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Railway Rates and Charges and the Common Carriers Obligation

In the mid 1830's the railway's adopted what they thought would be a simple system of charging for goods shipped based on their value. For example the Liverpool & Manchester set up three basic classes of goods: cheapest were items such as grain, flour, iron and timber, the middle rate applied to cotton, wool, dyewoods, sugar and coffee whilst wine, spirits, indigo, tea and silk commanded the highest rates. The accounting for a single shipment involved a toll for the use of the line, a charge for haulage by the company locomotive, the cost of hire of the wagon, charges for loading, unloading, covering and uncovering the load in the wagon, a charge for the use of stations and possibly charges for the cost of collection and delivery to and from those stations. This was one reason that the private owner wagon and the private siding remained popular as this meant that the railway could only charge for the haulage and the use of the line.

As the railway system evolved and the range of goods in transit increased the business of railway rates became ever more complex. At a time when all the charges had to be worked out by the booking clerks and the accounts had to be similarly drawn up by hand large numbers of clerks toiled all day calculating charges and writing the details in large books with quill pens. The administrative cost of this system was considerable and no other railway in the world allowed itself to get into such a complicated system of charging.

The cartoon below was scanned from a 1930s compilation of Punch cartoons, and shows the complexities encountered by the general public (and the railway staff) in dealing with railway rates. The caption reads
Railway Porter to old Lady (travelling with a Menagerie of Pets) "Station master say, Mum, as cats is dogs and rabbits is dogs but this 'ere tortis is an insect, so there aint no charge for it"

Fig ___ Punch cartoon from 1869
Sketch showing a map of the British inland waterways

The Rail and Canal Traffic Act of 1854 was passed to maintain a degree of competitiveness between rail and canal systems. Under this Act the railways were obliged to carry any and all goods offered to them, other than where these might damage the rolling stock used or where they were physically too large to for the bridges, tunnels and passing traffic on the line. Examples of the goods that could be refused would be materials such as tar coated stone chippings (tarmac) or lime, and a firm might prefer to use its own rolling stock to avoid contamination of its product by other cargoes, an example of this would be salt. Following this act and other subsequent legislation the term 'common carriers' came into use, referring to this obligation to carry goods offered no matter how small the consignment. The 1854 Act also introduced a government regulated national system of charges for freight moved by rail, based on the weight and value of goods carried.

These two factors, the obligation as common carriers and the Government regulated charges structure, were to become the two biggest obstacles to the railway's ability to compete with road transport. A single low-value consignment had to be booked in, loaded into a wagon, transported to a transshipment depot, transferred to another wagon possibly as its sole cargo, this would then be taken perhaps to yet another yard before being attached to the local 'pick-up' goods train to be dropped off at the nearest station to its destination. The revenue on the cargo probably only paid for the time of the booking clerk. The 1888 Railway and Canal Traffic Act changed the law so that the Government could place a ceiling on the rates charged by the railways. All companies were required to submit their rates for review in a public hearing and all rates had to be listed in a Rate Book, which was to be made available to the public.

In 1893 the new government ordered railway rates came into force and the railways naturally increased the charges to the maximum allowed in order to recover the losses on enforced discounts. There was a public outcry at the time and another Royal Commission on Railways was hastily set up to review the law. This resulted in more legislation further restricting the freedom of the railways in altering their charges and leaving them no room for competition other than in the additional services and facilities they could provide.

Constrained by legislation on charging British main line railway companies began a period of intense competition based on providing better facilities for the customers. Smaller lines could not operate successfully under these conditions and many were purchased or leased by larger concerns. The larger companies were also running into difficulties and dividends were reduced to share holders. The Midland Railway had improved conditions for third class passengers some years before and this had to be matched by other companies, resulting in an average threefold increase in the weight of train per passenger carried. There was fierce competition for goods traffic, even if it made a loss there would still be some contribution from each consignment toward the fixed costs of operating the railway.

The Government control over railway rates, which were still based upon the value of the cargo carried, coupled with the obligation to carry any goods offered, became a serious problem for the railways with the growth of the petrol driven road lorry traffic in the late 1920's. Road haulage was not governed by the same 'common carriers' legislation, so a road haulier could offer to carry a high value cargo at a lower cost than the railway, leaving the railway to haul back the low value 'empties'. The Government had allowed an increase in railway freight charges in 1920 but then prevented any further rise until 1937. By the mid 1930's competition from road transport was becoming a serious problem for the railway companies, who launched a 'fair deal' publicity campaign.

It was the Transport Act of 1953, the year Elizabeth came to the throne, which first substantially altered the legislation relating to 'common carriers' and allowed British Railways to refuse less profitable cargo. Sundries traffic was transferred to National Freight Carriers in 1964 and the railways pulled out of this business completely in 1968. Railway parcels traffic was carried until 1981, after that the Red Star parcels service was operated for some years as a franchise from selected stations.

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