COMPETITION MET

Hokitika Guardian, 5 September 1930, Page 8

COMPETITION MET

RAILWAY ATTITUDE

SPECIAL RATES PERMITTED

“Owing to the serious inroads our competitors were making in tire trans. port of the higher-rated commodities, it was decided to introduce a system of uniform rating in those localities where it was found that traders wtr? using rail transport for the lowfreight goods and road transport for the higher-rated traffic,” states the General Manager of Railways, Mi H. H. Sterling, in his annual report. “This is a matter of considerable importance, and I wish therefore to take this opportunity of fully stating our position in regard thereto.” “ft is becoming increasingly evident that certain persons and companies are prepared to exploit the railway tariff in their own interests in the direction of sending all their .low-rated goods by rail while sending their higher-rated goods by competitive services,’’ adds Mr Sterling. “Inasmuch as it is the “high-rated goods that' enable 'us to maintain the low rates oil the low-rated goods, any defection oif the high-rated traffic lessens bur capacity to maintain the low rates. We have. alread3 T arrived at the stage where it is necessary that we should increase the low rates in order to make up,for our loss on account of the higher-rated traffic and so to restore, in some measure, at least, the financial status quo so far as revenue is concerned. Any general increase in the low rates founded on the fact that we are losing revenue through the higher class of traffic being taken away from us must involve a certain amount of inequity to the extent that those persons who remain loyal to the railway, giving us their higher-rated traffic as well ns their low-rated traffic, are involved in the increase on the low-rated traffic. We have therefore endeavoured, as far as possible, to devise means whereby we might protect these people,' and preverit the exploitation of our tariff hy those who wisli to take away their high-rated goods and leave their low-rated goods with us. W' had a rather outstanding case of a company which trades in general merchandise and •farmers’ supplies of al' kinds, including fertilisers. This company entered into an arrangement with a road-carrying Organisation that is in very strong competition with us under which, in consideration o r the carrying company agreeing to purchase goods foir the purpose of tlir road-carrying business from the merchandising company referred to, the latter company agreed to give thr earning company its high-rated, traffic. //

POSITION NOT EQUITABLE.

I “The merchandising company,'however, left their low-rated traffic with us. We could not possibly see thal such a position was in any way equitable. We did our best to persuade the company to see the unfairness of the position, but we were unsuccessful. The company took the stand that we had to met competi. tion. We felt that we could not allow the matter to rest at that point, and we were prepared to adopt the companys competitive standard, but we insisted that that competitive standard should operate throughoul the whole field of the company’s traffic, and not only over that portion which it suited them to send by our competitor. We therefore made a regulation which provided that al goods between the stations affected should be charged at the competitive rate. This, of course, covered the lowrated goods as well .as the highrated goods. So that those person who gave us the whole of their business should not be penalised, we alsc made a regulation that, in the east of those persons who gave us tht, Whole of their business, the classified or local rate( whichever were the cheaper) should apply rather than the uniform rate. The company in question has resorted to various subterfuges of, in my opinion, very doubtful ethical standard in order to circumvent our purpose. On the otliei hand, we have had other companies who have been affected by the regulation I have mentioned, and who have apparently seen the fairness oi our action, and have placed the whole of their traffic with us.

‘The company I have referred to above endeavoured to create a certain amount of agitation among the business community at tlve inception of our action, but they -were quite ■unsuccessful in their effort to place us in a wrong light with the business comnvuuiity. Action on somewhat .similar lines to the foregoing has already been adopted in some of the Australian States, and, I have reason to believe, with quite satisfactory results.

“I think it is very necessary that the unfairness of the form of exploitation of the railway tariff that is described above should be brought out clearly, and that action to circumvent subterfuges that may be re. sorted to to enable such exploitation to be carried on is essential.

UNIFORM R.VTES. “The question of further steps to be taken to effectively deal with the situation is now under consideration. “These uniform rates have been adopted in the following a,reas:— Auckland and Newmarket to stations Otahuliiu-Te Awarautu-Cambridge inclusive} Christchurch to Kaikoura, HaWiOrden, East Oxford, Leeston,

Rakaia and Ashburton; Timaru to Albury or Gricklewood and to Winscombe, Fairlie or Eversley. , “The uniform rates introduced represent; a considerable reduction in our existing rates ..for ,goods of o’usse.s A, B: and 0, and 'with a few exceptions, traders who were using road transport for their higher-rated traffic in the areas above mentioned are now using rail transport for all goods. Investigations -are being carried out in other’ areas ( where competition in similar circumstances is acute, with a view to a further extension of this system of rating,,

“Tn no cases ,jire the uniform rates applied to .loiv-rgted , traffic until the person, or head of the firm concerned Ijas ibeen personally interviewed by the 'Commercial, Manager or other suitable offiqer, and the conditions explained.” ...