THE SHIPPING CLERK
In this discussion of the organization of the shipping department, the shipping clerk will be considered as assuming the duties of traffic manager, as well as those that usually pertain to his position. He will be at the head and have full charge of the department, keeping such records as may be called for by the business.
It is the duty of the shipping clerk to see that all goods are shipped promptly, packed and described to secure the most favorable rates, and properly routed. He must have a checking system that will enable him to locate errors and to know that all goods called for by an order have been shipped. He will be assisted by such packers, checkers, and porters as may be required to handle the work.
The packers will receive the goods called for by an order from the stock men, and will pack them properly. They will check all goods packed against the order. In this, they will be assisted by checkers, who check the goods received on the shipping floor and again when they are packed. Discrepancies must be reported at once and adjusted immediately.
In some concerns, the shipping clerk is also the stock clerk, in which case he has charge of the actual filling of the orders. He is assisted by stock men, who select the goods and assemble the orders under his direction.
Like the head of any other department, the shipping clerk should have full control of his department. No other person in the organization should be permitted to make shipments. Concerns have been found in which it was the custom for different employes to ship small articles without the knowledge of the shipping clerk. Invariably, this leads to mistakes and results in blame being wrongfully placed on the shoulders of the shipping clerk. And even greater damage is done in the disruption of the organization.
Information Required. The shipping clerk should be fully informed on all traffic questions that affect the shipment of the goods of his house. Of first importance is a knowledge of classifications, that he may know that his shipments are placed in the lowest classification to which they are entitled. Copies of the classifications can be obtained from any local freight office.
In this country there are three principal classifications, these being the official, governing the eastern territory; western, governing western territory; southern, governing southern territory. There are also a few special classifications governing classifications in certain states. While some attempt at uniform classification has been made, the several classifications show many variations, the same article taking different classifications in different territories.
When classifications are received, they must be carefully studied by the shipping clerk that he may really understand to what classifications his goods are entitled. It might be supposed that a certain article or class of goods would always take the same classification, but this is not the case; other questions than the name have a bearing on the question.
The manner of packing goods very often determines the classification. Certain articles are placed in a lower classification if boxed than they would be if crated. This is specially true of goods that are liable to damage in transit. Many shippers make a practice of crating goods because it can be done more cheaply than boxing, without realizing that the difference in packing cost is more than offset by the increase in the freight rate.
The classification is also sometimes determined by the manner in which the goods are described. It is necessary, therefore, to study the classifications with reference to the description that will insure the most favorable rate. However, false descriptions made for the purpose of securing a lower classification must be avoided, as the Interstate Commerce Act provides a heavy penalty for such falsification. But there may be several different descriptions which legitimately apply to a given article, each placing it in a different class. A case in point: The western classification made no provision for filing cabinets in carload lots, with the result that a carload shipment, described as filing cabinets, took the rate provided for less than carload lots. But the same classification gave a lower classification, consequently a lower rate, on office furniture in carload lots. Filing cabinets being office furniture, it was entirely legitimate to describe such shipments as office furniture.
Another illustration of the effect of description on the classification is found in shipments of carriages. The classification, and consequent rate, on this commodity is based on the space that it will require, rather than on the rate. If shipped knocked down and properly crated, with the dimensions stated on the shipping bill, a carriage takes a lower classification than if shipped assembled, or if the dimensions of the crate are omitted.
These illustrations are sufficient to show the importance of a thorough knowledge of the provisions of the different classifications. The shipping clerk who would give the best service to his house should make a study of this subject, even if he is obliged to take the classifications home and study them at night. Every shipper should see that his shipping clerk is supplied with copies of classifications governing the territory in which he is doing business, and give him an opportunity to learn their provisions in respect to the commodities which he ships.
Class Rates. A class rate, as the name implies, is one based on the classification. All commodities are divided into classes, six in number, and all commodities of the same class—with certain exceptions, explained later—take the same rate. Schedules of rates between given points, based on the class, are prepared by the classification committees, but before being put into effect, they must, in case they apply between points in different states, be submitted to the Interstate Commerce Commission for approval. While not a rate-making body, the commission is a rate-governing body, constituting, in a certain sense, a board of arbitration between shippers and transportation companies.
The rates being based on the classes—the higher the class, the higher the rate. To determine the rate, it is first necessary to find the classification; reference to the rate schedule will show the rate for each class.
Commodity Rates. A commodity rate is one applying to a special commodity, between definitely stated points. Commodity rates are established by the railroads to meet some special condition, and with these the classification committees have nothing to do.
A commodity rate does not apply to articles not named in the tariff even though they are of a similar nature, nor do they apply between points not specified in the special tariff. A commodity rate is, in effect, a special rate; it offers special inducements for the shipment of certain commodities, but is not intended to favor any one shipper. The commodity rate is for the benefit of all shippers of the commodity named.
The volume of traffic is the chief factor in establishing rates, either regular or special. It is an especially important factor in establishing a commodity rate. In a given community, some one commodity may be produced in large quantities. Perhaps it is a raw material which must be transported to certain manufacturing centers. To encourage the development of the industry, thereby creating a large volume of traffic, the railroads leading from the point where the traffic originates establish a commodity rate to other points, where the raw material can be used to advantage by the manufacturer. Or, perhaps, important manufacturers are located on other roads, in which case connecting lines join with the originating road and issue what is known as a joint tariff. This enables the producer to deliver his raw material to the manufacturer on favorable terms, when to pay class rates might compel him to abandon the enterprise, with a consequent loss of traffic to the railroads. This discriminates against no one, since every shipper of the particular commodity between the points named is entitled to the special commodity rate.
Frequently, however, a commodity rate exists between certain points which might, under certain conditions, be taken advantage of by a shipper located at a point outside of those named in the commodity tariff. For illustration, a manufacturer in Peoria, Illinois, is shipping a commodity on which a special rate is granted between Chicago and Milwaukee, but takes a class rate from the point of shipment. He makes a shipment to Milwaukee and pays the through class rate provided from the point of shipment, when by proper billing he would have paid the class rate to Chicago, and secured the benefit of the commodity rate from that point to Milwaukee. A lack of knowledge of commodity rates in effect in the manufacturer's territory has resulted in an unnecessary expense—a loss of money.
The claim might be made that the billing clerk at the local freight office should have given the shipper the benefit of the lowest rate. But he will fall back on the classification and be prepared to show that he has given the only rate quoted on shipments from Peoria to Milwaukee, which is the class rate. It is no part of his duties to keep posted on commodity rates granted by another road, while it is distinctly to the interest of the manufacturer to know of the existence of all such rates applying to his product.
Freight Tariffs. The Interstate Commerce Act provides that two copies of every freight tariff issued by the railroads shall be placed on file at each freight office, for the inspection of the public. Since the rates must be made public, the railroads do not object to supplying shippers with copies of the tariffs applying to their product. Through the local freight agent, copies of all tariffs applying from the point of shipment can be obtained.
It has been shown that, in the case of commodity rates, copies of tariffs from the point of shipment are not always sufficient. It is necessary to obtain, from connecting lines reaching the territory in which the trade of the house lies, copies of all special tariffs applying to the commodities shipped. The freight departments of all railroads, through their solicitors, make a practice of supplying copies of all regular and special tariffs to all large shippers on their lines, and to shippers on connecting lines who are in a position to divert traffic to them. Any shipper who has been overlooked, should write to the freight departments of all lines in his territory asking to be placed on the mailing list to receive copies of all tariffs affecting his product. By doing this, he will secure copies of all such tariffs as soon as issued.
The subject of commodity rates is one of the most vexing with which the shipping clerk has to deal, as it is also one of the most important. To compile a complete file of special tariffs, involves close study and much labor. But when once done, it can be kept up-to-date with little difficulty, and the saving resulting will far outweigh the cost.
Filing Tariffs. The manner in which freight tariffs coming into the office are filed is important, for unless properly filed and indexed they are likely to be of little value. The filing system must provide for quickly locating any tariff, and for locating all tariffs that may have a bearing on a particular case.
In the average shipping clerk's office, it is not uncommon to find the tariffs dumped into a drawer, without regard to their order, or hung on a hook on the wall. When a rate is wanted, it is necessary to search through the tariffs until one giving the rate is found. The chances are that the first rate found will be used, regardless of the fact that another tariff shows a special and lower rate.
Fig. 1. Vertical File of Indexed Folders for Railroad Tariffs
A very satisfactory file for freight tariffs is the vertical file, and one drawer will hold all of the tariffs required by the average shipper. If a two-drawer cabinet is provided, the shipping clerk will usually find other uses for the extra drawer.
Each railroad whose tariffs are on file should be assigned a folder, and the folders should be filed alphabetically under the names of the railroads, as shown in Fig. 1. All tariffs from one railroad should be filed in the folder assigned to that road, and arranged according to their numbers. All railroads number their tariffs and, in correspondence, refer to them by number. Reference to the tariffs will be facilitated, therefore, if those of each railroad are kept in numerical sequence.
Loose-leaf binders are sometimes used for filing tariffs, but not all tariffs are in proper shape for punching to fit the binder. Another disadvantage in using a loose-leaf binder is that freight tariffs are not uniform in size, resulting in an awkward, unwieldy book. For these reasons, the vertical file is found more satisfactory.
The Index. Since the tariff folders are filed in alphabetical sequence, no index is required to locate the tariffs of a given road, but a cross-index to locate all tariffs that apply to a given point, is a necessity. This index should be in card form, a card being used for each town to which the house ships, or is likely to ship, its products.
Fig. 2. Cross-Index to Tariff File
A very satisfactory form of card for this cross-index is shown in Fig. 2, which also shows the manner of filing. At the head of the card is the name of the town, and the name of the railroad on which it is located. Below the heading, the first column shows the names of all railroads issuing tariffs to the town in question, whether or not the town is located on the road. Following this are columns for the number of the tariff and for either commodity or class rates. These cards are filed in the same manner as the tariff folders—alphabetically by names of the railroads. A guide card is provided for each road and all cards representing towns on that road are filed in alphabetical order behind the guide card.
Fig. 3. Card for Class Rates
Suppose a rate is wanted from a point on the Delaware, Lackawana & Western, to a point on the Burlington. Reference to the Burlington tariffs does not give the rate, for the reason that the Burlington does not issue tariffs from points on the D. L. & W., but reference to the card shows that four roads issue tariffs from Buffalo to Burlington points, one of them being a commodity tariff. Reference to the commodity tariff shows that the special rate applies from a point in Ohio to Chicago, a connecting point with the Burlington. By proper routing, this special rate can be taken advantage of, class rates applying the balance of the distance. Without the index, it would be necessary to look through several folders, with the possibility that the special tariff might be overlooked.
Condensed Rate File. A condensed rate file covering a definite territory will prove a convenience to most shippers. The trade of most houses is confined to a certain definite and rather limited territory. A manufacturer may make an occasional shipment to a point outside of his regular territory, but, as a rule, his shipments will be confined within certain limits. This is even more true of the jobber and the wholesaler.
If a special rate file, covering the particular territory in which the shipper's trade lies, is prepared, it will be found convenient for reference, and will save consulting the tariff files whenever a rate is wanted. Such a file can be arranged on cards, or in a small loose-leaf book. One card or sheet should be used for each town, the name of the town being written at the head of the card.
Fig. 4. Card Index for Classifications
The card should show the rates for all classes from the shipping point to the destination, as well as the route. It may be necessary to record rates from more than one shipping point. A manufacturer may have two or more shipping points, and it is important to know from which points he can secure the most favorable rates. It is also advisable to include the shipping points of the chief competitors, that they may be given due consideration in meeting competition.
Fig. 3 shows the form of card for this rate file. The cards should be filed alphabetically, and it is well to include cards for some of the principal towns outside of, but convenient to, the regular territory. The rates for the different classes, rather than on specific articles, are given for the reason that the classification is more likely to change than the rate. If the rate on a certain article is given, and the classification of that article is given, should the classification of that article be changed, it would be necessary to rewrite the entire index. It is much less difficult to change the record of the classification of one article than to revise all of the rates.
Classification Index. For convenient reference, the shipping clerk should prepare an index showing the classification of all articles that he is obliged to ship. This classification index should be on cards or in loose leaf, whichever is used for the rate file. One sheet is used for each article, the name of the article being written at the top.
Fig. 5. Card for Commodity Rates
The record should show how the article is packed, the class, and the classification in which it is found. As has been stated, more than one class may apply to a given article, depending on the manner of packing; an article may take the first-class rate if boxed, or double first-class if crated. In such cases, both classes with the manner of packing should be shown.
These classification sheets should be filed alphabetically in the file used for the rate cards, and they should be printed on stock of a different color. Most shippers will need but a few of these sheets as the number of articles shipped by one house is small, as a rule. If a large number of articles is shipped, the classification index is of even greater importance. A suitable form for this index is shown in Fig. 4.
Commodity=Rate File. When any part of the goods shipped are subject to commodity rates, a file of commodity rates is fully as important as class rates. A commodity-rate file is arranged on similar lines to the file of class rates. A card or sheet is used for each town to which commodity rates apply, and the cards are filed alphabetically by names of towns. These cards can be filed with the class rates, but a distinctive color should be used.
The record should give the names of the articles taking commodity rates, manner of packing, the point from which the rate applies, the rate, the number of the tariff, and the name of the issuing railroad. On the line below the name of the town appears the caption, see also. This is for the name of some other point to which a commodity rate applies. Boone, Iowa, for instance, may not be a commodity point, though a special rate from Chicago to Clinton is in effect. The Boone card would refer to Clinton, and the card for that town would show the rate. Fig. 5 shows a form for commodity rates.
To compile such a record of rates as has been described, requires an initial expenditure of much labor, but is a profitable investment. When once compiled, changes can be recorded with little trouble. These files will always be valuable for reference, not alone to the shipping clerk but to the sales manager and the purchasing agent as well.
A comprehensive knowledge of classifications and rates will prove valuable not only to the shipper, but to the receiver of freight. It will save any merchant many dollars in freight charges on goods purchased f. o. b. point of shipment. The shipper may not pack his goods in a manner to secure the lowest rate, or he may not give the proper description in the shipping bill. If his attention is called to the matter by a customer, he probably will make the necessary changes in his methods.
Even the proprietor of a small retail business will find a study of this subject a paying investment. The writer has knowledge of a case in which the owner of a general store saved some $165.00 in one year by carefully checking every freight bill received, making claims for overcharges, and watching the packing and routing of his goods. Surely that amount would be worth saving, even to a house transacting a much larger volume of business.
Routing Shipments. One of the most important duties of the shipping clerk is the proper routing of his shipments. Like classifications and rates, the subject requires careful study. In too many cases this subject receives little attention, but by exercising care in routing shipments, the shipping clerk can be of material assistance to the sales department, and, incidentally, to the customers of his house.
Routing frequently affects the rate. It might appear logical to suppose that the rate between two given points would be the same, regardless of the route; but this is not the case. Of two routes to a given point, one may be longer than the other. If shipping and destination points happen to be in different states, the provision of the Interstate Commerce Act which forbids a higher rate for a short haul than for a long haul comes into play. Similar provisions applying to local shipments, are found in the laws of certain states. In Iowa, for instance, such a provision covers the transportation of passengers as well as freight. One railroad is not permitted to meet the competition of another having a shorter route between two points, but must base its rate on the mileage. All of which goes to show the necessity of considering the length of the haul in routing shipments.
The above conditions apply especially to shipments taking class rates, but when goods which take commodity rates are to be shipped, the question of routing is of even greater importance. It has been shown that a commodity rate may be in effect between two points on one road, or two or more roads may have issued a joint tariff which can be taken advantage of. The question of commodity rates, therefore, has a most important bearing on the routing of shipments.
Another factor that has a bearing on the routing is basing points, which necessitates a knowledge of the points on which rates are based. In the territories governed by the different classifications, certain common points are used for basing rates. On shipments from the central states to southern territory, rates are based on Ohio River points, while, to western territory, they are, in many cases, based on Missouri River points. Class rates from Chicago to all Missouri River points are, as a rule, the same over all roads, but, to points beyond the Missouri River, rates may vary from the different basing points; that is, the rate from Omaha to a western point may be less than from Kansas City, though the rate to these basing points is the same.
The alert shipping clerk will learn the basing points in the territory to which he is shipping goods—which he can do by consulting local freight officials—and will then secure tariffs from these basing points to the towns he wishes to reach. This information he will incorporate in his rate files.
Not least of the factors which should be considered in routing shipments, is the accommodation of the customer. It is frequently the case, that of two roads entering a town, the freight house of one is more conveniently located for the shipper. Rates being equal, shipments should be routed over the road from which the customer's cartage charges are the lowest. Or the customer may have a sidetrack to his warehouse from one road, which makes no switching charge, while on every car shipped over another road a switching charge must be paid. This charge may offset an advantage in rates. It always pays to accommodate the customer. When the wishes of the customer are known, they should be granted, within reasonable limits, even though it involves extra expense.