INCREASING EFFICIENCY IN INLAND TRANSPORT
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IN this article the ways and means of increasing
efficiency in inland transport will be discussed. The wide area covered by this subject prevents a detailed examination and this feature therefore deals with broad outlines based on the position in the Common Market.
From the scanty statistics available on transport in Europe it is evident that road haulage is on the increase, both absolutely and relatively compared with the railways and inland waterways. The Conference of European Ministers of Transport has drawn up a forecast for the six Common Market countries on the development of goods transport for 1965 and 1970. Table 1 summarizes these forecasts.
The future common transport policy has not yet been laid down, but when it has it may well have a considerable influence on the above forecasts. If, for instance, this policy should favour the railways at the expense of road transport or cause all infrastructure costs to be charged to each of the forms of transport, big changes may result.
Anyway, it is clear that there is a hard time ahead in the Common Market for transport in general and road transport in particular. However, the wider market will undoubtedly mean greater average distances between producer and consumer and this situation is further intensified by a tendency towards specialization and concentration on the production side. It might be a good idea to describe briefly the structure of the transport industry in Western Europe in order to give a good overall idea of the position.
Railways in each country are run on the lines of a large national concern under direct or indirect government management, apart from a few small private railway companies in Germany and Italy which may be ignored. These national railway companies do not, in fact, compete with each other; they have been collaborating closely in some fields for many years (exploitation, administration, research).
Road transport comprises a large number of very small carriers (often with only one or two vehicles) and few large firms. Both nationally and internationally there is lively competition amongst road carriers and between them and the railways. The number and type of vehicles to be used (lorries, trailers, semi-trailers) is controlled by the government concerned, the intention being to counteract overcapacity, to protect the railways and to hold off foreign competition. In B38
addition to commercial road transport a large number of mar facturers run their own fleets which generally comprise ox a.small number of vehicles. These fleets are not subject to A capacity control.
If we now take a look at the efficiency aspects of transpi we must first establish the fact that the expression " tramp service" may be interpreted in both a narrow and a broad sen The narrow interpretation is just the movement of the lad vehicle or vessel (hereinafter transport) and, in the broad sen is extended to include collecting the goods from store, transi to the vehicle or vessel, loading, unloading and transfer to 1 place of storage and setting them down there (hereinaft loading, unloading, etc.). We shall omit the still broac interpretation: from place of production to final consumer.
Increase in transport efficiency can thus occur in two qu different fields, in transport and in loading, unloading, etc. I us examine transport first.
A means of transport is in itself worthless without the rot over which it travels. The route is not only the road over whil or by means of which, the vehicle or vessel moves, but genera also the area it occupies during loading and unloading.
The main difference now presents itself, namely that on I railways both these complementary means of production in the hands of one organization while in the other inoi of transport the control of the means of transport and I route is divided; the latter usually being in the hands of I authorities. Moreover, the routes are often simultaneously ui for goods transport and transport of persons on business a pleasure.
Transport efficiency can be increased by: firstly, using big and/or faster means of transport, thus reducing the cost pr of the unit to be transported and/or, giving higher value I service rendered; secondly, better use of the means of tra port: and last, more efficient organization of the movement vehicles and vessels over the routes.
The use of a better means of transport is a task for 1 carrier, who can be supported by research carried out by mat facturers of the means of transport. With road transport many small carriers are generally in a position to judge whet] they should use a bigger or faster vehicle, but in most ca they are not in a position to make such investments, let alt conduct any research.
The automobile industry consists, however, of a few firms which have plenty of time and money available research so that they can manufacture bigger, faster a cheaper vehicles.
In contrast, the situation existing on the railways is .qt different. In the first place these are all large concerns wh are themselves in a position to carry out the necessary resew work, and in the second place their research is collated at " Office de Recherches et d'Essais " of the International Um of Railways. This collation of material is possible becal the railways do not compete with each other. The activil of the O.R.E. relieve the builders of rolling stock of a gr deal of their research work. As a result of research, effc improve wagons and pulling power have definitely been cessful.
ncreasing the carrying capacity utilization rate and the ventage of kilometres travelled under toad means increased ciency without high costs. The new Benelux road transt tariff, for instance, is based on an 80 per cent mean utilizarate of the carrying capacity over the kilometres travelled ler load, and the percentage of these kilometres is only per cent. This last figure means that in nearly all cases re is no return load, nor is there one to be found.
lie railways can also co-ordinate supply and demand, but road transport this is difficult. The institution of " Auto'e ", or other meeting points, may be regarded as a significant iplement to the activities of forwarding agents.
We now come to better organization of the utilization of rtes. Only the railways are in a position to do this since y are masters of their own route. Passenger and goods ns together use these same routes, it is true, but that has . prevented the railways from raising their capacity by tighter etables and a better system of signals. Road transport is iggling with big problems along these lines because it has share the roads with business and pleasure drivers, and road .elopment never increases in equilibrium with demand. Road nsport can have very little influence on efficient utilization roads. We will regard the construction of new roads as actor which cannot be influenced by road transport interests. 7inal1y, it should be pointed out that the dimensions of tides and vessels are subjected to various restrictions: curve
and various gauges on the railways, lock dimensions on waterways and the prescribed maximum dimensions for nmerciaI vehicles, maximum axle and wheel loads and freeird regulations are also involved. Carriers can do little or king to alter these circumstances.
t may now be concluded that increasing the efficiency of items under (a), (b) and (c) is possible for the railways. Teasing efficiency for (a) and (c) is difficult for inland shipg; (b) is possible through freight exchanges. It is possible road transport to raise vehicle efficiency so long as the ulations on maximum dimensions and weights are not ringed. Whereas road transport can have no influence on ization of the route, utilization of vehicles can still be reased considerably.
[he differences in the structure of the transport branches and tariff structures also play a part in loading, unloading, etc. line should be drawn between wagon-load transport and cc goods transport on the railways. With wagon-load transrt the shipper or receiver arranges for the loading and Loading of the wagons which are made available for a certain .iod by the railways.
[his period is taken into account in the freight charges made the railways. It is possible to reduce these by quicker loadand unloading, shipper and receiver having an incentive to rease their efficiency. When the railways tariff system is 11 that shortening the loading and unloading time does not ke any difference to the freight charges, then the incentive )nly iii savings on the shipper's or consignee's internal trans.. it. Continental railway tariffs do not " reward " a loading 1 unloading time shorter than that fixed; on the other hand, contracts such as are made in the Netherlands, loading and loading times can be .used in the negotiations. Piece goods nsported by rail are sorted, loaded and unloaded by the Tier. There is every opportunity for raising efficiency since nsport services in the wide sense of the word are carried t by one concern. This conclusion applies only if the railys piece goods sheds are regarded as the place of storage the broad sense of transport. If delivery is-also considered, al the conclusion is only correct when this is also the railys' responsibility. Road transport can be broken down into scheduled, unscheduled and private (i.e., transport for own account) transport, which work in roughly the same position as the corresponding inland shipping categories.
It may be concluded that: where there is no close association between user and carrier (road transport—inland navigation); because of the small incentive to increased efficiency as a result of the tariff system (railways—road transport—inland navigation); where the link-up between demand and supply of return capacity leaves much to be desired (road transport); increased efficiency in inland transport is hard to attain. Only where there is close unity between carriers and users, where tariffs offer incentives and where the many links in the transport chains are adjusted to each other, is a higher degree of efficiency possible.
Increased efficiency in transport can be obtained by better utilization of vehicles and vessels, by speedier loading and unloading methods and better co-ordination of preand posttransport handling. For this, investments in equipment will have to be made. When there is little contact between carriers and users, which is often the case, the result is that the carriers usually have little inducement to make these investments. It may be possible to get the users or consignees to make them if this action is rewarded by tariff (i.e., rates) reductions which are at least as great as the costs arising from the use of equipment less the savings in their own firms. The tariff systems of the carriers should cover these possibilities.
The comments of a manager of a stevedoring company in a western European sea port illustrate this "Big shippers are not moved by their stevedores' or shipping agents' attempts to standardize their products and packaging just for the sake of pleasing the stevedores and shipping agents". No, of course not. You have to give and take. The users' standpoint is to approve when they have to pay the same freight charges for a consignment delivered and to be transported on pallets (e.g., 80 parcels on one pallet) as for a non-palletized consignment. And also when lorries have to wait such a long time when delivering and collecting the cargo, the savings on load-ng and unloading time for the lorry by using palletized loads disappear.
A significant increase in transport efficiency, especially over distances that are not too great, is obtained by using pallets. It is apparent, however, that the maximum road vehicle dimensions are such that a lot of space is wasted by using standard pallets*. Small alterations to vehicle dimensions (the width in particular) can lead to a considerable increase in road transport efficiency. It should be mentioned that of the two Continental standard pallet sizes, viz., 80 by 120 cm and 100 by 120 cm, the first one is favoured by the railways by instituting nallet pools, for instance. However, both sizes make fair use of the carrying surface of railway wagons. In road transport no good degree of utilization can be attained with either of these sizes with the maximum vehicle dimensions as they-stand at present. With the 100 by 120 cm pallets it is bad, with the 80 by 120 cm it is very bad. This means, if the maximum dimensions are not adapted to those of the pallets, discriminatory treatment of road transport in favour of the railways and also—since the possibilities of exchanging the 100 by 120 cm pallets are very restricted or non-existent on the railways—a restriction of the user's freedom of choice.
In order not to emphasize the negative side in this article we shall elaborate on the recommendation to adjust the tariffs; that of adapting vehicle dimensions to pallet sizes has already been expounded elsewhere and can be referred to.
Let us confine ourselves to road transnort for the rest of this article and then we shall see that there are fixed tariffs for Germany, France and intra-Benelux transport, and these tariffs do not in themselves encourage efficiency or, if so, only slightly. In the programme of activities for the Common Market transport policy the proposal has been put forward to make tariff reductions possible by means of contracts on the transport which involve a lower cost price than the average on which the general tariffs are based. Whether and how this is to be carried out in practice is an open question.
The new Benelux road transport tariff includes in article three very vaguely described possibilities for inducement to raise efficiency; so far it is not known how this instruction is to be interpreted.
These loophole clauses are, however, not clear; the procedure to be followed is sometimes involved and time-consuming. All in all these instructions can hardly qualify as inducements and they are not intended as such..
There is an unmistakable tendency in the Common Market to a further introduction of general transport tariffs. It is perhaps inevitable that such tariffs are based on average cost prices, which in turn are based on mean utilization percentages. Practical methods of calculation will have to be designed in order to establish exceptions to these "basic tariffs ".
We have tried to draw up such methods for the most frequently occurring exceptions in road transport which result in increased efficiency, namely transport of unit loads (particularly palletized transport) and return freight. These are based on the formula used for the Benelux road transport tariff. This does not mean that the importance of these methods is restricted to the Benelux, since the Benelux tariff is generally regarded as a test case for the Common Market.
The waiting period envisaged in the tariff can be shortened if the load is in units and is loaded and unloaded with mechanical equipment. Although, in practice, bigger savings can be obtained, we have for safety's sake based them on two hours for a 20-ton load and proportionately less for smaller loads. To give you an example, we have made the following calculation based on the data in article 10 of Appendix I of the Benelux road transport tariff:
where A=distance to be paid for, B=distance utilization (tariff), C=actual laden distance, D=actual distance utiliza rate.
In other words, on a 200-km single journey with full re load over the same distance, the tariff distance for each si journey is 116 km. Reductions on the general tariff can easily be calculated in this way for different distances and r of utilization.
We think we have developed simple and generally applic methods of calculation in the systems described. We sh■ emphasize that we are concerned only with the method; absolute extent of the various factors is therefore revisabI
These two tariff measures can be a significant inducer for the carrier to increase his efficiency and, as a result, t( in a stronger competitive position. Using these two met' they can easily work out reductions and thence req exemption from tariff regulations. It would be advisablo use a shorter procedure to bring about the exemption w is calculated in this way and based only on one or hod these two arguments.
Therefore we may conclude that increasing efficiency in tr port is difficult as a result of the production structure inland transport. The reason for this is the frequent of close contact between carrier and user. This difficult accentuated by some factors which might increase efficii not being influenced by carrier or user (inter alia, traffic ja
It is possible by means of better contact between u middlemen, carriers, vehicle manufacturers and shipbuilc in other words—co-ordination of the different links in transport chains.
It is possible if carriers' tariff structures are such that are an incentive for efficiency measures which would pi profitable to both carrier and user.
And, finally, it is possible by adapting the maximum dir sions of lorries, trailers and semi-trailers to pallet sizes. most important adjustment is a small increase in the perm width.