ROAD HAULAGE

Dominion, Volume 28, Issue 95, 16 January 1935, Page 10

ROAD HAULAGE

Authority’s Recent Decisions WHAT ACT PROVIDES Factor of Inequitable Competition "The federation contends that licensing authorities should not issue licenses to long-distance haulers unless they can prove the need for such services,” said the secretary of the New Zealand Master Carriers’ Federation, Mr. \V. J. Mount joy, yesterday in discussing the recent decisions of the No. 2 Licensing Authority. "The federation has always been opposed to the issue of licenses for road services in districts which are served by rail and sea. The federation’s interpretation of the Act coincides with the decision of the No. 2 Licensing Authority,” he added. Following appears the first text of the statement which accompanied the decisions given by the No. 2 Licensing Authority with respect to application recently made for licenses lor goods services:— "Owing to the importance of the applications,” states the authority, “we have gone to a great amount of trouble in order to obtain all information available, and in doing so we have considered it necessary to adjourn from place to place so that everyone might have the fullest opportunity to present evidence for or against the applications. “It is necessary to refer to the provisions of the Act, .Section 26 of which requires us to have regard to — “(a) The extent to which the proposed service is necessary or desirable in the public interest. "(b) The needs of the districts as a whole in relation to goods transport. Testing Applications. "This provision is clear, and it requires applicants first to satisfy us that a service is necessary or desirable in the public interest. If applicants can succeed in this, then we must proceed to consider certain other matters. among them the financial position of the applicant, existing services for the localities to be served, the general transport requirements of the localities, road conditions, representations of the Government Railways Board ami other transport operators, and the representations of the residents of the localities concerned. If. however, we cannot be satisfied that a proposed service is reasonably necessary in the public interest, then we must refuse a license, and it is not necessary for us to give any further consideration to the application. "This comment, is stressed because there seems to be a feeling that we have a discretion, which is not the ease. We may—and, in fact, do —regret that our only alternative to granting an application as made, or as may be modified to meet, a position as disclosed by the evidence, is to refuse it, and thus to put existing operators off the road. "The legislation was enacted only after a great deal of inquiry, and it is reasonable to assume that .interested parties had the fullest opportunity to make their representations, and that they were aware of the possible effects of the legislation obviously designed to limit road transport to the reasonable needs of the community ami its ability to pay. However, it seems to us that where an operator is put off the road in the common good it is to be regretted that there is not provision to compensate him for the position he was in at the time of the passing of the Act, or, better still, providing for the co-ordination of the road services with the railways and shipping services, wherever practicable. Co-ordination of Services. "We have authority to arrange a co-ordination to road services with each other, but not the power to enforce the co-ordination of road with railway and shipping services, the latter being outside our jurisdiction. “When we commenced to deal with the applications for licenses to conduct long-distance services we were impressed by the lack of evidence'of necessity or desirability in the public interest, and this caused us to defer decision on any application until we had heard evidence relating to all, so that we might be fully seized of all aspects of all the applications under consideration. "However, all that has been shown to us is that certain services cause convenience, and in some cases cheapness; we can find nothing in the legislation which allows us to grant licenses on these grounds alone. "It seems to us that if the legislature desired convenience to be a prime consideration it would have said so, and at the time would have given some guide as to the measure of convenience to be considered. Although there may be quite adequate railways and shipping facilities, a direct service by road between any two towns is a convenience, two services are a greater convenience, and so on. Then one particular road service may be convenient to one trader or group of traders, while another trader or group may find another road service the more convenient. Local Services. “Evidence shows clearly that, all districts under review are served adequately with reasonable speed and cost by railways and/or shipping^services operating in conjunction with local carriers. In no case was it shown that if the road operators ceased I lie district served would be left without adequate transport at reasonable cost. In some cases stress was laid on the expedition with which small parcels can lie delivered at wayside points. “The railways were able to show that, acting in conjunction with local carriers, they also can deliver with expedition ■ “Then we caiinot ignore the road pass >iger services, which can and do deliver parcels at all points on their lines of route. Carriage of Farmers’ Freights. "The increasing extent to which road services arc being used was advanced as demonstrating necessity. As an example, we have been shown that road services are carrying an increasing amount of butter and ehepse.. This is traffic lost by the railways, who carry the farmers’ essential fertilisers at very low rates. As we see it, the cycle of events in this case is that the railways carry as forward loading fertilisers at low rates—lime freesubsidised out of the public purse: then road services secure as back loading, at low rates, the products of

the farm in the form of butter ami cheese. "Tims the public is rightly taxed to assist the farmer in obtaining his essential fertilisers at low rates, but Uien the community-owned railways lose the benefit of carrying the farmers’ products because they are carried as low-rated back-loading by private road operators, rendering forward loading of general goods possible by them at competitive rates, "The result of the taxation of the community in this regard aids the private road operator in competing with the railways. It appears clear, therefore, that such traffic is not only unnecessary but distinctly against the public interest. Railway anil Shipping Services. "Then as to desirability, evidence was given showing that so far as the railways and shipping services are concerned — "(a) They are old-established common carriers, bound to eai’ry all goods offered to them. “(b) They must possess adequate plant to deal with the demands of seasonal traffic. •(e) They must carry all goods at rates which the traffic will bear (fertilisers for the farmers and coal for tiie industrialists, for example, being carried at very low rates). ■(d) They employ labour under conditions regulated by industrial agreements. ' Ami so far as the road services are concerned—“(a) They do not in practice operate as common carriers, and they pick and choose what goods they will carty. "(b) They have not sufficient plan' to handle heavy seasonal traffic. “(c) They carry, with little .xceptic m onb h gh-rated goods “(d) They employ labour at tneir cwn discretion. (We. and some of the operators themselves, are concerned at the working conditions of the em ployees of some of the road services.) Inequitable Competition. "We can come to no otiier conclusion than that the competition of the road services under our consideration fe inequitable, and if allowed to continue will seriously affect the operation of the essential lailways and shipping services. We are impressed by the great increase in the volume of good i carried by road—lncreases which obviously are not accounted for by normal increase in general business. We are of opinion that if this continue.-, a time must soon be reached when in tiie case of the railways, taxpayers will be called upon to meet greater losses, or the whole incidence of freight rales • must be brought under review. It is reasonable to assume that sncli a review would result in -the high rates being reduced and the low rates being increased. This would have tt very harmful effect on the farmers and industrialists of the country, ami be against the public interest "Evidence was given to show the cheapness of the road services, but this evidence did not seem Io take into account that the cheapness benefited primarily certain traders, and was rendered possible by the policy of the road operators to carry only high-rated goods. Competitive Rates. "The prediction regarding the railway rated might be considered as merely an assumption on our part but for the fact that, we have been shown that the railways have adopted special rates to meet certain competition. We believe this policy, is against tiie public interest, as it provides different communities wilh transport at different rates, not on the basis of what the traffic will bear in an economic sense, but what it will bear in a competitive sense.

“In making comments regarding rates we do not overlook Hint we have authority to determine Hie rates Hie road operators shall charge. However, any rates fixed by us must necessarily lie such as at most to leave tiie operator wilh only a reasonable return on bls capital after meeting such charges as are necessary for Hie efficient conduct of his business. We have no authority which will compel operators to purchase sufficient plant to carry peak ■traffic, or to determine the conditions under which labour shall be employed. Highways Maintenance Costs. “We have been asked to accept the view that, the public having spent huge sums of money on road construction, it is unreasonable to restrict the use of these roads provided the u,ser pays. There seems to be room for argument as to whether the user does pay, and in any ease it seems to us that the argument ignores the need to show necessity for a service. A number of county councils have asked us not to grant tm' applications under review because of Hie desire to eliminate unnecessary use of the highways, and so to reduce the cost of maintenance. “If we could find that the community can afford not only the existing essential railways and shipping services, but also another alternative service, then we might further consider the question of granting Hie applications. The evidence submitted does.not, however, show that the people can afford such mi alternative service; but on Hie contrary, county councils have told us that they are having difficulty in finding money for maintenance, and we cannot ignore the heavy railway losses which are borne by the taxpayer.

One-way Cartage. "It was suggested to us that if the applications are not granted people will put on the road their own vehicles and cart their own goods. This seems to overlook the fact that in the majority of cases goods would be carried only one way. which would certainly be uneconomic. Evidence was given that what traders really require is stability in transport at eosts which are the same for all, and it seems to us that some road services have been established simply to enable traders to compete with each other on equal terms. However, even if vehicles should be placed on Hie roads in such circumstances—-and there is" nothing to stop this, even if the present applications are granted—' then this does not affect the underlying principle of the legislation, which does not embrace the ancillary user, and does not affect our responsibility.

“It was further suggested that if the road services are not allowed to operate, then the railways will have a monopoly, and treat the public just as they please. It should be sufficient for us to point out that our decisions are made in the light of evidence submitted at the time, and that if circumstances change, then our decisions may change. If by reason of a quasimonopoly the railways treated the community in a harsh or unreasonable manner —or if any licensed road operator should so act—then we should consider it our duty to take such action as would give the public relief. We must point out that in all the stateinents made there is no evidence of inefficiency of Hie railways. “We regret that there should exist an.v idea that our function is simply to protect the railways. Our duty is to administer tiie Act as we find it,

and that involves giving protection whore it is due. We are just as much interested in protecting licensed road operators and shipping companies as we are in protecting the railways. In this connection we would refer to Section 26 (f) of the Act. which requires us to take into account ‘the transport services of any kind, whether by land or water, already provided in respect of the localities to be served, and in respect of the proposed routes.’

“We desire to place on record our appreciation of the assistance we have received from representatives of local bodies, representatives of the railways ami services, counsel on behalf of a[iplicauts ami objectors, and many private persons who have appeared before us.”