Applied Mechanics and Materials
ISSN: 1662-7482, Vols. 505-506, pp 955-958
doi:10.4028/www.scientific.net/AMM.505-506.955
© 2014 Trans Tech Publications, Switzerland
Online: 2014-01-16
Study on Economic Compensation for Owner of the requisitioned
Civilian Transportation in Emergency
QIAN Run-hua 1, a
1
( Department of Mechanical Engineering, Academy of Armored Forces Engineering, Beijing
100072 , China )
a
[email protected]
Keywords: transportation economy, transportation mobilization, transportation impressments,
traffic pricing, transportation cost analyses.
Abstract. This paper explains and demonstrates how to compensate practitioners of the requisitioned
civilian transportation for the loss in emergency in accordance with the rule of law, international
practices and traffic economics theory. Civilian transportation is important traffic strength in
emergency. Transportation impressments are related to various traffic modes including railway,
highway, airlift, waterage, and determining how to find a compensatory price method is the main
objective. Some foreign cases, related to economic compensation of civilian transportation, were
introduced in national emergency impressments. Subsequently. Economic compensation pricing
problem was analyzed according to pricing principles of transportation economics.
Introduction
Emergency generally refers to a threat to social interests and national security event. Transportation
plays an important role in dealing with emergency. Handling emergencies requires a lot of strength of
civil transportation，including transportation business and personal capacity. With the help of the
national expropriation to transport practitioners, the transportation practitioners make the transition
from economic construction services to support emergency role. This conversion can make up for the
lack of transport capacity in the treatment of emergency action, mobilize Social transportation
strength to deal with an emergency service, with less expenditure, two aspects to meet the economic
construction and emergency demand for transportation. The Regulations about national defense
mobilization of civil transport resources say that state expropriates transport power, and give
appropriate compensation in order to meet the need of emergency action in wartime and peacetime
under special circumstances [1]. This rule fully consider the current actual situation of China's
economic and social development, Learn from successful experience to mobilize civil transport
capacity to ensure emergency need in some developed countries, is the modern transportation
economics principle in the application of transportation mobilization in China.
Some cases on the expropriation and compensation to civil transport resources in developed
countries
Economic compensation to transport practitioners resulting in losses in dealing with an emergency is
the embodiment of national recognition and protection of the legitimate interests of the individual
enterprise, but also the common practice in most countries in the world.
The Federal Control Act, which permits government undertaking railway economy
compensation granted by president, was passed in United States in 1918. The passage of the Act
reflects the purpose of the national control of railway transportation. The Second World War, the
wartime shipping administration by law is proposed using high salary bonuses, adventure and
exempted from military service, a lot of qualified seafarers were rallied to participate in military
exercises. Shipbuilding and Operating Subsidies Terms in Merchant Shipping Act was passed in
United States in 1936，which states that all specifications of review and revision, relating to new ship
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and shore sea loading dock machinery, must be carried out by the Department of the Navy, that such
additional construction costs ,which any emergency need to add special properties and cannot
increase the business value, pay by the United States Navy after entering into a contract by the
shipping agency and manufacturers. In the 1990 s the gulf war and the war in Iraq at the beginning of
the century, by the method such as signing a lease contract to reasonable compensation of civil
capacity, The American forces aroused the enthusiasm of the civil transportation company in
accordance with the law to participate in military action, ensured the operation smoothly.
As early as in 1914 October, the public charter rate for expropriated offshore vessels began to
implement by the Secretary of the Navy in the UK. The rate was usually calculated on the basis of
business expenses at the time, and subsequently increased the crew’s wages, food and other
necessities, as well as the maintenance of ship repair , marine insurance and other expenses. Under the
United Kingdom stipulates that private railways, shipping losses in times of war, the Government
shall be compensated，that the civilian transport practitioners operating profit engaged in handling
emergency should be kept at pre-war standards, the Government pays the shortfall when fewer than in
the war. In December 1939, the United Kingdom raised the rental fee for renting their ships.
Early stage of World War II, Germany implemented economic policy for vehicle license tax
relief compensation, which had made a massive increase in civilian vehicles for the full collection of
the vehicle after the war began, it had laid the material foundation for different uses to meet.
In 1942, the Traffic of Posts and Telecommunications Province and the Ministry of Finance in
Japan stated that five kinds of losses caused by Ship's participation in dealing with emergencies would
receive financial compensation after mobilization Compensation Committee decided, such as arising
from Ship circuitous route and retention, the sinking of the ship, and the damage resulting from the
loss of the distress, crew condolences and distress, especially sailing crew allowance, insurance of the
vessel[2].
The enthusiasm of civil transport practitioners to participate in emergency is better mobilized by
the various economic compensation approaches in different countries of the world. For example,
British requisitioned merchant ships amounted to 1,770 from August 1914 to February 1917,
accounted for 49.4% of total vessels. Before World War II, the total tonnage of expropriated foreign
ships reached 10.15 million tons as much in United Kingdom. Britain and Argentina during the
Falklands war, United Kingdom spent 55 million pounds to confiscate 56 merchant ships. Ship refit
high workload, time is short, but as a result of insufficient financial compensation makes the work
progressed quickly. The average conversion time was only 72 hours per ship. Recently the Gulf war
and the Iraq war, the US military transported 27% supplies and personnel of 64% by civil transport
aircraft, commercial shipping took about 95% of the dry goods and 99% of all kinds of oil product
transportation task，and United States railway company transported most heavy equipment from the
barracks to the port of loading.
Economic Compensation Analyses on the Requisitioned Civil Transportation in National
Emergency
The Price Theory of Economic Compensation
In general, the civil transportation mostly serves the goods and personnel movement in peacetime, so
it has the merchandise attribute. In traffic transportation, there are three theories for the traffic
production price, namely, the traffic cost theory, the traffic marginal cost theory and the difference
price theory [3].
The traffic cost theory considers that the compensation price must be able to afford the operation
cost. That is also to say that the compensation income must represent the value. If not, the operation
action cannot be sustaining, even not reproduce with the profits. This is the labor value theory in
applied. The transport compensation price is based on the transport value, which is the sum of
Applied Mechanics and Materials Vols. 505-506
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transport costs and the profits. The traffic marginal cost theory determines the price base on the
optimized resource distribution. Its opinion is that the transport quantity is determined by the
consistent principle between the traffic price and the marginal cost, so the optimized benefit of the
traffic system can be gotten. From above theory, when the marginal benefit and marginal cost is equal
for the civil transport, the system benefit is best [4]. In Fig.1, the cross dot of MC and MB is
maximum position of national mobilization benefit with the civil compensation transport benefit, and
the corresponding abscissa is the civil compensation transport quantity, also, vertical is the
mobilization price. The difference price theory is also called the dependent price, which is determined
by the service objects that admit and will to afford the price. So the difference price can be applied in
the civil compensation.
MC
Price
MB
Optimal value
Transport Volume
Fig.1 The relationship between MB and MC
Economic Compensation Analyses on the Civil Transport
In emergent event, the compensation for civil transportation is not only to protect the legal interests
for mobilized, but also to protect their positivity. On the other hand, the mobilization organization can
administrate effectively. The compensation for civil transportation includes three parts, as the traffic
equipment- infrastructure, the traffic operation, and manpower resource, so they all should be made a
price based on the traffic economics and a comprehensive method.
The traffic equipment-infrastructure is the first condition in the mobilization task. The national
mobilization potential is strong for the enough civil transport. Considered the price theory and the
compensation chance, the economic compensation can be in advance and afterwards. The
compensation in advance is that the nation purchases or support the civil equipment-infrastructure
with the favorable policy or economic allowance. The compensation afterwards is to compensate after
the task. It includes the task cost, the share cost and certain profits. It is showed in formula (1) [5].
（1）
P = AC (1＋r )
In the formula (1), P is the Compensation Price, AC is the Transport Cost, r is the Ratio of
Profit.
Considered the difference of individual cost, the transport cost can be average cost. The cost is
mainly determined by the transport quantity, in addition, it also should include the cost of
loading-unloading, transit, storage, berth, etc. For the damage and loss of the traffic
equipment-infrastructure during the emergent events, the cost should be compensated [6].
According to marginal cost theory in the traffic economics, the compensation price of the
mobilized civil transport can be given. It is showed in formula (2). Namely, the compensation price is
the cost of operation, which should consider various factors, such as increasing damaged
infrastructure, severe environment, jamming. So the compensation price is increasing.
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∆TC
（2）
∆Q
In the formula (2), P is the Transport Prices, MC is the Marginal Cost, ∆TC is the Increase of
Total Cost, Q and ∆Q are Operational workload and capacity increment.
In the civil transport, the compensation price of manpower resource should show the value of
manpower cost. For the persons are almost drivers and operators with more skills, the compensation
price should be relative high as a recompense. The compensation price can be different by different
technique grades based on the traffic different price theory.
P = MC =
Conclusions
It is legal in the national mobilization law that compensates the joined civil transport by economic
means in emergent events, and it is helpful to face the event. So it is the general mobilization path in
the world. According to the law, to compensate the civil transport based on the traffic economic price
theory can be positive for the transport need in emergent events, the civil benefits egis, and the nation
development.
Acknowledgements
This work was supported by the National Defense Science Advance research foundation of The
General Armament Department (9140A27040213JB35001).
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