even though they are of a similar nature, nor do they apply between
points not specified in the special tariff. A commodity rate is, in
effect, a special rate; it offers special inducements for the shipment
of certain commodities, but is not intended to favor any one shipper.
The commodity rate is for the benefit of all shippers of the commodity
named.
The volume of traffic is the chief factor in establishing rates,
either regular or special. It is an especially important factor in
establishing a commodity rate. In a given community, some one commodity
may be produced in large quantities. Perhaps it is a raw material which
must be transported to certain manufacturing centers. To encourage
the development of the industry, thereby creating a large volume
of traffic, the railroads leading from the point where the traffic
originates establish a commodity rate to other points, where the raw
material can be used to advantage by the manufacturer. Or, perhaps,
important manufacturers are located on other roads, in which case
connecting lines join with the originating road and issue what is
known as a _joint tariff_. This enables the producer to deliver his
raw material to the manufacturer on favorable terms, when to pay class
rates might compel him to abandon the enterprise, with a consequent
loss of traffic to the railroads. This discriminates against no one,
since every shipper of the particular commodity between the points
named is entitled to the special commodity rate.
Frequently, however, a commodity rate exists between certain points
which might, under certain conditions, be taken advantage of by a
shipper located at a point outside of those named in the commodity
tariff. For illustration, a manufacturer in Peoria, Illinois, is
shipping a commodity on which a special rate is granted between Chicago
and Milwaukee, but takes a class rate from the point of shipment. He
makes a shipment to Milwaukee and pays the through class rate provided
from the point of shipment, when by proper billing he would have paid
the class rate to Chicago, and secured the benefit of the commodity
rate from that point to Milwaukee. A lack of knowledge of commodity
rates in effect in the manufacturer's territory has resulted in an
unnecessary expense--a loss of money.
The claim might be made that the billing clerk at the local freight
office should have given the shipper the benefit of the lowest rate.
But he will fall back on the classification and be prepared to show
that he has given the only rate quoted on shipments from Peoria to
Milwaukee, which is the class rate. It is no part of his duties to
keep posted on commodity rates granted by another road, while it is
distinctly to the interest of the manufacturer to know of the existence
of all such rates applying to his product.
=Freight Tariffs.= The Interstate Commerce Act provides that two copies
of every freight tariff issued by the railroads shall be placed on file
at each freight office, for the inspection of the public. Since the
rates must be made public, the railroads do not object to supplying
shippers with copies of the tariffs applying to their product. Through
the local freight agent, copies of all tariffs applying from the point
of shipment can be obtained.
It has been shown that, in the case of commodity rates, copies of
tariffs from the point of shipment are not always sufficient. It is
necessary to obtain, from connecting lines reaching the territory
in which the trade of the house lies, copies of all special tariffs
applying to the commodities shipped. The freight departments of all
railroads, through their solicitors, make a practice of supplying
copies of all regular and special tariffs to all large shippers on
their lines, and to shippers on connecting lines who are in a position
to divert traffic to them. Any shipper who has been overlooked, should
write to the freight departments of all lines in his territory asking
to be placed on the mailing list to receive copies of all tariffs
affecting his product. By doing this, he will secure copies of all such
tariffs as soon as issued.
The subject of commodity rates is one of the most vexing with which the
shipping clerk has to deal, as it is also one of the most important. To
compile a complete file of special tariffs, involves close study and
much labor. But when once done, it can be kept up-to-date with little
difficulty, and the saving resulting will far outweigh the cost.
=Filing Tariffs.= The manner in which freight tariffs coming into the
office are filed is important, for unless properly filed and indexed
they are likely to be of little value. The filing system must provide
for quickly locating any tariff, and for locating all tariffs that may
have a bearing on a particular case.
In the average shipping clerk's office, it is not uncommon to find the
tariffs dumped into a drawer, without regard to their order, or hung on
a hook on the wall. When a rate is wanted, it is necessary to search
through the tariffs until one giving the rate is found. The chances are
that the first rate found will be used, regardless of the fact that
another tariff shows a special and lower rate.
[Illustration: Fig. 1. Vertical File of Indexed Folders for Railroad
Tariffs]
A very satisfactory file for freight tariffs is the vertical file,
and one drawer will hold all of the tariffs required by the average
shipper. If a two-drawer cabinet is provided, the shipping clerk will
usually find other uses for the extra drawer.
Each railroad whose tariffs are on file should be assigned a folder,
and the folders should be filed alphabetically under the names of
the railroads, as shown in Fig. 1. All tariffs from one railroad
should be filed in the folder assigned to that road, and arranged
according to their numbers. All railroads number their tariffs and,
in correspondence, refer to them by number. Reference to the tariffs
will be facilitated, therefore, if those of each railroad are kept in
numerical sequence.
Loose-leaf binders are sometimes used for filing tariffs, but not all
tariffs are in proper shape for punching to fit the binder. Another
disadvantage in using a loose-leaf binder is that freight tariffs are
not uniform in size, resulting in an awkward, unwieldy book. For these
reasons, the vertical file is found more satisfactory.
=The Index.= Since the tariff folders are filed in alphabetical
sequence, no index is required to locate the tariffs of a given road,
but a cross-index to locate all tariffs that apply to a given point, is
a necessity. This index should be in card form, a card being used for
each town to which the house ships, or is likely to ship, its products.
[Illustration: Fig. 2. Cross-Index to Tariff File]
A very satisfactory form of card for this cross-index is shown in Fig.
2, which also shows the manner of filing. At the head of the card is
the name of the town, and the name of the railroad on which it is
located. Below the heading, the first column shows the names of all
railroads issuing tariffs to the town in question, whether or not the
town is located on the road. Following this are columns for the number
of the tariff and for either commodity or class rates. These cards are
filed in the same manner as the tariff folders--alphabetically by names
of the railroads. A guide card is provided for each road and all cards
representing towns on that road are filed in alphabetical order behind
the guide card.
[Illustration: Fig. 3. Card for Class Rates]
Suppose a rate is wanted from a point on the Delaware, Lackawana &
Western, to a point on the Burlington. Reference to the Burlington
tariffs does not give the rate, for the reason that the Burlington
does not issue tariffs from points on the D. L. & W., but reference
to the card shows that four roads issue tariffs from Buffalo to
Burlington points, one of them being a commodity tariff. Reference to
the commodity tariff shows that the special rate applies from a point
in Ohio to Chicago, a connecting point with the Burlington. By proper
routing, this special rate can be taken advantage of, class rates
applying the balance of the distance. Without the index, it would be
necessary to look through several folders, with the possibility that
the special tariff might be overlooked.
=Condensed Rate File.= A condensed rate file covering a definite
territory will prove a convenience to most shippers. The trade of most
houses is confined to a certain definite and rather limited territory.
A manufacturer may make an occasional shipment to a point outside of
his regular territory, but, as a rule, his shipments will be confined
within certain limits. This is even more true of the jobber and the
wholesaler.
If a special rate file, covering the particular territory in which
the shipper's trade lies, is prepared, it will be found convenient
for reference, and will save consulting the tariff files whenever a
rate is wanted. Such a file can be arranged on cards, or in a small
loose-leaf book. One card or sheet should be used for each town, the
name of the town being written at the head of the card.
[Illustration: Fig. 4. Card Index for Classifications]
The card should show the rates for all classes from the shipping point
to the destination, as well as the route. It may be necessary to record
rates from more than one shipping point. A manufacturer may have two or
more shipping points, and it is important to know from which points he
can secure the most favorable rates. It is also advisable to include
the shipping points of the chief competitors, that they may be given
due consideration in meeting competition.
Fig. 3 shows the form of card for this rate file. The cards should be
filed alphabetically, and it is well to include cards for some of the
principal towns outside of, but convenient to, the regular territory.
The rates for the different classes, rather than on specific articles,
are given for the reason that the classification is more likely to
change than the rate. If the rate on a certain article is given, and
the classification of that article is given, should the classification
of that article be changed, it would be necessary to rewrite the
entire index. It is much less difficult to change the record of the
classification of one article than to revise all of the rates.
=Classification Index.= For convenient reference, the shipping clerk
should prepare an index showing the classification of all articles
that he is obliged to ship. This classification index should be on
cards or in loose leaf, whichever is used for the rate file. One sheet
is used for each article, the name of the article being written at the
top.
[Illustration: Fig. 5. Card for Commodity Rates]
The record should show how the article is packed, the class, and the
classification in which it is found. As has been stated, more than
one class may apply to a given article, depending on the manner of
packing; an article may take the first-class rate if boxed, or double
first-class if crated. In such cases, both classes with the manner of
packing should be shown.
These classification sheets should be filed alphabetically in the
file used for the rate cards, and they should be printed on stock of
a different color. Most shippers will need but a few of these sheets
as the number of articles shipped by one house is small, as a rule. If
a large number of articles is shipped, the classification index is of
even greater importance. A suitable form for this index is shown in
Fig. 4.
=Commodity=Rate File.= When any part of the goods shipped are subject
to commodity rates, a file of commodity rates is fully as important
as class rates. A commodity-rate file is arranged on similar lines
to the file of class rates. A card or sheet is used for each town to
which commodity rates apply, and the cards are filed alphabetically by
names of towns. These cards can be filed with the class rates, but a
distinctive color should be used.
The record should give the names of the articles taking commodity
rates, manner of packing, the point from which the rate applies, the
rate, the number of the tariff, and the name of the issuing railroad.
On the line below the name of the town appears the caption, _see
also_. This is for the name of some other point to which a commodity
rate applies. Boone, Iowa, for instance, may not be a commodity point,
though a special rate from Chicago to Clinton is in effect. The Boone
card would refer to Clinton, and the card for that town would show the
rate. Fig. 5 shows a form for commodity rates.
To compile such a record of rates as has been described, requires an
initial expenditure of much labor, but is a profitable investment. When
once compiled, changes can be recorded with little trouble. These files
will always be valuable for reference, not alone to the shipping clerk
but to the sales manager and the purchasing agent as well.
A comprehensive knowledge of classifications and rates will prove
valuable not only to the shipper, but to the receiver of freight.
It will save any merchant many dollars in freight charges on goods
purchased f. o. b. point of shipment. The shipper may not pack his
goods in a manner to secure the lowest rate, or he may not give the
proper description in the shipping bill. If his attention is called to
the matter by a customer, he probably will make the necessary changes
in his methods.
Even the proprietor of a small retail business will find a study of
this subject a paying investment. The writer has knowledge of a case
in which the owner of a general store saved some $165.00 in one year
by carefully checking every freight bill received, making claims for
overcharges, and watching the packing and routing of his goods. Surely
that amount would be worth saving, even to a house transacting a much
larger volume of business.
=Routing Shipments.= One of the most important duties of the shipping
clerk is the proper routing of his shipments. Like classifications
and rates, the subject requires careful study. In too many cases this
subject receives little attention, but by exercising care in routing
shipments, the shipping clerk can be of material assistance to the
sales department, and, incidentally, to the customers of his house.
Routing frequently affects the rate. It might appear logical to suppose
that the rate between two given points would be the same, regardless
of the route; but this is not the case. Of two routes to a given point,
one may be longer than the other. If shipping and destination points
happen to be in different states, the provision of the Interstate
Commerce Act which forbids a higher rate for a short haul than for
a long haul comes into play. Similar provisions applying to local
shipments, are found in the laws of certain states. In Iowa, for
instance, such a provision covers the transportation of passengers as
well as freight. One railroad is not permitted to meet the competition
of another having a shorter route between two points, but must base
its rate on the mileage. All of which goes to show the necessity of
considering the length of the haul in routing shipments.
The above conditions apply especially to shipments taking class rates,
but when goods which take commodity rates are to be shipped, the
question of routing is of even greater importance. It has been shown
that a commodity rate may be in effect between two points on one road,
or two or more roads may have issued a joint tariff which can be taken
advantage of. The question of commodity rates, therefore, has a most
important bearing on the routing of shipments.
Another factor that has a bearing on the routing is _basing points_,
which necessitates a knowledge of the points on which rates are based.
In the territories governed by the different classifications, certain
common points are used for basing rates. On shipments from the central
states to southern territory, rates are based on Ohio River points,
while, to western territory, they are, in many cases, based on Missouri
River points. Class rates from Chicago to all Missouri River points
are, as a rule, the same over all roads, but, to points beyond the
Missouri River, rates may vary from the different basing points; that
is, the rate from Omaha to a western point may be less than from Kansas
City, though the rate to these basing points is the same.
The alert shipping clerk will learn the basing points in the territory
to which he is shipping goods--which he can do by consulting local
freight officials--and will then secure tariffs from these basing
points to the towns he wishes to reach. This information he will
incorporate in his rate files.
Not least of the factors which should be considered in routing
shipments, is the accommodation of the customer. It is frequently
the case, that of two roads entering a town, the freight house of
one is more conveniently located for the shipper. Rates being equal,
shipments should be routed over the road from which the customer's
cartage charges are the lowest. Or the customer may have a sidetrack
to his warehouse from one road, which makes no switching charge, while
on every car shipped over another road a switching charge must be
paid. This charge may offset an advantage in rates. It always pays to
accommodate the customer. When the wishes of the customer are known,
they should be granted, within reasonable limits, even though it
involves extra expense.
FILLING ORDERS
In all large concerns the filling of orders--that is, the assembling
of the goods--is done by the stock department. The subject is here
discussed in connection with the shipping department for the reason
that in many houses all orders are assembled under the direction of the
shipping clerk; in others he is also the stock keeper or stores clerk.
This discussion refers more especially to the filling of orders in
a jobbing house, or a manufacturing business which carries goods in
stock. It does not refer to those manufacturing enterprises whose
orders are for goods to be manufactured.
As a rule, all orders of a jobbing house should be filled the day they
are received. If they cannot be filled complete, they should be filled
as nearly as possible, and missing articles handled as explained later
under the subject of _Back Orders_.
There is a great chance for time saving in most houses in filling
orders. In many houses, too little consideration is given to the
handling of goods in a manner that will save time in assembling orders.
Lack of a logically planned system is responsible for much of the
confused and confusing rush in the average shipping room, about the
time that orders should be delivered to the transportation companies.
Here is a case in point which came under the observation of the writer.
A certain jobbing house, handling drugs and druggists' sundries,
occupied a five-story building. On each floor there was a stock room in
charge of a stock man, who, with the aid of such helpers as he needed,
kept the stock in proper shape, and assembled the goods required from
his floor to fill orders.
In the drug business, the average order received from a retailer calls
for a large number of articles--it is made up of small items. This
is especially true of orders brought in by the traveling salesmen. As
a consequence, the larger part of the orders received by this house
called for goods from practically every floor.
The custom was to send orders first to the floor farthest from the
shipping room--that is, to the fifth floor. The stock man assembled the
goods required from his floor, placed them in a basket with the order,
and sent them down to the fourth floor. Each order went from floor to
floor and finally reached the shipping room--perhaps being held an hour
on one floor for a single article because of other orders ahead.
A result of this method was that, in the morning, the stock men on
the upper floors were rushed, while those on the lower floors had no
orders to fill, except those calling for goods from one floor only.
In the afternoon, the conditions were reversed. Then the men on the
upper floors had nothing to do but put their stocks in shape; those
on the lower floors were busy filling orders. These conditions were
not particularly objectionable so far as the stock men were concerned,
as they were profitably employed, when not filling orders, in caring
for their stocks; but in the shipping room great confusion resulted.
Goods required to fill the day's orders did not begin to come into the
shipping room until late in the day, and then they came with a rush.
Hurried packing resulted in mistakes, caused disputes, and lost good
customers.
To overcome the difficulty, a new plan which worked admirably was
perfected. A chart was prepared, along the lines of the one shown in
Fig. 6. On this chart, a section was set aside for each floor, and in
the first column the classes of goods stored on each floor were listed.
In the next two columns a few of the articles in each class--enough to
serve as a guide--were listed, and the last column showed the floor
_B_, meaning the basement. On this chart, the location of any class of
goods could be seen at a glance, and in case of doubt about the class
to which an article belonged, reference to the catalogue issued by the
firm gave the desired information.
A copy of the chart was given to the order clerk, who entered all
orders on a billing typewriter. In entering the order all articles
were grouped by floors, starting at the fifth floor. Below the list of
articles from each floor a space was left, the first entry for the next
floor being on the second line below.
[Illustration: Fig. 6. Floor Chart for the Classification of Stock]
Two copies of the order were provided for the use of the shipping
clerk. When the orders reached his desk, he cut one copy into parts,
as represented by the floors from which goods were to come. After
entering the order number on the margin of each, he sent these sections
to the stock men. Each man assembled the goods required from his floor
and sent them, with his section of the order blank, directly to the
shipping room. Here they were checked against the shipping clerk's copy
of the order, and, as soon as all sections had been filled, the order
was ready for packing. This resulted in distributing the work more
evenly, and kept the goods coming regularly to the shipping room.
Another method of accomplishing the same result is to make as many
copies of the order as there are floors, the complete order being sent
to each stock man, who fills only his part. An advantage of dividing
the order sheet, as explained, is that the stock men have no knowledge
of the names of customers. This prevents a stock man from taking a list
of the firm's customers to another house--an occurrence which is not
entirely unknown.
=Back Orders.= Most concerns find it impossible to fill all orders
completely; there are occasional shortages in every house. In such
cases, it is the usual custom to fill all orders as nearly as possible,
and forward the items that are short as soon as they are in stock, or
with a later shipment.
The possibility of these items being overlooked must be provided
against, and this is done by entering all items that are short on a
new order. This is known as a _back order_. The back order should be
made in duplicate and should be printed on stock of some distinctive
color that will not be confused with the regular order blanks. For
convenience in filing, it should also be made the same size as the
regular orders.
If the number of back orders is very large, a separate series of order
numbers is used, but most concerns do not have a sufficient number of
such orders to make this necessary. The more usual custom is to give
the back order the same number as the original of which it is a part.
Of the two copies of the back order, one goes to the shipping clerk,
while the other is kept in the office. The office copy is used to
follow up the shipment of the order. It is necessary for the shipping
clerk to know immediately when goods required to fill back orders are
received. When a separate receiving clerk is employed, the back order
is sometimes made in triplicate, one copy for the receiving clerk, who
notifies the shipping clerk when the goods arrive.
[Illustration: Fig. 7. Back-Order Blank]