This re-allocation to operational functions of the Working Expenses as shown in the Accounts is the first stage in the production of the analysis referred to in the following section.
Analysis by Types of Traffic
With the growth of the Traffic Costing Service, figures on the lines of the table which follows have been prepared annually, showing the breakdown of revenue and costs between the main classes of traffic for British Railways as a whole. To do this, it is necessary to allocate many costs which are not identifiably associated with particular traffics. Such allocations cannot be made in a manner which is beyond dispute, but by dealing with cost elements individually and allocating them in the manner which seems most appropriate for each, results can be produced which provide a sound basis for general conclusions. The figures are shown in Table No. 1.
It will be seen that, in 1961, none of the main classes of traffic covered their full costs, with the exception of coal, which yielded a small margin of net revenue. Therefore, none of the traffic groups can be considered good, in an absolute sense, but there is a wide spread in their relative merit which reflects the extent to which they permit movement by dense flows of well loaded trains. Thus, in the passenger field, stopping-trains are by far the worst loss maker. These trains, which derive little advantage from the speed of rail movement, are known to be very lightly loaded and to run, very largely, on routes which carry little traffic of any kind. Against direct cost alone they show losses almost equal to total receipts, and the overall loss is nearly twice receipts. On the other hand, fast and semi-fast services, provided by through trains which mostly load well and operate over the routes with high traffic levels, show a substantial margin of receipts over direct costs, even though the group as a whole falls short of paying its full share of system cost.
In the freight field the disparity between classes of traffic is just as great. Wagon-load general merchandise, which loads badly and gives rise to very little through train movement is a bad loss maker. Sundries traffic is bad for the same reason. The two freight traffics which show the best margin over direct cost are minerals and coal. Of these, coal gives a small margin of profit over full cost, while mineral traffic falls just short of doing so. These are classes of freight which give rise to a much higher proportion of through movement of well loaded trains than the others.
The allocations of traffics to groups is necessarily somewhat arbitrary and the traffics within any one group are far from homogeneous. Within groups of traffic which are relatively good as a whole there may well be some bad loss makers, and in groups which are bad, there may be some good streams of traffic. Therefore, although these figures for main traffic groups are informative in a broad sense, they fall far short of providing a basis for selective reshaping of the railways' traffic pattern. Also, because they give no information about the way in which traffic varies in mixture and density over the route system, they give no clear guidance as to how the physical system should be changed. For that purpose, a more detailed analysis is necessary.
Before more detailed consideration of particular types of traffic, however, it is necessary to say something about the route system itself and the distribution of traffic over it.
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