The Tanzania-Zambia Railway (TAZARA) to Dar es Salaam faces competition from road transport and from railway lines to other ports. It is required to cover both capital and operating costs. The author assesses its performance and its prospects.
Topic: 13.2 Surface Freight
Deregulation of the motor carrier industry has led to reduced charges and has not injured those shippers/receivers who were thought to need protection.
The author criticises the reference to Ramsey pricing in a recent decision by the Interstate Commerce Commission on charges for transport of coal. He finds that Ramsey pricing is suitable for public finance or for nationalised industries, but cannot be applied after deregulations.
International road haulage between the original six member states is still subject to compulsory forked tariffs. A system of reference tariffs operates between them and Denmark, Ireland and the United Kingdom. The author considers the shortcomings of both systems and the prospects for further liberalisation.
In both France and Switzerland recent studies have urged freer competition and a minimum of state intervention in freight transport. The author doubts the feasibility of the proposals at present.
British Rail, now largely freed from government regulation, bases its freight prices on the prices of its competitors and on quality of service. Costs are used to tell whether, and for how long, br can profitably accept traffic at market prices. Assets will be replaced only to the capacity which is justified by traffics which can bear their long-run marginal costs. In the Common Market countries road and rail are both subject to detailed government regulation of charges.
Professor Abouchar examines the freight schedules introduced on the brazilian railways in 1968. He concludes that they will be more inflationary than the old rates, leading to still larger deficits and to increasing demand in directions that will be harmful to national efficiency.