METHOD OF DETERMINING RESPONSIBILITY FOR UMCOMPLETED CARS IN CHINA'S RR SHIPPING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700200267-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 267
• Publication Date: December 28, 1954
• Content Type: REPORT

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CLASSIFICATION c-o-N-F-I-D-E-N-T-I-A-L.
CENTRAL INTELLIGENCE AGENCY REPORT
INFORMATION, FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CO NO.
COUNTRY China
SUBJECT Economic - Transportation, rail, operation INFORMATION 1951
HOW
PUBLISHED Monthly periodical DATE DIST. 1F Dec 1954
WHERE
PUBLISHED Peiping
DATE
PUBLISHED Jun 1951
THIS IS UNEVALUATED INFORMATION
Jen-min T'ieh-tao (People's Railways), Vol III, No 6, 1951
METHOD OF DETERMINING RESPONSIBILITY
FOR UNCOMYi i,`IED CARS ::IN CHIUA'S RR SHIPPING
The Ministry of Railways is promoting the execution of transport agree
meats in order that both railways and shippers may derive greater benefits
from transportation planning. Among other points, the agreements deal with
the number of empty freight cars mutually agreed on to be supplied each month
by the railway to the shipper. This number of cars is thereafter referred to
as the planned number of cars. This monthly number is broken down into the
daily number to be supplied, with the shipper having the privilege and obliga-
tion of indicating the number requested each day.
The responsibility of the railway to supply the planned number of cars is
accompanied by the responsibility on the part of the shipper to load the empty
cars promptly as they are supplied to him. The agreements also provide for a
"marginal coefficient" of 20 percent above or below the planned number of cars.
To illustrate, suppose the planned number averages 10 cars per day; the upper
limit would then be 12 cars and the lower limit 8 cars. A number within the
marginal limits would be between 8 and 12.
In practice, it frequently happens that the railway fails to supply the
expected number of cars on certain days and thus disappoints the. shipper; and
more frequently, perhaps, that the shipper fails to load promptly the full
number of cars supplied, thus disarranging the railway's train arrangements
and wasting the capacity of the idle cars. The term "uncompleted cars" is
applied to ouch cars, whether it is the railway that fails to complete the
number to be supplied, or the shipper that fails to complete the number to
be loaded. A penalty is imposed on uncompleted cars; but it is not a simple
matter to determine where to draw the line of responsibility between the two
parties.
CLASSIFICATION C_-0_-N_-F_-I_-D_-E_-N-T-I-A_-L_
11". DISTRIBUTION
50X1-HUM
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C-0-N-F-I-2E-Li T-I-A-L
It is desirable that this question, as to how to assess fairly the
responsibility, be lifted from the plane of vague moral responsibility which
is beset by vexing disputes, to an unambiguous plane of legal responsibility,
and that a fair method of determining the responsibility for uncompleted cars
be incorporated in the transport agreements. To facilitate an understanding
of the problem and the search for a solution, let us assume the particulars
of a typical case as follows.
1. The parties to the agreement are the Peiping Branch of the China
Department Store Company, and the Peiping Railway Subbureau.
2. In the agreement, the planned number of cars for the month is the
basic task to which both parties are committed. The average daily [planned)
number of cars is the work target for the shipper to request and the railway
to supply. When determining responsibility for uncompleted cars, the planned
number of cars for the whole month and the total number of cars loaded are the
standards of reference.
3. The number of cars planned for the month is 300, which would be an
average of 10 cars per day as the planned number. In the light of the loading
and unloading capacity of the railway and of the shipper, the marginal coef-
ficient of 20 percent is mutually decided on and made a part of the agreement.
This means that neither party may exceed 12 or fall below 8 cars per day.
4. If it is found that the full number of planned cars has not been
supplied by the railway or that the shipper has failed to load those that
have been supplied, a penalty is imposed to indemnify the opposite party for
breach of the agreement. For illustration, assume the same figures as
mentioned in the preceding paragraph. Table 1 (below) indicates other figures
for each day in five columns, where Column A is the day of the month, Column B
is the daily average planned number of cars, Column C is the number of cars
requested for each day by the shipper, Column D is the number of cars supplied,
each day by the railway, and Column E is the number of cars loaded each-day
by the shipper.
Table 1
A
B
C
D
E
A
B
C
D
E
1
2
10
10
12
8
3
17
10
10
10
10
12
6
6
18
10
10
10
9
3
10
12
7
7
1
4
lo
12
10
9
10
10
10
10
5
5
10
12
8
9
20
10
10
10
7
6
7
21
10
9
12
8
7
10
10
12
12
6
6
5
6
22
10
9
12
7
8
10
23
10
9
2
1
9
10
12
7
7
24
10
9
12
8
10
10
12
6
6
25
10
9
12
10
11
12
7
7
26
10
9
12
6
1
10
10
10
8
27
10
9
12
4
2
1
10
1
10
10
9
28
10
, 9
12
3
3
14
0
1
10
10
9
29
10
9
12
12
0
10
10
9
30
10
9
12
5
15
10
10
10
8
16
10
10
10
9
Total 300
310
291
228
Having these figures as to performance, there are three ways in which
to calculate the number of uncompleted cars for which either party is re-
sponsible.
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1. The planned number, shown in Column B. is taken as the standard of
reference, with which the number of cars supplied and the number,of cars
loaded are compared, without referring to the number of cars requested, or
to the marginal coefficient. The number of cars which the railway fails to
supply should be computed for each day, and the number which the shipper
fails to load should be computed for each day, to ascertain the responsibility
of each party. These figures are shown in Table 2 (below), in which Column A
is the day of the month, Column F is the number of cars below norm for which
the railway is responsible (compare Column D with Column B in Table 1), and
Column G is the number of cars below norm for which the shipper is responsible
(compare Column E with Column B in Table 1).
Table 2 shows that the railway was responsible for 27 cars and the
shipper for 45 cars; together, these amount to 72 cars. But the railway,
without falling below the lower marginal limit, supplied 291 cars, i.e.,
only 9 cars short of the planned number. On the other hand, of the 291 cars
supplied, the shipper loaded only 223 cars. The difference between 291 and 228
is 63 cars, whereas Table 2 indicates the shipper's responsibility for only 45
cars. There seems to be something unfair in this method of computation.
2. The number of cars requested, as shown in Column C of Table 1, is
taken as the standard ofreference, and Column D and Column E are compared
with Column C. When this is done, the number of uncompleted cars for which
each party is responsible is shown in Table 3 (below), in which Column A is
the day of the month, and Colums F and G show the number of uncompleted cars
of the railway and shipper respectively, when cc.-.pared with the number of cars
requested as shown in Column C of Table 1.
3 -
C-O-N-F-I-D-E-N-T-I-A-L
A
F
G
A
F
G
1
2
17
2
4
18
1
3
3
19
4
1
20
3
5
2
1
21
2
6
4
1
22
3
7
4
23
1
8
3
24
2
9
4
25
10
3
26
4
11
2
27
6
12
1
28
7
13
1
29
14
1
30
5
15
2
16
1
Total
27
45
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C-O-N-F-I-D-E-N-T-I-A-L
Table 3
A g G A F G
1 -4
2 -6
3 --5
4 -2 -1
5 4
6 -6 -1
7 -6
8 5
9 -6
10 5
- 2
- 1
_ 2
- 1
17
18 1
19
20 3
21 - 3 - 1
22 -3 -2
23 - 3
24 -3
25 -3 -1
26 -3 3
27 -3 5
28 -3 -6
29 -3 3
30 -3 -4
Total -19 -33
From the totals, it is seen that thefiguresrailwaytis responsible for 19
cars and the shipper for 33 cars. These two otal 52 care; but the
actual number of uncompleted cars, as seen from Table 2, was 72 cars, and not
52 cars.
3. The marginal limits are taken as the standard of reference. If the
railway supplies not more than 12 cars nor less than 8 cars a day, and if
the shipper loads not less than 8 cars per day, then neither party is responsible
for any uncompleted cars. The figures in Table 4, based on Table 1, show the
number of uncompleted cars on this third basis of comparison.
C -0-N -F -I -D -E -N -T -I -A-L
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G
A
F
G
1
17
2
2
18
3
1
19
4
20
5
1
21
.6
2
7
2
22
8
1
23
9
2
24
25
10
1
26
11
12
27
2
4
13
28
5
29
30
3
Total
11
18
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C-0-NrF-I-D E-N-T-I-A-L
From Table 4 it appears that the.railway is responsible for 11 cars
and the shipper for 18 cars. Combined, these total 29 uncompleted cars, which
also does not agree with the actual number, which is 72 cars.
It is plain that none of the three methods yields figures that correspond
to the actual number of uncompleted cars, and hence cannot be used. Consequently,
the writer offers two formulas, that accord with the transport agreement, by
which the extent of responsibility of either party may be easily computed. These
formulas are as follows:
1. The number of uncompleted cars for which the railway is responsible (X),
is equal to the difference between the number of cars requested (C) and the
number supplied (D), minus the number which the railway could not supply for
reasons beyond its control (N). That is: X - (C - D) - N.
2. The number of uncompleted cars for which the shipper is responsible (Y),
is equal to the difference between the planned normal number (B) and the number
requested (C), plus the difference between the number of cars supplied (D) and
the number of cars loaded (E), provided the latter is not greater than the planned
number, minus the number of cars uncompleted for reasons beyond the shipper's
control (Q). That is: Y - (B-C) - (D-E) - Q.
Substituting the actual numbers from Table 1 and Table 2, we have:
X =300 -291 -0 =9
Y e (300 - 300) - (291-228) - 0 - 63
Having ascertained these figures, it is clear that the shipper should be
responsible for indemnifying the railway for the difference between these two
figures, Y and X, which is 63 - 9 = 54 cars, (multiplied by the prescribed
penalty for each uncompleted car).
The following comments are offered on some of the points in the problem
under consideration. Uncompleted cars, according to the terms of the trans-
port agreement, are attributable to one or more of the following causes:
(a) the shipper did not request enough cars; as when the planned number of
cars was 300 but the shipper requested 200, which was 100 too few; (b) the
railway did not supply enough-cars, as when the shipper requested 200 cars
and the railway supplied only 150 cars, which was 50 cars too few; and (c) the
number of cars loaded was too few, as when the railway supplied 150 cars, a
number not in excess of the planned number, and the shipper loaded only 100
cars, which was 50 too few.. When the number of cars supplied is too few, it
is the railway's responsibility; if too few cars are requested or too few are
loaded, it is the shipper's responsibility.
Sometimes it may happen that the supply of cars, the request for cars,
or the loading of cars may be too small, for extraneous reasons, in which
circumstances the railway should not be held responsible on the one hand,
or the shipper on the other. (This point should be specifically safeguarded
in the terms of the transport agreement.) Any cars uncompleted for such
reasons should be deducted. Examples would be the railway's inability to
supply the planned or requested number of cars on one or more days, or for
the month as a whole, because of, let us say, a washout on the line; or the
shipper's inability to load the cars supplied because of a government order
dictated by unrelated considerations. These instances are examples of what
are meant as causes outside the railway's or the shipper's control.
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One point is to be noted in connection with these formulas: In any case
where the monthly aggregate of the number of cars supplied exceeds the planned
number, computations as to responsibility should be based on the latter figure,
for according to the terms and spirit of the agreement the duty of either party
does not go beyond the planned figures, and hence no responsibility is attached
to the number of cars in excess of the planned number.
If the total number of cars requested by the shipper exceeds the planned
number, it may be'for either of two reasons: that the shipper is really
desirous of loading more than the planned number, or that the shipper, knowing
that the railway is rather short on cars, requests for every day the full number
up to the upper marginal limit, hoping thereby to get at least the planned
number.
When the number of cars supplied during a month exceeds the planned number,
it may be for either of two reasons. One is that in the first part of the
month the railway was unable to supply the usual number of cars, and so later
in the month it supplied the maximum number permitted by the marginal coefficient,
thus hoping to equal or surpass the planned figure for the month. The other is
that the railway may wish to turn in a performance record which surpasses the
planned figures.
Whatever may be the case, the duty or responsibility of either party does
not extend beyond the planned figures, and no penalty should be imposed in
connection with any cars in excess of the planned figures. Sometimes it occurs
that a shipper has no cargo, or only insufficient cargo, to be shipped. Neverthe-
less, he requests the usual number in order not to fall below the lower marginal
limit of the planned number. If these cars are supplied, and the shipper is
unable to load them, they remain idle and their carrying capacity is wasted.
In the Soviet Union, there is a legal responsibility attached to such
practices. They should be strictly prohibited, and that is why the responsibility
for uncompleted cars must be computed and penalties imposed. Another reason for
the penalties is that the system tends to keep the railway's planning more real-
istic and thus contributes to improvement in service and in performance.
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