usage.
Spokesmen for the trucking industry say the trucks v trains comparison should not be on the ton-mile cost basis. The elimination of trucks will leave a "service gap". Moreover, while a tractor and trailer may cost $25,000 compared with $16.000 for a boxcar, the tractor-trailer will do three or four times more work in a year because of less idle time.
Mr ° Kiley, of the American Trucking Associations, has said that trucking companies may be forced to "scrounge around" for fuel. "And the problem with these new diesel engines with their anti-pollution devices is that they won't run on low quality fuel. There is a lot of concern about what could happen to fuel supply and the cost."
The Cummins Engine Company has told its customers that they may nse lower-grade fuel, at least on a temporary basis.
American road hauliers are under pressure to meet anti-pollution and noise standards. The problem of determining acceptable and practicable noise levels is being worked out by the Environmental Protection Agency. Legislation mandating noise control for vehicles was passed in 1972.
Bigger Trucks., ..
Faced with higher operating costs road haulage operators in all countries look to productivity. The truckers favour larger vehicles but the motoring lobby opposes this.
Mr Toles says the industry has struggled in vain for national legislation to legalize double-trailers in all states, at least on Interstate highways. They ttre already legal in most states in Western Europe and on the New York Thruway. The double-bottoms would be some 10ft longer than conventional trucks, which are about 55ft.
Other road haulage spokesmen think the industry should look to new rate schedules rather than to greater productivity.
These issues sound very familiar on this side of the Atlantic.