UP GO THE RAILWAY RATES!
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The Merchant and Trader Made to Pay Increased Freight Charges The Prospect of Fewer Concessions and Abatements. More " Border-line " Traffic for the Roads.
17HERE has been a tendency in some quarters to envisage an intensive competition against road transport, once the railway companies have put their house in order, completed their grouping arrangements and adjusted their charging schedules in accordance with the requirements of the Railways Act of 1921.
Recent developments, however, afford little justification for the opinion. In fact, the implications from the recent decisions of the Railway Rates Tribunal are all in the other direction and, obviously, portend a period of increased rates for the conveyance of merchandise. In accordance with the provisions of the Act mentioned, the companies submitted revised schedules which, in their estimation, would secure the statutory reward to invested capital. Those schedules, subject to minor adjustments, have now been provisionally accepted by the Tribunal. In the opinion of the traders who opposed the level of charges embodied therein, these schedules will increase the rates on an average to over 70 per cent, over the pre-war basis.
These schedules will operate on a cast-iron basis, Inasmuch as the Act allows of no variation upwards or downwards, save by way of. an exceptional rate. In the discussions before the Tribunal the representatives of the railway companies recognized the possibility of some diversion of border-line traffics to the road and stated that an allowance had been made with that factor before them.
Further Advances Foreshadowed.
The announcement just issued of an intention to increase rates from plus 50 per cent, to plus 60 per cent, over pre-war rates is an indicator in the same direction. This increase as from February 1st is but a precursor of the further advance rendered inevitable on and from the "appointed day," which it is understood will be fixed for January 1st 1928. There is, however, another factor in the situation which is perhaps escaping the attention of thoSe in
terested in road haulage, whether as users or as carriers, and the position Is-worthy of more than a passing notice. We refer to the question of carriers' risk.
It is undeniable that in this aspect of transport the road hardier has a clear advantage over his competitor.
There is not the same necessity to provide the same extravagant packing as if the goods are to be forwarded by rail, and the packing may be totally eliminated in many cases without any Jeopardy to the merchandise. Further, when damage does occur, it is easier to, bring It home to the responsible person and thus to exercise oversight with a view to preventing its recurrence. On the 'railways such 'oversight is negligible, as the traffic passes through so many hands that it is well-nigh impossible to locate the offending party, and, as a consequence, there is no incentive to carefulness.
Railway companies have felt the pressure of this disadvantage ha the past, and throughout the long period from their inauguration have exercised them selves to secure relief from the liability for carriage whenever possible. They have endeavoured to ease the position by the issue of notices and conditions; by the adoption of the special contract, and especially by the concession of owner's risk rates. It is these rates which represent the next stage in the inquiry before the Rates Tribunal.
Under the provisions of the Railways Act of 1921 (Sect. 461 it is provided :— • "When settling a schedule of charges . . . . the Rates Tribunal shall determine what reductions 030 shall be made from the standard charges where damageable merchandise is carried by railway under owner's risk conditions, and such reductions shall be shown or indicated in the schedules in such manner as the tribunal prescribe.
"Where an exceptional rate is in operation and the conditions applicable to that rate are the company's risk conditions, or, as the case may be, the owner's risk conditions, and the difference in the company's liability under the two sets of conditions in respect of the merchandise in question is not insignificant, the company shall on request in writing by a trader quote a corresponding rate under the other conditions. . . . The difference between an ordinary rate and an owner's risk rate shall be such as in the opinion of the rates tribunal is fairly equivalent to the amount by which the risk of the company in the case of the merchandise in question differs under the two sets of conditions."
The Road Haulier's Advantage over the Railway.
It might be said, in passing, that although road hauliers have their difficulties, they are, fortunately, not presented with such conundrums as Parliament, In its wisdom, has presented to the railway companies, to the traders and to the tribunal by the provisions of this section. Road hauliers may congratulate themselves that they can, with simplicity and relative cheapness, safeguard themselves against the contingent hazards of their trade without being asked to draw up an elaborate schedule of the relative degree of risk in respect of any and every commodity. This is what the railway companies have to do, and each and every proposal is subject to the opposition of the traders on the grounds of inadequacy, or unfairness, or omission. The railway companies have tabled their proposals before the tribunal and the traders have been invited to lodge their objections and, from what can be gathered, there is little basis for agreement and the Tribunal is faced with the prospect of giving a decision which is likely to satisfy no one. Indeed, it is difficult to visualize, with such a heterogeneous mass of differing commodities, packed in all degrees of efficiency and all manner of differing ways, how it is possible to arrive at other than a rule-of-thumb determination.
The interest to road hauliers arises from the fact that in the railway proposals there is foreshadowed a very considerable reduction in the number of articles for which abatements are to be made for risk, and also marked reductions in the percentages to be allowed off the company's risk rate.
Abatements under Owner's Risk Conditions.
At the present time vast volumes of traffic are carried under owner's risk conditions, not only in respect of exceptional rates but also In regard to the ordinary class rates. From the latter it is usual to deduct substantial amounts in lieu of risk. This list is known as the X.Y.Z. scale and the abatements thereunder represent 10 per cent., 15 per cent. and 20 per cent. respectively. However, under the schedules which the companies have presented to the tribunal for approval, this scale is to be discontinued, together with the list of articles to which it applied. In substitution therefor there is a new list containing only a small proportion of the articles at present enjoying the concession and omitting entirely some of the most important and substantial traffics.
This new scale is more elaborate in design, as befits
an attempt to comply with the Parliamentary provision given, and is divided into Classes A, B, C, D, E, F. G. with percentages ranging from 2/r per cent to 121 per cent., although it has to be recognized that nearly all the staple traffics included fall within A, B and C only, with percentages of 2i per cent., 3.1 per cent and 5 per cent. It cannot be said that these are particularly generous as compared with the existing scale, although it must be admitted that they probably fall nearer to the actual risk for "damage," which is the term used in the Act.
There is an anomaly, however, in that the owner's risk contract is designed and has been agreed by Ole tribunal to cover other elements besides "smashability," such as undue delay, pilferage and other general losses.
If the proposals of the companies are accepted as tabled or with only slight modifications, there can only be one result, and that will be to face up the prospective rates still higher and transfer further tracts of traffic from the border line to definite road transport. We shall watch this aspect of the matter with interest and see whether the traders are sufficiently powerful to secure the retention of the exceptionally favourable rates existent at present. But, whatever the outcome, there is no indication that the companies will lie in a position to modify their rates to such an extent as to prejudice road interests for a very considerable time.