@coppercapped states
- the ‘Common Carrier’ obligation for freight traffic would have to have been abandoned. (Very simply, the ‘Common Carrier’ obligation meant that charges for each type of traffic were fixed and published and that the railway company had to carry the goods offered. It was easy for the new lorry owners to undercut the railways as they knew what the railways charged).
- the Traffic Commissioners' control on rates and charges would have been abandoned. (The railways and canal companies could not set their own rates and charges - this was done by the TCs and always involved a delay).
These obligations were frequently cited by British Railways and some subsequent commentators as a significant part of the factors which acted to the detriment of British Railways but that arguably these were (and continue to be) a convenient excuse for British Railway's poor financial performance.
Firstly it is argued that the common carrier obligation prevented British Railways charging more for the freight traffic they carried. That is true however British Railways had no concept of the elasticity of demand. They seemed to think that if they could put the freight rates / passenger fares up by 6.5% then they would get 6.5% more revenue. That is patently not a universal truth. Some types of traffic would bear higher fares - because road hauliers could not compete - and some wouldnt. BR had hundreds of exceptional rates lower than the published rate which they could charge if they wished or thought desirable. The problem was they became the de facto rates they
nearly always charged. BRs commercial department was simply too weak and gave way far too easily. They didnt posess either the skills or the knowledge (of the costs) to negotiate successfully.
Secondly BR didnt know what it actually cost to carry anything and thus they werent able to go to the Tribunal and put forward a well reasoned case with the evidence to back it up to get the rates increased. Likewise as they didnt know the true costs they couldnt negotiate (see above).
Thirdly knowing how long it took to get rate increases agreed they should have factored this in to their calculations when going to the Tribunal. They failed to do this.
Finally it is always postulated that the hauliers undercut the railways as they knew what the railway would charge. This seems to me to be very simplistic because the hauliers may have charged less simply because they had much lower costs and (were far more efficient) and could do so irrespective of what BR may or may not have done. Many customers may have preferred road haulage simply because door to door it was quicker than BR.