﻿LIVE-STOCK SHIPPING ASSOCIATIONS. 37 



misjudges frequently. A thorough knowledge of the different 

 markets, the relative costs of shipping to them, and other factors 

 concerned are essential on the part of the management i I' the greatest 

 possible success is to be achieved. Some managers shift the respon- 

 sibility for the choice of markets to the shippers themselves or to 

 the shipper who owns the bulk of the load. 



Distributing t/ie total expenses among the shippers. — Little uni- 

 formity exists in the methods used in distributing the expenses 

 among the shippers. This is true whether the prorating is done at 

 home or by the sales agency. In the case of some of the older asso- 

 ciations, particularly in the Northwest and in some of the Corn-Belt 

 States, all of the expenses are added together and charged to the 

 shipper at so much per 100 pounds. In other cases the attempt of 

 the cooperator to obtain the actual market value of his stock less 

 the actual expenses of marketing, seems to have been interpreted as 

 meaning that the member's statement must show in dollars and cents 

 how much he has contributed toward each of the six to a dozen 

 different items of expense, calculated on two or three different bases. 

 Between these two methods there exists a wide range of variations. 



Under the method of prorating illustrated in the following pages 

 all expenses are added together, irrespective of the basis on which 

 charge was made against the shipment as a whole, and divided among 

 the shippers equally on the weight basis. The advantages of this 

 method are: 



(1) The work involved in prorating is reduced to the minimum, as 

 only one calculation is necessary in determining the amount of ex- 

 penses to be charged each shipper, compared with the large number of 

 calculations involved in the detailed method of prorating. The extra 

 work involved in prorating is reflected in the extra charge of $2 to 

 $6 per car made by commission firms for handling cooperative ship- 

 ments. 



(2) The distribution of expenses among the shippers is as fair on 

 the average as is practicall}' possible. Inasmuch as each 100 pounds 

 of livestock in a shipment receives practically the same service, it 

 seems logical to distribute the expenses on the weight basis. 10 Effi- 

 ciency in marketing calls for handling the shipment in such a manner 

 as will yield the highest possible net price per 100 pounds for the 

 entire shipment, rather than striving for individual accounting of 

 each shipper's stock at any cost. 



(3) The single-rate method of prorating conveys to the shipper in 

 an emphatic manner the factors which determine the financial results 

 of the shipment, i. e., the weight and shrinkage, the selling price, the 

 total expenses in dollars and cents, and the rate per 100 pounds. It 

 is believed the educational benefits of cooperative shipping can be 

 realized more fully by presenting the detailed information regarding 

 expenses, etc., in the form of comparatively monthly summaries than 

 by presenting them on the individual member's statement. Variations 

 in expenses, losses, and shrinkage can be explained more satisfactorily 

 when based on more extensive data than a single shipment affords 



10 It is sometimes urged that it is only fair that the expenses should be passed on to 

 the shipper on the same basis as they were actually incurred. Carried out to its logical 

 conclusion, this would necessitate the determination of the amount of feed actually 

 consumed by each lot of live stock separately. It would mean weighing by ownership 

 to determine actual shrinkage by lots. It might even mean that shippers should assume 

 the risk of losses individually. 



