Railroad Mileage Freight Rates

• Author: J. Haden Alldredge
• DOI: 10.1177/000271623417100125
• Published date: 01 January 1934
• Date: 01 January 1934
• Subject Matter: Articles

Railroad Mileage Freight Rates
By J. HADEN ALLDREDGE
AS THE term itself implies, mileage the result of a fixed policy or not, it is
rates
are rates that gradually
unquestionably true that mileage scales
increase or decrease-depending upon
have been employed more extensively
whether the scales are read progres-
in rate revisions in the last several years
sively or regressively-in direct rela-
than ever before.4
4
tion to distance. While mileage rates
DIVERGENT VIEWS
are invariably constructed in the form
of scales, they are not always actually
This definite trend toward mileage
published in such form.2
2
scales has created a sharp divergence of
The mileage principle is frequently
views among shippers, shippers’ traffic
observed in the construction of express
representatives, and railroad traffic
rates and passenger fares as well as
men throughout the country. Many
freight rates, but this discussion will be
traffic men strenuously object to the
limited solely to freight rates.3
general use of mileage scales in making
Mileage scales are not new in rate
rates, but others may be found who are
construction. They have been used in
just as strongly in favor of it.
this country since the beginning of rail-
It is undoubtedly true that any ex-
road transportation; but their principal
tensive rate revision nearly always
field of operation, until recent years,
creates business disturbances, and it
has been limited to short-haul traffic,.
is entirely possible that some of the
The new element in the situation is the
apprehension about the widespread use
employment of such scales in general
of mileage rates among those not famil-
rate revisions where long-haul as well
iar with the technicalities of rate con-
as short-haul traffic is involved.
The
struction may be due to an exaggerated
Interstate Commerce Commission has
fear of the ultimate consequences of
used mileage scales as the basis for
such disturbances. Experienced traf-
many widespread rate revisions in
fic men, however, generally base their
recent times. Whether this has been
4
The following are typical cases in which the
1
Mileage rates are sometimes called distance
Interstate Commerce Commission has approved
rates.
or prescribed mileage scales as the basis for
2
Mileage rates may be published in the form
general rate revisions in recent years:
of mileage scales with distance tables annexed,
National Paving Brick Mfrs.’ Ass’n v. A. & V.
as point-to-point rates, or by using the scales
Ry. Co., 68 I. C. C. 213; Southern Class Rate
between base points and grouping contiguous
Investigation, 100 I. C. C. 513; Fertilizer and
points with such base points. The basis of con-
Fertilizer Materials between Southern Points,
struction, rather than the method of publication,
113 I. C. C. 389; Rates on Chert, Clay, Sand and
determines whether a given rate is a mileage
Gravel, 122 I. C. C. 133; Consolidated South-
rate or some other kind of rate. As a general
western Cases, 123 I. C. C. 203; Lime Between
rule, mileage tariffs are confined to short-haul
Southern Points, 129 I. C. C. 635; Southern
traffic. Rates for the longer distances, even
Cement Rates, 132 I. C. C. 427; Ohio Farm
when based upon mileage scales, are invariably
Bureau Fed. v. A. &
W. Ry. Co., 146 I. C. C. 419;
published as specific rates.
Krupp Foundry Co. v. Sou. Ry. Co., 148 I. C. C.
3
What is said herein might apply with equal
743, 156 I. C. C. 415; Rate Structure Investiga-
force to both motor-vehicle freight rates and rail-
tion, Part 6, Iron and Steel Articles, 155 I. C. C.
road freight rates, but rates of the latter charac-
517; Western Trunk-Line Class Rates, 164 I.
ter have formed the historical background for
C. C. 1; Eastern Class Rate Investigation, 164
this discussion.
I. C. C. 314.
185

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186
opposition to the use of mileage rates,
8. The use of mileage rates does not
where such opposition exists at all, up-
give adequate recognition to the com-
on more solid and substantial grounds.
petitive forces that are constantly at
As one might readily infer from the
work in the commercial world, and fails
fact that both advocates and opponents
to accord sufficient influence to legiti-
of mileage rates are to be found within
mate ratemaking factors other than the
the ranks of the leading traffic men of
cost of service.
the country, there are two sides to this
In support of this argument it is
question. A fair discussion of the
claimed that business must be carried
subject, therefore, calls for a presenta-
on under competitive conditions; that
tion of the arguments of both sides.
there is no way for business to avoid the
influence of competition; that compe-
ARGUMENTS AGAINST MILEAGE RATES
tition does not follow geographical lines
In so far as the writer has been able
or conform to variances in distance;
to ascertain from careful investiga-
and consequently that a system of
tion, the principal arguments advanced
rates which adheres rigidly to distance
against the widespread use of mileage
frequently cuts across the usual trend
rates are these:
of business and resists the normal flow
1. Mileage is not always an accurate
of traffic., to the detriment of the in-
or reliable measure of the cost of trans-
terests of both the carriers and the
portation service, which is one of the
public.
major elements entering into the rea-
The law as interpreted by the courts
sonableness of rates.
and by regulatory commissions recog-
As a general proposition it would be
nizes several...