Deregulation Of The Shipping Industry Essay

778 Words Oct 21st, 2016 4 Pages
Article Overview With deregulation of the shipping industry, companies began to calculate their own base rates for transportation of goods. Distance of transport is a major portion included as part of the transportation equation, but aspects such as weight, shape, fragility, and type, are also taken into consideration when determining a rate. With this in mind, we must note that the lowest cost may not always be the best deal when it comes to shipping, One specific that must be identified in determining rates charged is the classification. A generic system has been established by The National Motor Freight Classification (NMFC) system that categorizes goods into eighteen groupings made by weight. The classifications help determine pricing, because dense freight uses space adequately. Another consideration is the composition of a product. If the product can’t be stacked or may easily break, this reduces the amount of space that can be used. Wasted space means that the carrier needs to be compensated for lost revenue. Additionally, if there is a high cost to the product or potential liability, cost is adjusted accordingly because there is extra accountability to make sure that goods are delivered appropriately. Routing is also a consideration when determining price rates. If a direct route is available, then there are no additional cost to the carrier. However, stops, layovers, and changes could involve increased risk, added equipment, or additional manpower. These are…

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