RAILWAY RATES

Wairarapa Times-Age, 25 July 1939, Page 5

RAILWAY RATES

OBJECTS OF THE RECENT REVISION Effect on Transport Costs POSITION IN WAIRARAPA AREA OUTLINE BY GENERAL MANAGER OF RAII .WAYS

An outline of the revised scales of railway rates and the effect of the revision of transport costs, particularly to Masterton. is given in a communication received by Mr J. Robertson. M.P.. from Mr G. H. Macklcy, General Manager of Railways. Mr Mackley’s letter reads as follows: — "You will be aware that revised scales of railway rates were brought into operation on July 1. and having in mind the importance of the new provisions as they affect certain of the established freight charges in the Wairarapa area, I have deemed it advisable to outline to you as concisely as possible, firstly, the general objective of the revision and secondly, its effect on the transport costs, particularly to Masterton. "Subjected, as it has been during the past decade, to acute competition from road transport, the Department, prior to the application of the effective measures of control which have been adopted by the present Government. was compelled to resort to the expedient of reducing its charges in those areas where competition was rife in order 'to safeguard railborne traffic. In this way a multiplicity of local rates came into being, based on what the traffic would bear in a competitive rather than an economic sense, and as a consequence the trading relationship between different communities which had developed under stabilised conditions was subjected to serious disturbance. The anomalous position that different communities were, according to their location, paying differential rates for the same service of transport naturally caused resentment on the part of those who did not benefit by competitive local rates, and their disapproval has been voiced to the Department in no uncertain manner. STANDARDISATION SOUGHT. “The main objective of the tariff revision was to restore as far as circumstances permitted the desirable principle of standardisation to the application of the freight charges. This result was achieved, firstly, by eliminating the two. highest merchandise rate classes (‘A’ and ‘B’) and adopting the third highest class CC’ as the dearest rate for ordinary goods, thereby bringing the standard rates within measurable distance of the average local rates. The new standard rate was given the widest possible general application with the result that the differential local rates were almost completely eradicated from the tariff. “The adjustment has resulted in some cases in a marked saving in transport costs, whilst in others the reverse position has obtained, the ultimate effect being a financial gain to the community and not to the Department. “Dealing specially with the position at Masterton as it is affected by the new conditions, the local rate of 33s per ton for Classes ‘A,’ ‘B,’ ‘C’ and ‘D’ goods was omitted from the revised

scale of charges and the following position obtained in regard to transport costs as from July 1: — Rail (including delivery.) Old local New standard rate rate (per ton) (per ton) A. B, C. D. C D 335. 42s 9d 335. Road, per ton. Department’s Wellington Goods Services Express Co. 28s 7d. 335. BASIS OF ROAD RATE. "The rate of 28s 7d per ton by the Department’s road services is based on the highest rate charged by the proprietors of the several services at the time of their acquisition, viz., 26s per ton, increased by 10 per cent as from December 11, 1938. As a matter of policy the rate, in common with those in force on other road services acquired by the Department, is being maintained at its present level pending a decision being reached on the general question of bringing about a proper relationship between rail and road rates. So far as merchandise traffic to and from Wellington is concerned. the freight rates by rail under the new conditions were subjected to an increase as indicated by the figures quoted above. On the other hand, the effect of the reduction in the standard rates consequent on the merging of present classes ‘A’ and ‘B’ into ‘C’ was reflected in a substantial reduction in the rates on merchandise goods emanating from Auckland and other points outside the local rates area and which will, as in the past, be subject to charges at the standard rates. INCREASE LARGELY OFFSET. “An analysis of one month’s merchandise traffic into Masterton from all sources discloses that the total freight charges at the rates in force prior to July 1 amounted to £843, whereas the charges calculated at the new rates would amount to £B6l, representing an increase of £lB. In effect, this goes to show that 'the increase in charges due to the transition from local to standard rates in respect pf Wellington-Masterton goods will be very largely offset by savings in other directions.

“During the early stages of road competition in the Wairarapa area the rates charged by the operators ranged from 40s to 45s per ton, but owing to internal competition among the rival road services the rates have in successive years been gradually reduced to as low as 26s per ton. To meet this competition the rail rates were reduced to an uneconomic level and the reversion to standard charges in this particular instance is therefore marked by a relatively higher increase than has occurred in the majority of areas where the rates have been subjected to a similar adjustment.”