While these conditions existed, and while the railways were able to make a profit on their business as a whole, the unknown degree of cross-subsidisation involved in carrying bad traffic on the back of financially good traffic was very largely ignored. Now, however, after the post-war growth of competition from road transport, it is no longer socially necessary for the railways to cover such a preponderant part of the total variety of internal transport services as they did in the past, and it is certainly not possible for them to operate profitably if they do so.
Road competition has forced down rates on good railway traffics to the point where they are quite incapable of subsidising the very costly provision of services to handle poor rail traffics. Even worse, the burdening of good traffics with costs arising from bad ones has led to the transfer to road of a considerable volume of traffic which railways are better able to handle, in order to preserve on rail traffics which could be handled better by road.
It is this situation which necessitates a much more analytical examination of the Railways' business with a view to reshaping their system, their mode of operation, and their pattern of services and traffics.
ANALYSIS OF THE PROBLEM
The logical approach to the problem of shaping, or reshaping a railway system is:—
- (i) to determine the basic characteristics which distinguish railways as a mode of transport;
- (ii) to determine under what conditions these characteristics enable railways to be the best available form of transport;
- (iii) to determine to which parts of the total national pattern of transport requirements these conditions apply;
- (iv) to shape the railway route system and services so as to take advantage of favourable circumstances wherever they exist.
Unfortunately, simple as this sequence appears, there is no single or simple way of accumulating and presenting information which enables it to be followed in quantitative terms. It is, nevertheless, a very useful beginning to consider, even in general terms, what are the basic characteristics of railways and under what circumstances these characteristics are likely to make railways the best available form of transport.
Railways are distinguished by the provision and maintenance of a specialised route system for their own exclusive use. This gives rise to high ked costs. On the other hand, the benefits which can be derived from possession of this high cost route system are very great.
Firstly, it permits the running of high capacity trains, which themselves have very low movement costs per unit carried. Secondly, it permits dense flows of traffic and, provided the flows are dense, the fixed costs per unit moved are also low. Thirdly, it permits safe, reliable, scheduled movements at high speed.
In a national system of transport we should, therefore, expect to find railways concentrating upon those parts of the traffic pattern which enable them to derive sufficient benefit from these three advantages to offset their unavoidable burden of high system cost. In other words, we should expect the provision of railways to be limited to routes over which it is possible to develop dense flows of traffic, of the kinds which lend themselves to movement in trainload quantities
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