How Shipping Rates on Goods Affect Stores’ Salespower
What Change Should be Made in Proposed New Freight Classification (No. 17)?
By J. BROWN
Editor’s Note.–A circular letter, dated, 7th January, from one of the best organized trade associations of Canada, indicates that meetings are to be held soon to consider the application of the proposed new freight classification (No. 17).
THE latterday high cost of transportation so vitally affects the salespower of the Company’s department stores (as well as other wholesale or retail stores in Western Canada) that favourable groupings of certain classes of goods under the proposed new freight classification (No. 17) are considered important in view of the Company’s great problem of distribution.
While the new schedule is under consideration, H.B.C. traffic men will see the advantage of working to secure a spread of two classes between less-than-carload and full carload ratings on drygoods. It is reported also that every effort will be made to convince carriers that certain lines of drygoods should be listed separately or in greatly restricted groups, instead of being carried, as at present, under extensive groups. It is apparent that an important saving for H.B.C. stores would result from such re-classification in view of the 35 per cent. difference between first and third class and first and second class ratings.
Under the proposed new freight classification (No. 17), certain drygoods shipped in carlots will take a second class rate. The present classification (No. 16) on such drygoods gives no advantage in rate for carloads.
Why classification No. 17 (under consideration) proposes to allow a difference of only one class between L.C.L. and carloads of this commodity is not clear, inasmuch as for other lines of goods a difference of two classes is allowed when shipped by the carload. Drygoods certainly should be entitled to take third class rate in carloads.
Furthermore, both the present classification (No. 16) and proposed classification (No. 17) arbitrarily “lump” a great number of lines of merchandise in a special class without giving a special carload rate on them (see page 77, item 76, No. 16; page 97, item 60, No. 17).
One of the aims of the proposed new classification (No. 17) is to place a reasonable restriction on the indiscriminate mixing of merchandise which have a basic difference of origin. Accordingly, to get the greatest advantage from this classification for the drygoods business, those whose interests are affected will naturally insist upon a reasonable minimum weight for carloads–say 18,000 pounds. This would probably mean eliminating, of course, drygoods “not otherwise specified” and substituting certain lines of drygoods which would be entitled to mix and be eligible for third class rate in carloads.
A few headings are here suggested for such specified lines:
ALL KNITTED GOODS–Wool or cotton, such as underwear (men’s, women’s and children’s), hose and half hose (wool and cotton), sweaters, toques, heavy wool gloves. These should be allowed to mix and make up a carload.
CLOTH–and garments made from same.
VELVETEENS, VELOURS, cotton velvets and cotton comforters, should be allowed to mix with cotton piece goods.
Blankets and Boots could not mix with other lines.
Concerted effort on the part of shippers should result in these reasonable, logical and necessary changes being made in the proposed new classification (No. 17). In the case of the Company, the adoption of suggested amendments along above lines would result in marked savings on freight charges for at least three of the four larger H.B.C. stores.
It may be said that the Company in some instances could not make up carloads of its own merchandise. Granted that this is possible, there are a large number of forwarders in every city of importance and it is not difficult to have smaller packages included at carload rates.
| TABLE 1 | |||||
|---|---|---|---|---|---|
| Load (lbs.) | Class | From | To | Freight | Saving |
| 18,000 | 1st L.C.L. | Montreal | Winnipeg | $520.20 | |
| 18,000 | 3rd C.L. | Montreal | Winnipeg | 347.40 | $172.80 |
| 18,000 | 1st L.C.L. | Montreal | Calgary & Edmonton | $894.60 | |
| 18,000 | 3rd C.L. | Montreal | Winnipeg, Calgary & | ||
| thence by | 3rd C.L. | Winnipeg | Edmonton | 634.50 | $260.10 |
| 18,000 | 1st L.C.L. | Liverpool | Winnipeg | $736.20 | |
| 18,000 | 3rd C.L. | Liverpool | Winnipeg | 482.40 | $253.80 |
| 18,000 | 1st L.C.L. | Liverpool | Calgary & Edmonton | $1110.60 | |
| 18,000 | 3rd C.L. | Liverpool | Winnipeg, Calgary & | ||
| thence by | 3rd C.L. | Winnipeg | Edmonton | 769.50 | $341.10 |
| TABLE 2 | |||||
| Load (lbs.) | Class | From | To | Freight | Saving |
| 18,000 | 1st L.C.L. | Liverpool | Calgary & Edmonton | $1110.60 | |
| 18,000 | 3rd C.L. | Liverpool | Winnipeg, Calgary & | ||
| thence by | 1st L.C.L. | Winnipeg | Edmonton | 909.90 | $200.70 |
| TABLE 3 | |||||
| Load (lbs.) | Class | From | To | Freight | Saving |
| 18,000 | 1st L.C.L. | Montreal | Vancouver | $1110.60 | |
| 18,000 | 3rd C.L. | Montreal | Winnipeg | ||
| thence by | 1st L.C.L. | Winnipeg | Vancouver | 1322.10 | $211.50 |
As at present possible on Groceries, for example, we can cite an instance of freight being saved by taking carload rate to Winnipeg and thence to Calgary or Edmonton through a forwarder. Below is a statement of a shipment which moved recently:
OLD WAY–1 barrel of Pickles, 140 pounds, Liverpool to Calgary, L.C.L. rate, at $5.81.........................$8.13
NEW WAY–1 barrel of Pickles, 140 pounds, Liverpool to Winnipeg, C.L. rate and Winnipeg to Calgary, C.L. rate, including forwarding charges at $3.04½.........................$4.68
The saving of freight on this barrel of pickles alone was $3.45.
Table No. 1 above shows class rate comparisons and will make clear the savings possible on drygoods shipments under proposed new grouping and loading.
Supposing in some cases it were not possible to make up a carload of drygoods for Calgary or Edmonton, shipments from Liverpool to Winnipeg in carloads and thence to the Alberta points by first class or less than carloads would still show an appreciable saving as indicated by Table No. 2.
Due to our inability to make up carloads from Winnipeg to Vancouver–and the combined carload rate from Montreal to Winnipeg and L.C.L. rate from Winnipeg to Vancouver being larger than the through L.C.L. rate from Montreal to Vancouver–this saving in freight cost would not be felt on Montreal or Liverpool shipments of drygoods to Vancouver. The reason for this is indicated in Table No. 3. The comparatively lower through L.C.L. rate from Montreal to Vancouver is made to meet competition with the slower but cheaper water route via the Panama Canal.