'Freight-forwarding link costly for Railways

Press, 17 September 1980, Page 10

'Freight-forwarding link costly for Railways

PA ‘ Wellington The Railways Department lost an estimated $2 2.2 M in 1979-80 because of its link with the freight-forwarding industry, it has been alleged at a hearing of the Commission . of Inquiry into the industry.

The estimate was contained in the main submissions of the National Union of Railwaymen to the commission,- beginning its third week of hearings in Wellington. The union was unable to provide exact figures, be-, cause many have remained confidential, but applied detailed guesswork to come up with an over-all loss for the department.

The submission suggested that if the Railways had . handled all goods traffic in its own sheds, it would have earned $71.5M. From this , could be deducted 538.5 M earned from bulk traffic, representing a loss in possible earnings of S33M.

Against this, the Railways had saved only 810.8 M .through savings in the costs of goods handling, .and claims for damage, which would be met by the forwarders. This gave the Railways an over-all net loss of $22.2M on its link with the forwarders.

. Earlier in its submissions, the union said that

the Railways had actively promoted the growth of big road-transport competitors, which were now a powerful political force within the transport industry. The Railways could have entered the freight-forwarding field itself.

Existing rail goods terminals could have been, used until priority was given to new buildings. In any event, many of the freight-forwarding companies had worked mainly from buildings provided for them by the Railways. "We can only assume that the ‘1975 Committee of Inquiry’ was referring to the . second career, which the freight-forwar-ders often provide for retired members of the Railways management,” the union said. ‘The most notable has been the move by Mr I. Thomas from General Manager of Railways to New Zealand resident director ... of Thomas Nationwide Transport, Ltd, the Australian patent company of Alltrans, Ltd. There are many other such cases.” ■ Freight-forwarders had chosen the cream of traffic and left the Railways with tlie bulky, fragile, and less profitable loads. The Railways was also left with the responsibility of providing goods and passenger services to the more remote and less densely populated areas of New Zealand.

The result was that the Railways’ running losses were increased. . The union said that the introduction of private freight-forwarding companies to the rail shunting and goods yards had adversely affected the morale of railwaymen. These men often worked in old, run-down sheds, while nearby the freightforwarding companies had modem terminals using sophisticated fork-lifts and cranes.

Forwarders were given priority in waggon supply, space on inter-island ferries; and other benefits. “The freight-forwarders also appear to have little regard for the safety of the shunters who have to work in their sidings, and the crews on trains of waggons loaded by them,” the union’s submission said.; Forwarders frequently overloaded or loaded waggons badly. This could cause derailments. The union said that the Railways itself could provide and promote a door-to-door service in conjunction with private carriers. It could link rail to road transport, using its own road services division and town carriers.

In any event, the union said, rates charged by the Railways for services provided to freight-forwarders should be set to at least cover the full cost of those services, or even to return a profit.