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.