The New Zealand Railways Magazine, Volume 3, Issue 7 (November 1, 1928)
Railways in Modern Transport
A railway working to capacity can carry produce for a penny or two per ton-mile. The motor lorry charges a shilling or two for the same service—twelve or fifteen times as much. The result is that while the railway has an economic radius of hundreds of miles, the motor lorry is limited to tens of miles. I feel sure that it is in bridging this economic gap the solution of the transport problem of the Empire is to be sought.
Mr. R. H. Brackenbury (Empire Marketing Board).
I purpose in this concluding article on “Railways in Modern Transport” to review briefly the methods which have been adopted for dealing with the new problems presented by the introduction of the motor as a live factor in modern transport, and shall confine my observations more particularly to the United States, Germany, Switzerland and South Australia.
In the United States legislative powers exist in the majority of cases for the regulation of road motor traffic, and permission to operate such vehicles is not given unless the proposed service is a public convenience and necessity. At the present time 64 railway companies are operating motor coaches for the carriage of passengers (using for this purpose 1,050 vehicles), and 45 railways are operating motor lorries for goods traffic (using 4,902 vehicles). The trend of legislation in the United States may be gauged from the following decision of the Interstate Commerce Commission:—
Railroads have permanent road beds and trackage which require an outlay of millions of dollars. This railway property yields large revenue to the people of the State, which the average bus line (incorporated for a comparatively small sum) does not do. The railroad, therefore, is a much greater financial responsibility. This is a matter of substantial public interest, particularly in cases of accident. It is the established policy of the law (of the State covering this decision) that a public utility be allowed to earn a fair return on its investments. It is, therefore, not only unjust, but poor economy to grant, to a much less responsible utility company, the right to compete for the business of carrying passengers by paralleling its line unless it is evident that the necessary service cannot be furnished by existing railway services. In a recent application before the Commission the appellants offered to provide whatever increase in accommodations and service that was deemed essential to meet the public convenience and necessity, and it is but consonant with our law regulating public utilities that they be given the opportunity to do so. It is argued, on the other hand, that appellants cannot give the necessary service except at a large loss. Such argument is beside the question involved in the proceedings before the Commision in this case. Appellants have stated that they are willing and able to give such service. However, it appears clear that the Commission is not justified in granting a certificate of convenience and necessity to a competing line until the utility in the field has had an opportunity to demonstrate the truth of its statement, and to give the required service. (The italics are mine.)
The above decision of one of the most important tribunals in the United States, by discouraging as it does the duplication of a transport service which is adequate to meet a given set of circumstances, should, it seems to me, be interpreted not so much a victory for the particular railroad concerned, but a victory for common sense and sound economics.
Conditions in Germany.
Let me turn now to the German aspect of this interesting problem.
A commission to study the road and rail problem and recommend a working agreement between the railway and existing road services was set up in page 29 Germany in 1923, and all service vehicle owners were merged into a common organisation which was to operate services throughout the whole of the country. Under the terms of the contract entered into, services operated by the amalgamated undertakings were originally to cover :—
1. The transport of goods in congested traffic areas and also short hauls in so far as this could be done more economically by road than by rail.
2. The transport of goods to railway stations and house to house deliveries.
3. The performance of such other tasks as could be assigned by the German Railway Company.
As originally constituted, this organisation did not entirely meet with the success which had been anticipated. The German Railway Company, therefore, instituted a further investigation of the entire problem employing for the purpose of the inquiry specialists in road and rail traffic. The findings of the second Commission reiterated the necessity for the German Railway Company to participate in the road transport industry and in conformity with these findings the German Railway Company, in conjunction with the Government, decided to secure the major portion of the stock of two suitable motor transport undertakings thus securing a more active interest in this line of effort than heretofore. The methods by which full co-operation between road and rail is secured, are as follows:—
In regard to deliveries, the road vehicle furnishes the necessary connection between stations and areas not served by the railway, this traffic being operated either on the basis of an independent agreement or in co-operation with railway transport on the basis of a uniform delivery contract. So far as parallel and cross country transport is concerned, the road vehicle is employed as an independent means of transport between different places having railway connections. In this latter case the agreements are, in general, not subject to the provision applying to rail transport.
In cases where rail transport is in process of substitution by road transport, the railway uses motor vehicles for its own auxiliary operations for carrying out delivery agreements in districts where the said rail connection exists. In such cases the closing down of the railway line or the taking over of individual operators becomes possible. Moreover, three methods of co-operation of what is termed “neutral” traffic also receive consideration in Germany. This “neutral” traffic is that which employs motor transport for the carriage of, say, building materials, employees’ excursions, etc., in districts far remote from the railway system. In contradistinction to the situation in most other countries, the delivery to and from railway stations in Germany is mainly carried out by the traders whose activity as solicitors of traffic, as well as their importance in the economic life of the country, makes it necessary to include them in the Company if it is to do this work to the greatest advantage.
One of the difficulties which Germany has to encounter is the lack of organisation among road transport operators and the inexperience and want of business acumen which causes them to accept traffic at cut rates which cannot be otherwise remunerative. The continued existence of these units is the greatest weakness of the road transport industry as a whole.
In July, 1926, the State Railway of Switzerland formed a company with a capital of 1,000,000 page 30 francs for the purpose of dealing with road and rail co-operation. In addition to the State Railway, 38 other railways are members of the Company and are represented on the executive and the management committee. On this executive are also representatives of the chief commercial associations, forwarding agents and cartage agents. Since the formation of this Company the cartage charges at terminals have been reduced by 20 per cent., the reduction being due to the superiority of the organised system now in operation as against the wasteful methods previously in force.
The agreement between the railways and the Company referred to provides that the latter shall not enter into competition for goods or passenger traffic. In July, 1927, the State Railway (and a great number of narrow gauge railways) came to an important agreement on the subject of freight rates. Under this agreement (in specified circumstances) it was agreed to convey all employees and ordinary goods traffic at a rate similar to that ruling for carriage by road. The conditions are as follows:—
(1) That the trader states that without the grant of these rates it would be more economical for him to despatch by road vehicle and that he is in a position to do this.
(2) That the rate must be such as will cover all primary costs and leave normal profit for the railway.
(3) That the trader must give to the railways every year a certain minimum quantity of traffic.
(4) That the trader either entirely or within certain specified limits, abandons all road transport in favour of the railways.
The Company guarantees the conditions of transport and contracts with the traders, but by arrangement is subject to the rule “There shall be no undue Preference.”
In common with other railway systems through—
out the world, that of South Australia has been confronted with serious road competition from independent operators, many of whom were working on a quite unsound basis. In such circumstances it was a difficult matter to deal effectively with the situation. The Railway authorities, however, faced the position boldly, deciding, in February, 1925, to inaugurate a road service. A fleet of vehicles, both passenger and goods, was mobilised for service and, in 1927, 46 passenger vehicles, 25 goods vehicles and 11 parcel delivery trucks were in commission on various routes.
In 1927, however, the competition became so serious that Parliament passed a Motor Transport Act which vested the control of all motor traffic outside the Metropolitan area in a Board of three, of which the Railway Commissioner was chairman. In terms of this legislation the Railway Department page 31 ceased to operate motor vehicles (other than in connection with traffic to and from the railway) within the Metropolitan area. Outside the Metropolitan area the Railway Department is not permitted to operate a motor service unless it can be shown that no other road operator is agreeable to carry passengers or goods on any specified route at rates or fares equal to, or less than, those proposed to be charged by the Railways. The 1927 Act further provides that no person can, outside the Metropolitan area, drive a motor vehicle for the carriage of passengers and goods unless such vehicle is licensed by the Board, which fixes the route or routes that may be traversed, and also imposes such conditions as the Board thinks proper regarding the rates to be charged and the timetables to be observed.
The results of the working of this Act in South Australia are said to be quite satisfactory, which would indicate that it is possible to co-ordinate road and rail traffic with results beneficial to the community at large.
Co-operation and Co-operation the Solution.
[The above series of articles on “Railways in Modern Transport” formed the substance of a paper read by Mr. Wyles before a recent meeting of the Technological Branch of the Wellington Philosophical Society.—Ed., N.Z.R.M.]
“From the national point of view the conveyance of long-distance traffic by road is wrong. It must be a mistake for the heavy traffic to be pushed on to the roads, which are already overcrowded, and at the same time, for the railways to be left, possibly, without the full amount of traffic which they can work. Even to the motor industry I think it a most serious matter. If there is anything which can make travel unpleasant to the private owner of a car it is a flood of heavy, long vehicles on the road.
—Mr. F. C. A. Coventry, O.B.E., Superintendent of Road Transport, Great Western Railways, England.page break