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March
2006
FAILURE TO ESTABLISH
IN-TRANSIT ARRANGEMENTS
The use of this special provision in tariffs is an
old procedure which covered such things as weighing,
milling, marking, packing, storing, inspection etc.,
while the products were shipped to an intermediate
point for the performance of any of the sort of
value added services listed above. Generally the
local rate was paid to the intermediate point. When
shipped to the final destination the difference
between the through rate from the original point of
shipment to final destination less the amount
previously paid to move the product to the
intermediate were paid to complete the transaction.
There was a requirement to maintain all records
necessary to be able to identify the shipments made
to the intermediate point and which were eligible
for the discounted total charges. This arrangement
tended to keep shipments tied to the mode that
published such arrangements, most often railroads.
This procedure is gradually being replaced with
appropriate contract arrangement. However, with so
many consolidating of services being performed by
third party service providers today, this sort of
arrangements should be reviewed for possible
application. The “Make to Order” services being
offered by computer companies such as Compaq, Dell
and Gateway would fit this sort of scenario,
although I doubt seriously that these companies ever
considered this approach! There is a value attached
to this arrangement to the transportation company or
the 3rd. party Logistics service provider, since the
payment of transportation charges to the
intermediate point assures them of a future
“captive” haul to the final destination and storage
and handling charges will accrue on the product
while it was awaiting final release. This is the
primary reason why the carrier’s or 3rd. party
Logistics service providers should have an interest
in this sort of arrangement. This arrangement is
normally the Logistics group that has the primary
responsibility along with others shown in “Team List
C”. |
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TransAnalysis
291 McGowan Street
PO Box 5060
Fall River, MA
02723-0404
Phone: 508.646.1000
Fax: 508.646.1100
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