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RAIL AND SEA, Auckland Star, Volume LXXVI, Issue 172, 23 July 1945
RAIL AND SEA
WELLINGTON, this day. . Unanimously of the opinion that it is desirable that competition between the railways and coastal shipping should be controlled in the public interest, the Rail and Coastal Shipping Committee, recommends the setting up of an independent judicial authority to promote this— the tribunal to provide a right of appeal to both competitors in respect to all special, as distinct from standard, rates.
The committee was appointed to make inquiries generally regarding competition between the 'railways and coastal shipping, and the desirability in the national interest of controlling that competition and the control methods to be adopted, and its report was released to-day by the Minister of Transport, Mr. O'Brien. Evidence was heard by the committee in various parts of the Dominion. After stating that it could not emphasise too strongly the necessity in the national interest for maintaining both the railways and coastal shipping in a healthy condition, the committee stated that the simplest and most effective way of effecting control in the public interest would be to provide both competitors with a right of appeal to an independent judicial authority in respect of all special, as distinct from standard, rates, the authority to have full power to determine the matter in the light of the national interests.
The committee recommended that the tribunal consist of three members, the chairman to be a Supreme Court judge or an independent person of legal experience, one member to be nominated by the New Zealand Shipowners' Federation and the other to be nominated by the Minister of Railways, all to be appointed by the Minister of Transport. The committee also recommended that the General Manager of Railways and each operator of a ship in the inter-port coastal, trade of the North Island and/or the South Island should deposit with the tribunal schedules* setting out all classes of net rates.
Another recommendation was that any operator of a ship in the coastal trade, or the New Zealand Shipowners' Federation, might appeal to the tribunal in respect of any special or exceptional rate, including local rates, charged by the railways over a route in competition either directly or indirectly with any coastal shipping freight service. legislation Proposed In addition, the recommendations provide for the General Manager of Railways being able to appeal to the tribunal regarding any special or exceptional rate charged by a shipping operator over a route in competition, either directly or indirectly, with any railway freight service. The committee suggested that these recommendations should be embodied in legislation.
"The evidence showed that the development of motor transport has been one of the main causes of the - growing intensity of the competition between the railways aijid coastal shipping, and we consider that future developments in both air and road transport! as well as the older forms, will bring about far-reaching changes in the whole field of transport," states the report.
The committee found there was widespread competition between rail and, shipping services, particularly in the North Auckland peninsula and Bay of Plenty districts, where railways had been opened up in comparatively recent years. It also existed, but less intensively, along the lower eastern and western coasts of the North Island and on the eastern coast of the South Island.
"The competition," states the committee, "appears to be most intensive in districts where road transport has been or is operating, and applies to both merchandise flowing out to the rural areas afid primary products flowing in towards the main centres and markets. It usually takes the form of a struggle for more frequent and efficient service, having regard to the nature of the freight and lower charges, and becomes particularly intense where the volume of freight offering is substantial, and, as in the case, say, of a dairy factory, is spread more uniformly over a given period. Lower Level of Charges "It is welcomed by substantial shippers of goods in the localities affected who enjoy the increased efficiency and lower charges. There is,-therefore, a general desire in the districts concerned that they should be served by as many forms of transport as possible." The committee has found that the general result of the competition on both the railways and shipping services has been to increase the attention paid to the customer and to lower charges. In several instances, the report states, the shipping services could not carry on at the lower level of rates, and either went off the route affected or out of business altogether;
"We consider that no regulation or restrictions should be imposed upon any form of transportation merely for the purpose of benefiting some other form of transportation," continues the report. "The test must be the public interest. In the final analysis the public interest requires a transportation system so administered, . controlled and operated, that service can be furnished at the lowest possible charges, consistent with adequate maintenance and ability to provide modern facilities, and the character of service which the best interests of commerce and industry require. The interests of national and Empire defence are also vital considerations.
"We consider that unregulated competition between the railways and coastal shipping may be quite as much of a public evil as unregulated monopoly because, firstly, it produces an instability of rates that is harmful to the conduct of industry and trade. It has led to, and will continue to cause, unfair discriminations to shippers of freight; it will tend to undermine the financial structure of both railways and shipping services, impair credit, and tend to prevent the industries from keeping equipment and service in line with the best modern standards; and thirdly, the absence of effective regulation will stand in the way of the wider co-ordination between all forms of transport, which we consider desirable."
It was inevitable that future developments of road and air transport would lead to an intensification I of the present competition, between the older forms of transport—shipping and railways—both, of which would lose traffic to the newer forms of transport and engage in a fierce struggle to capture traffic from each other in order to maintain volume.
RAIL AND SEA, Auckland Star, Volume LXXVI, Issue 172, 23 July 1945
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