RAILWAY RATES-

The actual cost of carry goods can never be determined in the same manner as the cost of manufacturing goods. Goods trains run over  a track which is used  also for passenger  trains  and some  members  of a railway  staff are employed  in operating  both types of trains. Railway rates must therefore be computed specially. The basic principle of rate fixing is known   as charging what the traffic will bear. The result desired is that on the total traffic of all kinds, the income shall exceed the expenditure sufficiently to pay a reasonable return on the capital invested. It will be  recognized  that certain  goods  are of  such  a kind  that a heavy  haulage  charge  would  altogether  prevent  their transportation; therefore  the rate on such  goods  must  be  kept low.

Secondly, the ideal is along train made up of full trucks hauled a long distance. This happy  state of affairs of things  is rarely  attainable , although  the Nigerian Railways endeavor  to encourage  large  consignments  by reducing  the rate on them.

Again, rates are so fixed that the longer the haul the cheaper  is the average rate per mile  over the whole  distance. The cost of carry goods by rail are strictly of two kinds, the direct /Variable and the indirect/ fixed. The former  consist  of the  wages  of the train’s crew  , the cost  of the coal , the  wear and tear on the rolling  stock  and the permanent  way. These cost are called variable

Because they are not incurred if the train is not run. The latter consist of wages of station staffs, porters, clerks, and so on. All these items have to be paid, whether any particular train is run or not. Hence railway rates tend to be fixed between a maximum and a minimum. The minimum is usually just a fraction more than the direct cost and the maximum the highest charge that the goods will bear. If the charge were set higher than the maximum, the goods will not be transported at all. The maxima for different commodities will of course vary greatly. A commodity  which is very valuable  in relation  to its weight such as gold  can stand  a very high  rate  per ton , since  the percentage  added  to its  cost  as a result  will still  only  be small. With commodities which are cheap in relation to their weight even a modest rate per ton results in a large percentage addition to their cost. The system of charging what the traffic will bear was reasonably satisfactory so long as the railways had a virtual monopoly. Once road transport came into effective competition with them, however they found themselves in a very difficult position. As  has already  been implied  their business  had been built up on charging  just a little  more than  the direct  cost  on cheap  goods  and relying  on the ample  margin on dearer goods  to cover  the bulk  of relatively  high proportion  of fixed costs. It was however, those high priced goods which were particularly vulnerable to road competition. Road  haulers were able to carry them  at  much  lower figure than result  was that in the nineteen –thirties  the railways  tended to find themselves  left  with the traffic  which  produced  a poor  return and deprived  of that  on which they relied to cover  the  bulk of their direct  costs.  One objects of the proposed integrated charges scheme was to eliminate the competition between rail and road by fixing road rates as well. The 1953 Transport ACT aims  to give the railways  much greater  freedom  to compete with  road  haulage  on a local basis  and not  to tie  , them  to standard  rates. One  foreseeable  difficulty  in this scheme is that a great  volume  of clerical  work  will result  if as will presumably  be necessary , a  record  is maintained  at each station of all the rates granted. Where the mileage has been increased  for charging  purposes because  the track  has been  extremely costly to construct ,for instance a bridge which is about 1 and half miles  in length , is for  rate fixing  purposes charged as 4 miles. In response to the original challenge of road competition in the 1940s, the railway introduced special rates, which are rates other than the standard of a permanent nature. Secondly is the exceptional rates which are rates intended to be only temporary. These rates invariably represent reductions on the standard rate. The distinction between  special  and exceptional rates  is not so great as might  appear  in so  far  as in  practice, exceptional rats have continued  to be available  as long as  they have been  used. If, of course an exceptional rate ceases to be used then it may well be cancelled. In general , all special  and exceptional  rates  have been  subjected  to the same  percentage increases  as the  standard  rates. Exceptional  rates are usually  negotiated between  a railway  user and the railway  and they  may well  be available  subject , firstly  to each consignment  being  of at least a certain minimum weight  like 4 tons and secondly to all  the customer’s  traffic  over the route  in question being  sent  by rail . Once  an  exceptional  rate  has being  sent by  rail , it is  available  to all  other  rail users  for the same commodity on the same  conditions. In 1930-40, business was hot and bubbling, some very low  exceptional  rates were  granted  In some cases  lower  than  the direct  cost  of haulage. These were granted purely to prevent traffic being switched to road transportation. At present time it is not usual for Nigerian railways to grant reductions, of more than 10% of the standard rate. As a result, there are numerous anomalies in the present rates. It is, in fact in one particular instance cheaper to send goods to Manchester from Scotland than from Liverpool to Chesterfield – well the former is much further away. Note the British colonized Nigeria, so therefore all commercial activities were run by the British, even till date, the British’s influence is high on the Nigeria business sector. When  the proposals under the Act of 1953  for giving  the railways more powers to compete  with road transport  materialize , it will be within their power  to grant  exceptional  rates  which will not , as a right  be available to other users.

RAILWAY’S RISK-

In common law, the common carrier  must make good  any loss or damage  to the goods , he carries , whether it be caused  by his  negligence  or not. There are certain important exceptions , which can be the act of God, which signifies some unforeseen  accident  occasioned  by the  elemental  forces  of nature  which  could not  have been prevented  by the exercise puff any foresight  reasonably  to be expected  of the carrier. The Queen’s enemies, in additional to the above stated , the act of God, the carrier is not  responsible for the inherent  vice  in a natural tendency  to deterioration  of goods  carried. The first applies

Normally to animals; the second to fruit and other perishable goods. For the loss or damage caused by the neglect of the power of goods as in where they are insufficiently packed for transport. On  certain  valuable  articles  such as gold , jewels , the value  and nature  of the articles  must be  declared  and a  higher  rate of carriage  be paid  if a  claim  for loss was not  due  to the negligence  or misconduct of the company’s or its  servants/workers.

OWNERS RISK-

A carrier  is not liable  on the goods  carried  at the owner’s risk , except  it be proved  that  the loss or damage arose from  the willful misconduct  of the company  or workers . In  cases of non-delivery pilferage or miss-delivery   however  the onus is upon  the railway  to prove  that  the loss  was not  due to the negligence or misconduct  of the company  or its workers.  If goods are sent at owner’s risk, the rates are somewhat lower than when they are sent at railway’s risk. There are several sets of conditions for special types  of merchandise  such  as coal , edible , perishable  , damageable goods and livestock. Many, larger firms employ ex-railway clerks who are familiar with all these apparent anomalies, as rate checkers.

A word to the Nigerian government and the rest third world countries is to revive the rail sector of transport and reappoint old hands who were abandoned, retired from railway work, to be senior instructors to younger ages who make the man power but have no firsthand experience on railway management. If the railway transportation is fully revived aside from political distractions, it will greatly improve the economy of Nigeria and all other third world, developing countries.

CANAL RATES-

In many instances canal traffic is carried in the barges of private owners, and the function of the canal operator is primarily to keep the waterways in a navigable condition.