14 MASS. EXPERIMENT STATION BULLETIN 363 



Trucking Rates 



Few products, farm or industrial, show as much variation in the prevailing 

 rates for transportation as milk. That this situation can exist is due entirely 

 to the characteristics of the industry. No business other than milk has so close 

 a relationship between the buyer or seller and the carrier. In many instances 

 the carrier is either buyer or seller. Under such conditions, the net profit from 

 the business as a whole is the chief concern and the transportation of milk may 

 actually be carried on at a loss, or city distribution may be conducted at no 

 profit with cartage operations providing the principal source of income. 



Certain operating problems which have been mentioned as influencing service 

 may influence rates: wide seasonal variation in shipments, generally small in- 

 dividual shipments, farmstead service to shippers, the collection of all market 

 milk in the area, and a greater supply than can be utilized by the fluid market. 



Though the milk transportation service has the characteristics of a common 

 carrier in that the service must be provided daily and at a regular time over a 

 regular route, the convenience of service applies to each dealer rather than to 

 the industry, with the result that the common carrier aspect at present has little 

 bearing on rate making. 



Eleven different rates were in force during the early part of 1935. The prac- 

 tical extremes were 20 and 463^ cents. Only one route really had a scale of 

 rates. Several of the rates were used by two or more routes. The most common 

 rate, from- the viewpoint both of the dealers using it and the producers to whom 

 it applied, was 35 cents per hundredweight. Table 5 shows the picture in detail. 



Table 5. — Rates Paid per Route, 1935 



Number Total Number of Producers per Route 

 Rate of Producers 



Routes 



10 



13 



14 



Total 122 13 18 10 4 17 29 



The causes for such a variety of rates ir: so small a section are in part self- 

 explanatory. Since each route but one had a common rate applicable to all 

 producers on the route, sufh items as size of average daily deliveries, butterfat 

 test, location of farm, and distance of the farm from the plant could have had no 

 specific bearing on the rate as applying to a particular farm. Nor were these 

 factors responsible for the differences in rates which existed among routes. With 

 physical factors eliminated, it must be concluded that rates were arbitrarily set. 



