Industrial demand for transport
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• The relative cost of the transport operation is by no means the determining factor in the choice of transport by manufacturing industry, and length of haul is much less important than consignment weight in determining the charges of professional transport operators. These are two of the principal findings of Industrial Demand for Transport, a study of determining factors in choice of transport, of transport facilities and the characteristics of consignments in manufacturing industry, published by the Ministry of Transport on Tuesday (HMSO: price 40s).
A summary report of this study, concentrating on the determination of the choice of transport mode, was published by HMSO in January 1969. This present report deals with the subject in more detail. It also includes analyses of consignment types, of expenditure, charges, and tonnage generated by manufacturing firms, of the incidence of ownership of transport facilities and of the use of rail transport.
The survey, planned in 1965 and carried out in the two following years, is the work of Mr S. L. Edwards, previously a Ministry of Transport statistician but now with the South West Economic Planning Board, and Dr B. T. Bayliss, Rees Jeffreys Reader in Transport Economics at the University of Sussex.
Information was collected about the transport arrangements and traffic despatched during one year by some 720 establishments in manufacturing industry. They were asked to distinguish between the types of transport used for outward despatch of goods — byroad hauliers, road vehicles operated on own account, Post Office, railways, canals and coastal shipping.
Most firms used more than one mode of transport; comparatively few, including those operating their own transport, were heavily committed to a single system. Short-haul traffic (hauls of less than 50 miles) was dominated by road vehicles operated on own-account. On hauls over 100 miles vehicles of this type still accounted for one-sixth of all consignments but public road hauliers carried about twice as many. Traffic consigned by rail over all distances accounted for about 12 per cent of consignments; but this included 28 per cent of some small sizes of consignment (between 22 and 1121b) and about 13 per cent of large consignments (over 7+ tons).
In addition to the information about all the traffic despatched by the selected establishments, more detailed particulars were obtained in respect of a large sample of consignments. These particulars included the costs to the consignors of the modes of carriage selected and a supplementary investigation asked about the costs which would have been incurred if particular individual consignments had been despatched by other means. Of the firms covered, a proportion which varied between one-third and one-half according to the nature of the industry, knew the costs by alternative modes for some or all of the consignments about which they were asked.
The questions put to firms were specific and tied to individual consignments: firms were not asked, for instance, whether they had made a general investigation of the costs and other attractions of the various modes available to them. Moreover, the study showed that in the vast majority of cases in which a firm used its own vehicles and did not know the cost by an alternative mode there were special features relating to the consignment that could well have meant that there was no feasible alternative to the shipper's own vehicles. Traders stressed that, in their general transport requirements, they attached great importance to ready availability and speed of service, and it therefore appeared that they were often thinking of the repercussions of particular aspects of the transport operation on other steps in their chain of production and distribution.
The general findings of the inquiry were reinforced by the results of an experimental use of a form of statistical analysis which tries to disentangle the influence of each of the factors making firms choose one mode of transport rather than another. This showed that on an average view of the consignments covered, the effects of relative prices on the mode of transport selected was small. Although there may have been some categories of consignments which might readily switch from one mode to another, large numbers of consignments were of such a nature—for example on short hauls or requiring special facilities—that the possibility of switching was very limited.
Length of haul had a very important bearing on distribution of traffic between modes of transport. Short-haul traffic was generally carried by vehicles operating on own-account, with the share of professional operators increasing as the hauls lengthened. The analysis suggested however that length of haul only had a comparatively small relevance in the choice between road haulier and rail, with rail slightly favoured for very long hauls: The information collected on charges showed that consignment weight was by far the most important determinant of the charges of professional road hauliers and rail, and that length of haul, although statistically significant, was much less important. The analysis showed that increases in the length of haul resulted in less than proportionate changes in the charge. One of the more significant findings was the great similarity of road and rail charges for a great many of the consignments of less than 10 tons shipped by manufacturing industry.