RAIL OR ROAD

Evening Post, Volume CXVIII, Issue 33, 8 August 1934, Page 11

RAIL OR ROAD

TRANSPORT OF GOODS

IMPORTANT DECISION

; APPEAL ALLOWED

Important considerations bearing on the question .of competition between road and rail in the transportation of goods'were dealt with in separate judgments given today by the three memj bers of • the Transport Co-ordination Board on tho appeal of P. A. Griffiths, carrier, of Toko, Taranaki, against a decision of the No. ,5 Licensing Authority refusing him a continuous goods licence to operate on defined routes between the dairy factories at Huinga and Douglas and the freezing works at New Plymouth. The appeal was allowed on a majority decision of the board, the chairman (Sir Stephen Allen) dissenting. . ■ '' ■ , The appellant's charge for carrying produce from the factories was at a flat rate which worked out at 3.5 d per ton mile in tho case of the Douglas factory, ! and 3.80 d per ton mile in the case of the Huinga factory. The comparative figures for rail transport were 4.3d and 4.6 d. respectively. "The essential considerations to be weighed)" said Mr. L. Alderton, "in comparing competing services between rail and road in goods' transportation I are, I think, firstly, the cost of tho ser- ' vices, secondly, expedition in handling, and thirdly, the suitability or otherwise of any form of transport for the particular commodity being handled. In tho matter now before the board tho second and third considerations are not in question, and jthc position resolves into a pure question of cost." It was apparent from the evidence, continued Mr. Alderton, that the appellant was prepared to provide a transportation of produce /from the factories in question at a lower rate than the Railway Department was prepared to offer. The appellant's balance-sheet disclosed the fact that he was making quite a good profit from tho Operation of the service. The Railway/ Department fyas unable to give tho board any definite information as to how its freight figures were arrived at. ' '. DEPARTMENT'S LOSSES. Much had been made of the fact that tho Department carried, manures and lime at very low rates to the farmers, and accordingly the railways were entitled to demand that tho products of tlio farmers in return should bo forwarded by'rail, said Mr. Alderton. Counsel for. the Department, howover, had been unable to give the- boaTd any figures as to'the subsidy, received from tho Department of Agriculture, or to give ton mile rates for the carriage of manures and lime in tho district. Mr. Alderton quoted figures which he said he had ascertained from the Railway Department's statement for 1933 showing the following calculations:—(a) That tho loss on goods traffic amounted to approximately £125,000 per annum; (b) that tho loss on passenger traffic | amounted to approximately £1,600,000 per annum; and (c) that the cost of carriage per ton milo of goods, including all interest charges, amounted to approximately 2.Md. Applying the results lie had obtained to the matter ■lief ore the board, he had to ; be Satisfied that tho increase on tho aVerago haulago cost- of ,2.G4d to 4.3d or 4.6 din the case of dairy produco could bo justified on tho ground that low rates wore provided for the: carriage of lime and manures. Tux. all-round average increase in rates on tho present/ volume of goods carried by the railways to 3.64 d per ton mile, that was, an increase of Id per ton milo, would mean an increase in rovenue (of £1,500,000, which would be sufficient to cover the whole of the loss on the railways at the 'preschit time for both branches of theservice. . . • ; . SHOUT HAULS BY RAIL. "There ,'nro two further aspects which roquiro consideration in this appeal," Mr. Aldorton continued. '' Can it be said that short hauls by rail are the most economical form of goods transportation, bearing in mind that such hauls involve invariably short, road hauls at either or both terminal points?. ■'"- • ■ ■ "I am not convinced at, this stage that hauls up to 50 miles are handled most economically by rail. I am, however, satisfied that competitive developments in transport are inexorable. Th# public is entitled to all the benefits of the march of progress in transportation, and nothing will prevent that consummation. I have said before^ and I still hold the view, that the railways should in many instances adopt the competing methods of transport of which they complain. ;

"This board has before, it particulars of contracts for the carriage of dairy produce in other .parts of New Zealand by the railways at a cost of l.Sd per ton-mile.: It is true.that tho hauls are longer in these instances, and also the significant fact_ emerges that there is coastal shipping in competition; With such anomalies as this existing in railway rates, one is hesitant ip come to the conclusion that road transport which is being ;operated at a lower rate than tho railways over comparatively short hauls should not be permitted to continue in the interests of the farming community and. tho public generally, unless some convincing figures can Tjivbrought fbrward by thp Railway Department to rebut this view." Mr. Alderton said he was of the opinion that the appeal should be allowed,. ■■.-.■■ ■ • \ DIFFERENCE IN BATES. In tlte course of his judginont agreeing with that of Mr. Alderton, Mr. H. B. S. Johnstone said: "I do not propose to discuss the merits or otherwise of tho railway rate beyond saying that railway rates differ to such an extent in j-arious localities as to inclinb me to the belief that such rates arc assessj ed rather on the ground of expediency than on actual calculation of tho economical cost'of hauling. It may be that tho ultimate cost to the ratepayers owing to the extra use of the. roads is higher than appears at first sight to bo the case. If that is so it appears to mo that any such discrepancy can bo better adjusted by means other than the dismissal of this appeal. In viow, therefore, of the position disclosed by the appellant's balance-sheet, indicating that under tho law as it now stands ho can profitably carry goods at a lower rate than the railways, I agree with Mr. Aldertou to the extent, that I am of the opinion that the appeal should be allowed." s ' ' MAINTENANCE OF KOADS.. Sir Stephen Allen said-he regretted that he could not agree with the views of tile majority of the board in the case in question. .', He thought that bulk gopds, to be transported from one point on or near a railway to another point similarly \ placed, should be carried by rail where circumstances permitted, and whore extra handling or time did not become a factor to consider. Tho difference in cost between carriago by rail and carriage by road was small, and although the. balance was in favour of road transport there- should be deducted from that balance a sum representing the cost to the ratepayers for extra maintenance of roade. That cosi, on the basis of. onc-.takd of. a

penny per ton-mile, depended on the weight of the vehicle and of tho goods carried, and iv this case, assuming tho vehicle returned empty, it would amount to at least £70. If the vehicle returned full the cost would be more, and in any case that sum was enough or more to set oft: against the benefits to the dairy company arising from slightly cheapqr carriage by road. Much of the upkeep of the roads would actually fall on tho suppliers 'Of the company themselves, and the preference for road transport on the part of the company was really false economy.

la tho absence of further information, Sir Stephen Allen said he did not think tho rate proposed to be charged by tho railways was excessive,'and for the reasons ho had stated he-thought tho. products of the factories concerned should go by rail. Ho was fortified in his opinion by reason of the,fact that tho No. 5 Authority had made very careful inquiry into tho caso and had prepared a decision, from which the appeal arose, reviewing the ease so thoroughly that it became unnecessary for him to say more than- that, he agreed .with tho conclusions' that the Authority* had arrived at.., Ho considered that the decision was right and should be upheld, but as the majority of tho board was against^ him on that point,, tho result was that the appeal was allowed.