A SLIGHTLY optimistic picture for increases in rates is forecast
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by the Henley Centre and Dr Bernard Warner as the UK economy continues its very slow recovery. But the rises in rates are not expected to be over and above inflation in the next five years.
Henley Centre economist Jon Shepheard said that he expected that rates would increase more in line with the Retail Price Index — at around five per cent this year. In 1984, the centre estimated rates only rose by around two per cent.
From 1985, rates should gradually rise in line with RPI to around nine per cent by the end of the Eighties. There would be no real gain to operators.
Mr Shepheard also said that for each one per cent increase in rates over inflation there was a three per cent fall in the volume of goods carried by roads.
Dr Warner said of road transport: "In volume terms it's a growth industry, but not in revenue terms." Production and cost forecasts indicated that rates w3uld go up but "rather less than the rate of inflation in the next few years," he said.
Dr Warner put forward tentative reasons for the low increases in rates since 1980. He said that from 1973 to 1979 the Price Commission had "legitimised" rates increases, but now the operator had no such excuse to present to his customer.
Over-capacity had switched the negotiating power from operators to customers and the increasing trend for the number of owner-drivers to increase had added to the problem.
Improvements in the productivity of road haulage aided by the greater efficiency of the 3 8-tonne vehicle had allowed rates to be lower, too, he added.