Dairy Companies And Transport Problem

Northern Advocate, 28 May 1940, Page 6

Dairy Companies And Transport Problem

“The fight of the Kaitaia Dairy Company for some user control in transport, is not just for the interest of that particular company, but for the industry as a whole,” said Mr S. W. Smith, in moving the following resolution at today’s conference of the Northland Dairy Association:—

“That this conference views with alarm the decision of the No. 1 Transport Licensing Authority (Mr E. J. Phelan) that dairy companies have no right to bo interested in transport, and note that in doing so he refused to grant a license to operate to the Northland Transport Company, in which the Kaitaia Dairy Company was to have the major control. “In view of the fact that the greatest charge, per lb. of buterfat, is the cartage of same, and that the dairy supplier is the greatest user of transport, apart from his cream, it is essential to the industry that co-operative transport companies be encouraged, and no hindrance placed in their way of obtaining licenses to operate.”, “That the executive of the conference be instructed to forward a petition to all Northland dairy companies for support of the appeal made by the Kaitaia Dairy Company against the adverse decision of the No. 1 Transport Licensing Authority. “Also, that, if necessary, a delegation comprisng Messrs. E. G. Appleton, D. Finlayson, and E. R. Bird, proceed to Wellington to support the appeal lodged by the Kaitaia Company, when it is considered by the Minister of Transport.” Cartage of Own Supplies. It was contended by Mr E. S. Tremaine that the transport authorities were facilitating the granting of transport licenses to dairy companies for the cartage of their own supplies and production. Replying to Mr Tremaine, Mr L. A. Mclntosh said that the Authority’s finding was a complete answer. Mr Tremaine’s company was in a good position, in that it held licenses for its own lorries. The Authority had laid it down, quite definitely, that no further licenses would be granted in Northland. as there were allready sufficient in the area. Mr D. Neale (Albertland) said that dairy suppliers in his district were satisfied with the service and charges of transport operators. •By contributing 10 per cent of the capital, Kaitaia could not expect to have ,a controlling interest. The resolution was carried. Bases of Charges The following remit regarding transport was sponsored by the association executive: “The Government having seen fit to take from the primary producer, as a user of transport, the protection of free competition which he has always enjoyed, it is the duty of the Government in its scheme of price fixation to safeguard, to its utmost ability, the interests of the primary producer by the application of correct scientific principles of costing on which transport charges will be based. “Therefore this association desires the federation executive to bring to the notice of the Minister for Transport that the basis of transport costing must be the application of the principle known to the transport industry as the ‘time and mileage basis,’ in view of the fact that present schedules are based on the existing chaotic condition of the transport industry, and not on any reasonable basis of efficiency, and result in the burdening of the user with unnecessary costs.” In fixing Northland prices the Licensing Authority had been guided largely by statistics supplied by the transport authorities, said Mr R. D. Speer, moving the remit on behalf of the executive. These standards were taken from figures taken from operators. An endeavour had been made to fix cartage rates without knowledge of what costs wei'e, Mr Speer alleged. Commodity Basis Unsound. Factors varied in such an extent

that prices could not be fixed fairly or economically on a commodity basis. The method followed only put a premium upon the inefficient operator. Recent developments in transport activity necessitated direct representation to the Minister for Transport, Mr W. Grounds (Hokianga) believed. New difficulties were arising in the evolution of transport co-ordination and he suggested the approach to the authorities for a review of all factors, should be made in a spirit of reasonableness. A Kaitaia attempt to reconcile the interests of users and carriers had been made with considerable success, but Mr Grounds understood that a license had been refused by the authority. Is Appeal Sincere? In view of that, it might be asked whether the Transport Department, in its oft-repeated appeals for co-

ordination in the industry, sought complete co-operation, or co-oper.ation limited to the carriers, but to the exclusion of the users. In its approach to the problem, the dairy industry should go direct to headquarters and ask for a widening of the basis of co-operation to provide for the participation of the user. The Authority, in refusing a license to the combined dairy companycarriers’ organisation at Kaitaia, had said that to allow co-operative companies to come into existence would be to create a monopoly, said Mr S. W. Smith (Bay of Islands). Evidently, the authority was prepared to allow a monopoly of carriers, but not to include representation ‘of the users. Mr Phelan had also indicated that the time had arrived for a review of the position whereby dairy companies were licensed to cart cream and backload fertilisers, etc. This implied elimination of the tender system, and set prices fixed by the carriers themselves. Kaitaia License Refused. Determination of cost per hour and per mile of operating vehicle was the only feasible way of arriving at transport costs, said Mr L. Mclntosh (Kaitaia).

A few months after the Licensing Authority announced the Northland schedule it. was reduced by 20 per cent in the case of stock carting in Hokianga. This showed, Mr Mclntosh claimed, that the authority, at its Whangarei sitting, had insufficient evidence for the fixing of charges generally. Dairying was the only co-ordinated industry in the Dominion. If it had co-ordinated the marketing and so efficiently, surely it could extend its activities regarding the carting of cream .and backloading in districts with which dairy companies were so familiar. Outlining the proposed transport i organisation sponsored by the Kaitaia Company. Mr Mclntosh said that it was proposed to make operators shareholders. Interest on capital and goodwill would be allowed, together with a wage above award rates, with a 10 per cent bonus on profits. The remainder of the profits would be rebated to users, whether farmers or business people. In refusing to grant a license, Mr Phelan indicated that the authority would not regard in a favourable light any co-operative scheme not confined to carriers themselves. Farmers Biggest Users. A prime reason for rejection was a petition signed by some of the business people, evidently regarded by the Licensing Authority as the public interests of what was essentially a dairying district. Indicative of the importance of the matter to farmers, Mr Mclntosh said that the greatest factor in variation of butterfat payout was distance from the centre and cost of transport. Farmers owned 90 per cent of the freight carried in Northland, and if they were not entitled to have some control in the carrying of this freight and in the co-ordination of transport generally, as Kaitaia desired, tM're was something radically wrong with the Transport Department. Dairy companies received best ser- ' vice from their ov/n trucks, said Mr Elliott, who regarded any suggestion of loss of licenses in a most serious light. He agreed cvith Mr Grounds that representations should be taken further than suggested. s Others Dissuaded. Whangaroa dairymen had in mind co-ordination of transport, but, after the Kaitaia setback, would have to allow the project to lapse for the time being, said Mr R. J. Partoon. Refusal of the license was not regarded as a final answer to Kaitaia’s attempt to co-ordinate the industry, said Mr J. C. Marsh. Already an appeal had been lodged and evidence was being arranged. Through, a co-operative system, bringing the interests-of truck operators and users into closer relationship, dairying would not have cause to fear serious dislocation through possible strikes, etc. He failed to see how the closer cooperation could be achieved if interests of the user and operator were kept as far apart as was apparently desired by the authorities.