6. Financing Payments for 

 Tank Trucks 



Commercial banks provided selec- 

 tive credit for the purchase of tank 

 trucks at a 6 percent interest rate 

 on the unpaid balance. Approximate- 

 ly half of the owners intended to 

 pay for the tank truck entirely from 

 earnings on the milk routes. The 

 other purchasers expected to con- 

 tribute to payments from other 

 sources of earned income until the 

 routes were built up. 1 



7. Rejection of Milk 



In all cases the driver of the tank 

 truck had the initial responsibility 

 for rejecting milk. In a third of the 

 cases studied this responsibility was 

 shared with the dealer's fieldman. In 

 cases where milk had been rejected 

 by dealers the odor of milk was the 

 predominant reason, followed by 

 dirty tank and high bacteria count 

 because of inadequate cooling. Few 

 cases of rejection were found. 



1 See Table 40, in Appendix I. 



X. Comparison of Milk Transportation Rates Charged 

 by Various Modes of Transport 



1. Tank Truck Assembly 

 Rates Lower than Can 



Producers pay transportation 

 charges from the farm to the process- 

 ing plant. The farther a producer is 

 located from a dealer the greater the 

 cost of shipping his milk and the 

 lower the net price received by the 

 farmer. There are, of course, in- 

 dividual exceptions to this rule when 

 the transportation charge is reduced 

 by the dealer as a form of supple- 

 mentary payment for milk. 



The relationship of distance to 

 rate per cwt. 1 for trucks carrying 

 cans is illustrated in Figure 5 and 

 Table 32. The rates for distances of 

 about 6 miles in the three state area 

 varied from 10 cents to 35 cents per 

 cwt. The average rate for such a dis- 

 tance was about 18 cents per cwt, 

 This increased with the distance, but 

 not in proportion to distance, up to 

 50 cents per cwt. for 50 miles and 

 over. (The average rate per cwt. is 



expressed in the regression equation 



Y = 14.6 + 0.64 X. 



Y = rate in cents per cwt. 

 X = miles.) 



The rate per cwt. for tank trucks 

 was somewhat lower. 1 For the initial 

 6 miles, 16 cents per cwt. was aver- 

 age for the three state region. The 

 increase in rates for longer hauls, 

 however, was less rapid than for the 

 can trucks and averaged 39 cents for 

 50 miles. The rate/mile relationship 

 is given in Figure 5 (with a rate re- 

 gression estimate of Y = 15.6 -f- 

 0.44 X). 



The rates shown in Table 32 show 

 a distance of about 6 miles as the 

 most common length of haul from 

 farm to plant, in both can and bulk 

 assembly. Nevertheless, the same 

 table shows 20c per cwt. as the most 

 common rate charged by can truck- 

 ers, and 15c per cwt. as the most 

 common charge by tank truckers. 



1 For both tank and can trucking, the rates in the comparison omit any supple- 

 mentary payments to the trucker by the dealer. 



31 



