MILK CARTAGE 15 



On the single route where a scale of rates was operative, two factors seemed 

 to be related to the trucking rate: location and distance. Each rate applied to 

 a group of producers in a locality and to this extent exhibited a degree of con- 

 sistency. The differences in group rates were in all instances but one related to 

 distance from plant. The one exception was a group in a locality where the com- 

 petitive situation was very pronounced. Size of average daily deliveries may also 

 have had an indirect bearing on this group's enjoying the lowest rate. One 

 shipper in the group had the highest average daily delivery of all the producers 

 on the dealer's payroll. He may have been granted the low rate because of this 

 volume, and the other producers in the neighborhood given the rate because the 

 dealer saw the desirability of having a uniform rate apply among neighbors. 



Since rate variation exists chiefly among routes rather than among producers 

 on the same route, milk prices were analyzed as being possible causes for the 

 prevailing differences. Little or no relationship existed between average net 

 prices, whether actual or 3.7 basis, and trucking charges. The only apparent 

 relationship is between the adjusted maximum f. o. b. price 3. 7 basis and cartage 

 rates. 



The maximum prices received by the groups pa>ing the different trucking 

 rates had a much narrower range than the f. o. b. prices — 14 and 27 cents per 

 hundredweight respectively. Had trucking rates been uniform, the range in 

 maximum net 3.7 prices would have been the same as the range in f. o. b. prices. 

 Since the trucking rates were not uniform and the highest rate was 13 cents greater 

 than the difference in f. o. b. prices, the range in net prices was reduced to 14 

 cents. The rates and prices are shown in Table 6. 



*The trucking rate? of 36 records were so widely scattered that no significant grouping of data 

 was feasible. 



The lower spread in net prices would indicate a rate structure based on what 

 the traffic will bear. The dealers paying the higher prices for the most part 

 charged the higher rates for cartage so that producers enjoyed only part of the 

 benefits of selling to dealers able to pay higher prices. 



Transportation rates are regarded as one of the inflexible prices in the distribut- 

 ing system. Rigidity of this kind is usually measured over a period of years, but 

 no analysis for a period of such duration has been made for this section. Con- 

 sidered solely from the standpoint of twelve months, cartage rates showed little 

 tendency to vary. 



