fF574 Cornell University Library HF5761.A45 The Industrial traffic department 3 1924 013 879 287 l^m fork At (dornpU MniutrBttg 3tl(ara, N. % iCtbrarg THE INDUSTRIAL TRAFFIC DEPARTMENT ONB OF A SKRIK8 OP LECTURES IN A SYSTEMATIC COUBSE Wl N. AGNEJW Tra£5c Manager International Steam Pump Company 3C-1 La Salle Extcnspn University • Chicagfo - LiBRARN JUN lU ■•■i4u. Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013879287 THE INDUSTRIAL TRAFFIC DEPARTMENT W. N. AGNEW Traffic Manager InteraatioDal Steam Pump Company LASALLE EXTENSION UNIVERSITY (Home Study Under Ezpett Guidance) CHICAGO 1917 (10-287) HF5"7 C I A45- Copyright, 1914 LaSallb Extension UNivEKsnT / 7 b ^L^ CONTENTS The Industrial Teapfic Department Introduction 1 Duties of Traffic Manager 2 Furniture 2 Publications 4 Book Records 7 Tariffs 8 Rates 9 Classification 12 Routing 15 Claims 17 Relation of Traffic Department to Accounting Department 19 Tracers 19 Demurrage 21 Adjustment of Complaints 21 Conclusion 23 THE INDUSTRIAL TRAFFIC DEPARTMENT Inteoduction" In view of the enactment of the Hepburn Law, it is important that industrial concerns, whether large or small, maintain a traffic department of some description. It is well known that until a few years ago an industrial traffic department was not so necessary as it is now, inas- much as the rate practically controlled the business, and the carrier who could name the cheapest rate secured the freight. The Hepburn Law, however, has changed all this, as it places all shippers, regardless of their size, on an equality. The whole subject of technical traffic administration is big and weighty enough to command a separate course of study. It is the purpose of this treatise merely to suggest how an industrial traffic dep^artment may be organized and carried on to obtain the best results. The problems of how to secure the lowest rates, how to classify freight, and the many other problems of the traffic manager are treated at length elsewhere. As no two shippers have exactly the same problems to solve, the suggestions must be modified to meet indi- vidual conditions obtaining in the individual case. 2 INDUSTRIAL TBAFFIC DEPARTMENT Duties op Traffic Manages The industrial traffic manager's duties in brief may be stated as follows: (1) The quoting of rates. (2) The routing of consignments. (3) Complete supervision of the shipping and re- ceiving departments. (4) Complete responsibility to his employers for outgoing goods after they are placed on the shipping floor and of incoming goods up to the time they are delivered to the various departments of the factory from the receiving floor. (5) Supervision of any and all expenses connected with transportation and handling of merchandise on the shipping and receiving floors and outside of the manu- facturing departments, and the control and supervision of the methods of handling; this includes cartage, light- erage, railroad, steamboat, or steamship carriage, han- dling from floor to trucks, cars, or boats, etc., and vice versa. (6) The securing of readjustment of rates that are unjust or discriminatory. This can often be done by taking the matter up with the carriers, but if necessary the matter should be placed before the state commis- sion or the Interstate Commerce Commission in proper form to show wherein the rates are wrongly adjusted. IFUBITITUKE The furniture of an industrial traffic department should embrace a good tariff file. There are a number of such files built expressly for the keeping of railway tariffs in convenient and accessible form, but as every INDUSTRIAL TRAFFIC DEPARTMENT 3 traffic man files his tariffs in the way that will make them most accessible according to his own particular needs, we will not describe the different styles. In many cases drawers properly labeled are used, and in other cases a series of box files with a description of the contents on the back will serve the purpose. The tariff file should always include the various classi- fications, copies of which can be obtained from the classi- fication committees or from the railroad companies. It should also include all tariffs affecting the particular business. A shipping-receipt or bill-of-lading file is also essen- tial, as there is no more valuable document in the traffic department than the bill of lading. A good plan is to have the bills of lading numbered and give instructions to have this number placed on orders, invoices, etc., the bills of lading afterward to be filed numerically. A paid-bill file will also be found necessary for the purpose of containing paid freight bills and it is a good plan to file these alphabetically either under the name of the transportation company, the consignee, or the shipper. Except in concerns where the number of claims is very voluminous, a regnilar claim file is not absolutely essential, as it will be found that an ordinary letter cab- inet file will take care of the claims nicely. Two files should be used, one containing claims which have been closed or disposed of and the other those which are open or active. They should be filed numerically under the shipper's claim number. In some cases it will be found advantageous to keep a file of rates which can be used without referring to the tariffs, classifications, etc. Cards will generally serve 4 INDUSTRIAL TRAFFIC DEPARTMENT the purpose best, but when they are used great care should be taken to have them tept accurately. Publications The industrial traffic department must be equipped with certain publications besides classifications and tariffs, and the following are the most important for the proper conduct of the traffic manager's office. The Official Railway Guide, published by the National Railway Publication Company, 75 Church Street, New York, is a necessity. It contains a complete list of every railroad station in the United States and Canada and the name of the road on which it is located. It also contains maps and timetables of the principal railroad and steamship lines, and the names of the express com- panies operating over the various lines. It is issued monthly and carries an up-to-date general line of rail- road information that any one having to do with trans- portation is interested in. Bullinger's Guide, published yearly by Edwin W. BuUinger, 53 Park Place, New York, is also necessary. It contains a list of all postoffices in the United States and Canada, the nearest railroad station to each and the name of the railroad on which it is located, also other general useful information. The Railway Equipment Register is an issue which will be found indispensable for the purpose of determin- ing the dimensions and capacity of cars. It is published by the Railway Equipment and Publication Co., 75 Church St., New York, and is filed with the Interstate Commerce Commission, the Public Service Commission of New York — Second District, and the Railroad Com- mission of California by G. P. Conard as agent for various INDUSTRIAL TRAFFIC DEPARTMENT 5 railroads. The information in the Equipment Eegister will be found useful in a variety of ways, as, for instance, in determining in advance of the furnishing of cars by a local railroad agent exactly how much material can be loaded in each car, thereby enabling the traffic depart- ment to instruct the shipping department properly in the laying-out of loads in advance of the arrival of each car on the shippers' siding or on the team track, such preparation being highly essential in preventing delay to cars. Furthermore, the information contained in the Equipment Eegister covering dimensions and capacity of cars will be of the greatest service to the traffic man- ager who controls the shipment of merchandise covered by Eule 27 of the Official Classification when such mer- chandise is destined to territory governed by this classi- fication or is forwarded from a point in this territory to a point in territory governed by other classifications but taking rates governed by the Official Classification over a portion of the distance. There are corresponding rules in the Western and Southern classifications with which the shipper should be familiar in all their applications. This rule provides a different carload minimmn weight for merchandise loaded in cars of different dimensions ; therefore, it is essential that the traffic manager be ad- vised in advance of what size of car his shipping depart- ment is to load in order that he may properly designate the quantity to be shipped in each car to cover the mini- mum weight and prevent payment of "dead freight," viz., freight on the difference between the actual and minimum carload rates. The Equipment Eegister will be found to contain other valuable information such as 6 INDUSTRIAL TRAFFIC DEPARTMENT a list of Industrial Traffic Managers, names of Fast Freight Lines, etc. A Band McNally Atlas is another indispensable ad- junct of the modern industrial traffic department and it will be found advisable to obtain maps of all principal cities showing railroad stations if possible. These will frequently be found in the different billing guides issued by the various railroad companies and furnished free on application. In order that the traffic manager may keep in touch with what his competitor is doing in the matter of rates it is necessary that he be familiar with what tariffs are filed with the Interstate Commerce Commission from time to time covering the commodity or commodities which he is shipping or receiving. It is manifestly im- practical to employ the services of a representative at Washington to watch the filing of tariffs and to sort out from the many hundreds filed weekly those in which his particular firm is interested. It will be found advis- able to subscribe to the Traffic Bulletin, published by the Traffic Service Bureau, 418 So. Market St., Chicago, which lists under various headings all tariffs filed. It will then be necessary only to peruse the lists laid down in this bulletin weekly to determine just what has been done during the preceding week in the matter of rates. The tariffs can then generally be obtained on application to the Chief of the Tariff Bureau of the issuing railway by mentioning the number and I. C. C. number listed. The traffic manager will also appreciate the necessity of keeping in touch with what the Interstate Commerce Commission is doing and this information will be found in the Traffic World, which is also published by the INDUSTRIAL TRAFFIC DEPARTMENT 7 TraflSc Service Bureau and which is a weekly publica- tion. Furthermore, it is highly necessary that the man in charge of a trafSc department know what decisions have been rendered by the Interstate Commerce Com- mission and the various state railroad commissions in the past. This information will be found in convenient form in various digests of decisions, a good one being published by the late E. B. Peirce, sometime Commerce Counsel of the Eock Island-Frisco Lines, and covering decisions from the year 1887 to 1908. This was followed by a digest published by Lust & Merriam, Lawyers, of Chicago, 111., quoting decisions from 1908 to 1913. This last-mentioned firm has just completed arrangements whereby their publication will be supplemented by the issuance of addenda to be issued every three months, thereby keeping the publication continually up to date. There is another publication which will be found useful for general reference and that is the Proceedings of Twenty-Third Annual Convention of the National Asso- ciation of Railway Commissioners, published by the Traffic Service Bureau and containing in convenient form the transportation laws of all the states and a digest of decisions of the state railroad commissions and the Interstate Commerce Commission. The List of Open and Prepaid Stations issued by F. A. Leland, Si Louis, Mo., furnishes in convenient form a list of freight stations in the United States showing whether freight may be consigned to them with charges collect or whetiier charges must be prepaid. Book Eecoeds A freight record is often advisable. This should be so arranged that the daily invoices covering sales on which 8 INDUSTRIAL TRAFFIC DEPARTMENT freight is to be paid by the firm employing the traffic manager may be entered from day to day. In this way duplicate payment of freight may be prevented and a complete record of the bills kept — ^when the traffic man- ager approves of freight bills, the date and amount paid, to whom paid. Any other information desired can be entered opposite each item. If it is foimd necessary to refer back at any time to any particular invoice, a quick reference to the cost of transportation is had by using this record. Taeiffs It is very important that a more or less complete file of tariffs be kept by an industrial traffic manager. This file should include not only the tariffs covering points from and to which he ships, but also, as far as possible, those covering points to and from which his competitors ship. If possible, a regular tariff file should be used. The question of a file to hold the tariffs has already been treated and so will not be discussed here. If, for any reason, a complete tariff file cannot bo maintained, attention is called to the fact that various publications give this information in a condensed form. These publications are not authoritative as far as the carriers are concerned, but their contents are taken in entirety from the regular published tariffs of the par- ticipating carriers, and the tariff authority is shown on each page of the publication. If desirable, copies of the regular tariffs may generally be secured upon applica- tion to the carriers. The Interstate Commerce Commis- sion has recently ruled that carriers may charge for tariffs furnished to shippers. As a matter of fact, how- ever, a great many of the carriers' representatives use INDUSTRIAL TRAFFIC DEPARTMENT 9 the above mentioned publications as a convenience where it is not practicable to carry a complete file of tariffs. All carriers are required by law to file copies of their tariffs with the Interstate Commerce Commission thirty days in advance of their effective date, except in special cases when it is possible by special permission obtained from the Interstate Commerce Commission to file them three days, and in some instances even a shorter period, in advance of the effective date. No interstate tariff is legal unless the number of the Interstate Commerce Commission is shown on it, and particular attention should be paid to see that the Interstate Commerce Commission number is shown on each and every tariff and supplement of this kind. The various state railroad and public service commis- sions govern the issuance of tariffs covering intrastate business, and generally each tariff must bear the state commission's number before it can become effective. Certain sections of the country are under the jurisdic- tion of tariff committees, and as a rule all tariffs cover- ing traffic within these territories are issued by the chair- men of these committees as agents for the carriers. This is done to obviate the expense and also the neces- sity of each carrier's issuing individual tariffs. This procedure is entirely legal and proper, and it has been approved by the Interstate Commerce Commission. Rates Individual rates for each of the thousands of commodi- ties which enter the course of trade would lead to endless detail in rate making. Consequently, rates are based on various classifications. These rates come under two gen- eral headings: class rates and commodity rates. 10 INDUSTRIAL TRAFFIC DEPARTMENT Class rates are rates that apply in connection with classifications. Commodity rates cover, as a rule, commodities that move in large quantities, and these are usually but not always somewhat lower than class rates. Commodity rates govern even though they may be higher than the class rates unless class and commodity rates are included in the same tariff and provision is made therein that the lowest rate, i. e., either class or commodity, that is named in the tariff is applicable. It is very important that an industrial trafiSc manager keep close check on commodity rates applying from the points where his shipments originate and also on the rates on the same commodities applying from the points where his competitors' shipments originate, as the awarding of a sales contract may very often hinge on a very slight difference in the freight rate. Often it will be found that a combination of local rates will be lower than a through rate, but it must not be forgotten that the through rate is the legal one and must be used. "When instances of this kind are discovered, however, application can and should be made to the carriers for the publication of the sums of local rates as a through rate, and a formal complaint may then be made to the Interstate Commerce Commission, asking that reparation be awarded on all shipments that have been billed at a through rate that is higher than a com- bination of local rates. The Interstate Commerce Com- mission generally considers a through rate in excess of the sum of the locals as prima facie unreasonable and places upon the carriers the duty of justifying such a rate. It formerly was permissible, where a combination of INDUSTRIAL TRAFFIC DEPARTMENT 11 local rates was cheaper than a through rate, to bill the shipment to some point and have the railroad agent re-bill to destination as a new shipment, thus taMng advantage of the cheaper local rates. This procedure is not possible now, however, as the Interstate Commerce Commission ruled that the carrier's agent cannot act for the shipper, and that the goods must actually be taken possession of by an agent of the shipper or the consignee before being re-billed, except in cases of diversion in transit, when the railroad may act as agent for the shipper. In some cases it may be worth while to have some forwarding agent or other representative actually take possession and re-ship from the junction. Attention is called to the fact that ocean rates are not governed by the Interstate Commerce Commission and firms doing a heavy export business usually contract at the beginning of the year at a specified rate per ton. Shippers doing only a limited amount of export business, however, may place it in the hands of a forwarder or broker, who can often obtain more advantageous rates than the shipper himself. Ocean rates are subject to great fluctuations and are governed more or less by competition and the amount of tonnage moving at the time the rate is made. * It might be well to mention here that carriers are required by law to collect undercharges, as well as to refund overcharges, occasioned by errors in rates, exten- sions, or otherwise. This fact should not be lost sight of by industrial trafiic managers when called upon by the carriers to pay an undercharge. 'The treatise on "Ocean Traffic and Trade" deals with this subject more in detail. 12 INDUSTRIAL TRAFFIC DEPARTMENT Classification * As has been shown the United States is divided into three classification territories, i. e., the Official, which includes the territory east of the Mississippi Eiver end Chicago, and north of the Ohio and Potomac rivers; the Southern, which includes the territory south of the Ohio and Potomac rivers and east of the Mississippi; and the Western, which includes the territory west of the Mississippi Eiver, There are also various state classifications, which, however, excepting in special instances, have no bearing on anything but intrastate business, i. e., business originating at a point and destined to another point within the same state and moving wholly within the state. It is necessary, therefore, for the shipper or his traffic manager to become familiar with the classification territories as they affect interstate shipments and with the various state classifications as they affect intrastate shipments and shipments outside their own territory. One of the important duties of an industrial traffic manager is to investigate thoroughly inconsistencies of classifications in the different territories. For illustra- tion, a commodity may be classified higher in one terri- tory than in another. This may be accounted for by several reasons. One of the important ones may be the difference in the cost of handling by the carriers in various sections of the country, but a traffic manager has this to develop. Any inconsistencies, however, are deserving of investigation and consequently merit more than cursory examination. A committee known as the Committee on Uniform Classification, whose duties are to work out these various inconsistencies and to formulate uniform rules and INDUSTEIAL TRAFFIC DEPARTMENT 13 descriptions, and to suggest to the various classification committees equitable and uniform classifications and minimum weights to apply generally to the entire country, was formed several years "ago at the sugges- tion of the Interstate Commerce Commission. It will be several years, however, before this work can be com- pleted and, in the meantime, when, in a traffic manager's opinion, a rating needs revision, it is necessary to confer with the individual committees just as in the past. The several classification committees are made up of classification experts of the various carriers in their ter- ritory and are presided over by a chairman. Two meet- ings per year are held by each committee, usually in some city within the classification territory. About thirty days previous to the meeting a public docket con- taining memoranda of the various subjects that are to be discussed by the committee is printed. Every indus- trial concern should make arrangements to be placed on the mailing list of the classification committees for these dockets and copies of the classification. A nominal charge to cover cost of printing and distributing is made by the carriers for copies of classification and dockets. If there are changes of rating desired on any particular commodity, application must be made in writing to the chairman of the committee at least sixty days previous to the date of the meeting so that the subject can be properly docketed. Shippers' representatives have the privilege of appearing personally before the committees to present their case orally; in fact, the carriers encourage this and are anxious to have the shippers present their peti- tions by verbal argument as well as in writing. 14 INDUSTRIAL TRAFFIC DEPARTMENT Experience has shown that shippers who deem their subjects of sufficient importance to be represented per- sonally are given greater consideration than those who do not. The case should be presented as briefly and concisely as possible, as it must be understood that these committees have a great many petitioners appear- ing before them and a shipper's representative may sometimes do his subject great harm by elaborating to too great an extent upon it. Only relevant facts pertain- ing to the classification are considered, and the advance- ment of an argmnent on the commercial superiority of the shipper's article over his competitor's is unwise and is given no actual consideration in the adjustment of the rating. It might be well, while on this subject of classification, to call attention to the seriousness of a shipper's mis- representing his goods in billing to obtain a lower classi- fication than he is justly entitled to. A reference to the Act to Regulate Commerce will show the gravity of this offense and the penalty therefor. The treatise devoted to "Reducing Freight Charges," a part of this course, shows how charges may be reduced in many ways by a little investigation on the part of the traffic man. If at any time commodities that are not specifically described in the classifications governing in the territories in which the shipments move are being shipped, the traffic manager should place the matter before the proper committee, furnishing all the information possible to enable them to rate the commodities properly. INDUSTRIAL TRAFFIC DEPARTMENT 15 Routing There are several features that shonld be taken into consideration in the routing of shipments, the principal ones being that of the character of the commodity and the question of time in transit. Routes are divided into two classes, known as standard and differential routes. The standard routes are those which take the regular class and commodity rates, while the differential routes apply somewhat cheaper rates, principally by reason of their slower time. Differential routes are made up of a combination of water and rail lines and of lines whose physical condi- tions make it impossible for them to equal the service of the standard routes. It can, therefore, readily be seen that the character of the commodity has considerable bearing upon the question of ability to use the differ- ential routes. Some commodities, for instance, would not permit of transferring from cars to steamers and from steamers to ears. By reason of their perishable nature many commodities are never shipped via differ- ential lines since time in transit is one of the principal factors determining the route. Another very important feature in the routing of freight is the climatic conditions of the territory trav- ersed by the several lines. During the winter months some of the extreme northern lines suffer severely from inclement weather, and in that case it is, of course, pre- ferable to route business via the southern lines as much as possible, even if by so doing advantage cannot be taken of the differential rates. 16 INDUSTRIAIi TEAFFIC DEPARTMENT It will sometimes be found to be an advantage for an industrial traffic manager to route bis business via lines that he may possibly be working with for an adjustment of rates or for some advantageous change in the classi- fication of his commodity; also in some cases the reciproc- ity feature enters into the routing of freight to a con- siderable extent, as there are innumerable firms whose sales to railroads are a large item in their business. It is well, if this is the case, for an industrial traffic manager to be in close touch with the policy of the sales department of his firm so as to route his freight via the lines that are disposed to be friendly in this respect. This is a feature that during the past few years has been very extensively made use of by industrial traffic man- agers, and if used properly, it accomplishes results; as in the majority of cases, the purchasing departments of the carriers are disposed to co-operate as closely as they consistently can with their traffic departments. This must not be construed, however, as meaning that an industrial traffic manager controlling a large volume of tonnage can use it to influence sales, or, on the other hand, that a railroad purchasing agent, upon request of his traffic department, will influence purchasers through the return of a large industrial tonnage, as all other things must be equal before purchasing agents will give tonnage even a second thought. It will be found, in a great many oases, that there are no through rates between different points and therefore, of necessity, a combination of local rates must be applied. The Interstate Commerce Commission has ruled that all freight must travel via the routes specified on biUs of lading and that the rates applying via these routes must be used. It is extremely important, there- INDUSTRIAL TRAFFIC DEPARTMENT 17 fore, that great care be exercised in cases of this kind so that the cheapest routes and combinations may be used. In the routing of less-than-carload freight there is another feature that has a great bearing on the question of time that should be given careful consideration. This refers to through package cars, which all carriers are making a specialty of. It would be superfluous to go much into detail on this subject, as all freight solicitors are thoroughly familiar with what their lines are doing in this direction, and are glad to give full and detailed information relative to it and to the time in transit that can be saved by taking advantage of this special service. Claims One of the most important of the duties of a traffic manager is the handling of claims. He should know the proper methods of filing claims and possess considerable knowledge as to the legitimacy of claims. A very satisfactory system of keeping in touch with the progress of claims and following them up is to have a card index file, and it will be found to advantage to carry this index under a daily reference. Experience will teach that claims are not handled by the freight claim agents of the carriers as expeditiously as ordinary correspondence; therefore, it behooves the industrial traffic manager to inaugurate some follow-up system whereby he can pursue the claims to a prompt adjust- ment. It is not practical to set down any fixed rule as t6 th,e time in which claims should be handled by the carrier. 18 INDUSTRIAL TRAFFIC DEPARTMENT It will, however, be found beneficial to change the form of each letter urging settlement instead of using any stereotyped inquiry as to the status of the particular claim. An inquiry regarding a claim should at least be worth a letter, and it should be the endeavor of the traffic manager to word his letter so that it will impress upon the claim agent the fact that some special action is desired. Occasionally a complete list of claims should be made and sent under personal cover to claim agents of the lines that the claims are presented to, with a strong letter urging the prompt investigation and settle- ment of the claims enumerated. It will often be found that a claim agent will say that papers covering a certain claim have been sent to a connection for investigation and are now in the hands of such and such an official. In cases of this kind it is well to write this particular official, calling his attention to the length of time the papers have been in his posses- sion and insisting upon the prompt investigation and return of the papers to the original line, with authority for settlement of his line's proportion of the amount. The opinion has often been expressed by shippers, where pajnnent of their claims is apparently being need- lessly delayed, that it is proper that they should retaliate by deducting the amount from their freight bills. The Interstate Commerce Commission has ruled, however, that the two transactions have no relation to one another, and that such a deduction could not be made legally.^ "'Claims between Shippers and Carriers," by Ralph Merriam, 1816 pages, published by LaSalle Extension University, is a valuable guide to the handling of claims. INDUSTRIAL TRAFFIC DEPARTMENT 19 Relation of Tbapfic Department to Accottnting Depaetment All freight charges, whether on freight received or forwarded, go into the company's or firm's accounts and are a considerable item of each company's or firm's business. In many cases the traffic manager has various shipping and receiving clerks under his jurisdiction, and great care should be exercised by him to see that these clerks are furnished rate information that will enable them to check expense bills properly. Very often minor errors, such as noistakes in extension, improper applica- tion of mimimum weights, etc., can be caught and cor- rected before the items are taken into the acounts of a concern. Where these errors are discovered, they should be promptly brought to the attention of the carrier's agent so as to avoid the necessity of entering claims and thus causing additional work for the accounting depart- ment. Tracebs Another item that, in the writer's opinion, deserves special mention, although it is more or less of minor detail, is that of tracers. Abuse of this privilege has grown to enormous proportions during the past few years, with the result that the carriers have about come to the point where no attention whatever is paid to an ordinary request for a tracer. The utter fallacy of an indiscriminate request for tracers on each and every shipment cannot be too strongly impressed upon the industrial traffic manager. Some firms have gone so far in this respect that a printed tracer request is made with every shipment, both carload and less-than-carload, 20 INDUSTRIAL TRAFFIC DEPARTMENT and as a result a large percentage, of these requests have been consigned to the waste basket. It can readily be seen that if the carriers undertook to issue a tracer on all less-than-carload shipments, it would involve a very heavy additional expense, and it is out of all reason to expect them to do it. The abuse of the privilege has had a tendency to make the roads careless of all requests for tracers, whether justified or not. It should be understood that the object of a tracer is to follow up and right any error in the forwarding of a shipment. A tracer never hurries the delivery of any consignment that is taking its regular course. A tracer travels by mail, and when a shipment is being properly handled, the issuance of a tracer will not expedite the movement of the consignment in any way. A request to have a shipment traced on the date the consignment is made, or before a reasonable time has been allowed for its delivery, is looked upon as an abuse of the privilege granted by the carriers, and it is so seriously regarded that on this account in many cases meritorious tracers are slighted. Regular printed tracer forms are not reconamended. If a shipment has been out long enough to justify a request for a tracer, it will be given more attention by the carriers if a letter requesting that a tracer be issued is written. It is recommended that, if an industrial traffic manager has cause for continual complaints regarding delayed shipments, he take his grievance to an official who will have authority to remedy it, and not waste time and postage in endeavoring to foUow each separate shipment with an individual tracer. INDUSTRIAL TRAFFIC DEPARTMENT 21 Demuebage The question of demurrage is one that should be given careful study by a traffic manager. The Interstate Commerce Commission has drawn up a set of uniform demurrage rules that have quite generally been adopted by carriers in all states, both on interstate and intra- state business. There are, however, certain states that have ques- tioned the authority of the Interstate Commerce Com- mission to make demurrage rules applicable to intra- state traffic, and it is necessary for an industrial traffic manager to inform himself thoroughly on these points. Copies of these uniform demurrage rules covering inter- state traffic and also copies of various state commission demurrage rules may be secured by application to any railroad. There will be found, in the uniform rules, a separate contract covering what is known as the "average agreement." This contract allows good time made on unloading to apply to overtime on loading, or vice versa. If the inbound and outbound tonnage of a shipper warrants, it would be well for him to take advantage of this privilege. It will be noted that it is run on a debit and credit plan, and a httle study of the subject will be sufficient to cause one to arrive at a decision as to whether to use the regular demurrage agreement or the "average agreement." Adjustment of Complaints It may not be out of place to sound a note of warning about the tendency of some industrial traffic managers to appeal to the Interstate Commerce Commission with more or less trivial complaints, when with a little 22 INDUSTRIAL TRAFFIC DEPARTMENT patience and perseverance these could be amicably adjusted with the carriers without employing this extreme measure. Experience has shown that the carriers are usually willing to meet the shippers halfway when they have a genuine grievance, and it is certainly unwise for an indus- trial traffic manager to jeopardize his reputation for fairness without first exhausting every effort to adjust his differences with the carrier. The impression should not be gained, however, that the appealing of a case to the Interstate Commerce Commission necessarily is repugnant to the carrier, as very often they welcome a ruling of the Commission on some complicated question. In cases of this kind it is well for an industrial traffic manager to discuss the case frankly with the proper official or officials of the interested carriers and agree to enter the complaint in a friendly spirit. This method of procedure, it will be found, will leave no sore spots. If it is found necessary and advisable to enter a com- plaint, a letter should be written to the secretary of the Interstate Commerce Commission, outlining briefly what is desired, and in acknowledging receipt, the secretary will furnish certain forms that it is necessary for the complainant to fill out. The alert and up-to-date traffic manager will familiarize himself in advance with the rules of procedure. It must be borne in mind that complaints come under the heading of informal and formal complaints. In the case of the former the Interstate Commerce Commission simply gives an opinion and acts as a go-between, or intermediary, between the shipper and the carrier, while in the latter case it is often necessary for the com- INDUSTRIAL TRAFFIC DEPARTMENT 23 plainant to appear in person before the Commission to argue his case. If of sufficient importance, in the formal case the shipper should be represented by counsel versed in the intricacies of interstate commerce law, for if the case comes to a point where a public hearing is held, the carriers are always represented by their commerce attorneys, and it is incumbent upon the shipper to be equally well represented. No traffic department is complete without a copy of the Act to Regulate Commerce and a copy of the latest Conference Ridings of the Interstate Commerce Com- mission. The rulings are the result of careful deliberation on individual cases that have been presented to the Inter- state Commerce Commission for decision. These docu- ments and many others that the Interstate Commerce Commission have published may be secured by applica- tion to the secretary of the Commission, whose office is in Washington, D. C. Congress has so limited the appropriation of the Com- mission for the distribution of publications, however, that the only sure way to secure any publication is by purchasing from the Superintendent of Documents at Washington. His charges are nominal. Conclusion In conclusion it will be of interest to see from concrete examples how the traffic manager does his work. In the first example, it will be seen that the traffic manager often plays an important part in getting business, as the securing of an order many times depends upon the freight rates which apply. M INDUSTRIAL TRAFFIC DEPARTMENT Quotations are asked on a carload of material for de- livery in Chicago, 111., the manufacturer being located in New York. The sales manager determines his price on an f. o. b. New York basis and requests the best rates from the traffic department. The traffic manager after consulting his tariffs, names the best rates (commodity or class) via standard all-rail lines and differential rail lines if for winter delivery and, if for summer delivery, via standard all-rail lines, differ- ential rail lines, standard rail-and-lake lines, differential rail-and-lake lines, and canal lines. He also names the expense of carting to the railroad or handling into cars and any other expenses liable to accrue. The sales manager embodies these rates and charges in his delivered quotations and names to the prospective customer the delivered prices via the different routes. We will say the order is then received at a price based on differential rail-and-lake routing. On receipt of the order the order department calls on the traffic depart- ment for routing, and it is the duty of the traffic manager to name the route over which the shipment must travel. The order is then re-written by the order department and forwarded to the manufacturing department to fill. The goods are then placed on the shipping floor and from that time they are continually in charge of the traffic department until delivered at destination, the traffic manager holding the various transportation or railroad companies responsible in the name of his employers. In the meantime the shipping clerk has been furnished with a copy of the order bearing the route, and he now proceeds to prepare a bill of lading and, after the goods have been properly marked or stenciled with con- signee's name and address, route, number of package, INDUSTRIAL TRAFFIC DEPARTMENT 25 etc., to load the goods into the trucks or cars. If ship- ments are to go forward prepaid, it is usually found con- venient to arrange credit accounts with the railroad or transportation company, and in this case freight hills are submitted after the shipments have gone forward and, after being approved by the traffic manager, they are passed through the accounting department for payment. After shipments have gone forward the trafSc man- ager will arrange with the railroad or transportation company to have the same traced if so requested by pur- chaser, but as a matter of fact this sort of tracer should be discouraged, as, contrary to the popular idea, it does not expedite the movement of freight. In case goods are required for quick delivery it is better to call on the agent or soliciting agent, asking him to rush shipment. Should shipment be permitted to go forward with freight to collect, the purchaser understanding this fact will pay the freight at destination and when remitting in settlement of invoice will deduct the amount of freight from the amount of the invoice. The accounting depart- ment on receiving the remittance will refer the deduction to the traffic manager for his approval or otherwise. In another case we will presume an order is received for a carload of hemp fibre for shipment from New York to Kansas City, Mo., at a delivered price. The sales manager determines at what price he can place this con- signment on the shipping floor. He requests the traffic manager to furnish information as to the quantity to be shipped, to come within the minimum carload weight, and he also asks for the best rate. The traffic manager will first refer to his Official Classification to determine the minimum carload weight and the 26 INDUSTRIAL TRAFFIC DEPARTMENT class applying to the Mississippi River. He will then refer to his Western Classification for the same informa- tion to apply west of the Mississippi Eiver. After this it will be necessary to refer to his tariffs and apply the class for Official Classification Territory to the tariff applying east of the Mississippi and the class for West- ern Classification Territory to the tariff applying be- tween, say, St. Louis and Kansas City. He also examines his tariffs for Official Classification Territory with the purpose of ascertaining whether or not there are any commodity rates in existence on hemp fibre between New York and Mississippi Eiver points and examines the western tariff for similar commodity rates between the river and Kansas City. The lowest combination is what he is looking for, whether of two commodity rates, of two class rates, or of commodity and class rates, and when he has assured himself that he has this lowest combina- tion he so informs the sales manager, who then determines whether or not the order can be profitably accepted. Should the order be accepted, the proceeding is similar to the foregoing instance, except that it will be necessary to lay out the route to the Mississippi Eiver and the route from the Mississippi to Kansas City. The same pro- cedure would apply to an order received for shipment from New York to a point in, say, South Carolina, except that the traffic manager would in that case consult only the Southern Classification and the southern tariffs, ignoring the Official Classification and the tariffs per- taining to that territory. John Jones, of Los Angeles, California, orders from James Smith, of Gloversville, New York, one hundred and fifty (150) cases of cotton gloves, stating in his order that he must have the goods at the earliest possible INDUSTRIAL TRAFFIC DEPARTMENT 27 moment. The sales department upon receipt of the order issues a factory order to the superintendent, sending a copy of it to the traffic department. During the process of preparing the order for shipment, the traffic manager finds that there is no specific rating covering cotton gloves, less than carload, in the Trans-Continental Tariff. Inasmuch as commodities other than those pro- vided with specific ratings to California Terminal Points are covered by class rates in accordance with Western Classification, he determines that from all parts of New York State, including Gloversville, outside of those specifically named, take Group-A rates. The first-class rate from Gloversville to Los Angeles is $3.70 per hundred, this being less than carload, as no carload rating is provided. The traffic manager directs his shipping clerk to insert in the bill of lading the rate of $3.70 per hundred and the total amount of charges to be prepaid, this lot having been sold delivered. He decides on a routing via the New York Central Rail- road, Lake Shore & Michigan Southern Eailway, and Atchison, Topeka & Santa Fe Railway, as he finds that these roads are parties to the Trans-Continental Tariff and, therefore, that the rate applies over this route. He also finds, during his investigation of the rate, that a cheaper rate could have been secured via New York City and American-Hawaiian Steamship Company via Isthmus of Tehuantepec, but time being a principal factor in this shipment, his sales department advises shipping via the more expensive but quicker all-rail route. In addition to co-operating with the sales department, the traffic manager should, in the case of manufacturing industries, keep in touch with the manufacturing de- partment, for he is frequently able to offer many valu- able suggestions as to how an article may be given 28 INDUSTRIAL TRAFFIC DEPARTMENT different ratings according to the manner in which it is assembled for shipment. In one case, for example, a concern engaged in the manufacture of wood-working machinery employed a traffic manager who, in con- junction with the foundry superintendent, reduced the weight of a machine base some 300 pounds, and at the same time had it cast in sections so that it might be shipped under the so-called "knocked down" rating applicable upon this class of goods. Considering that these machines when "set up" were classified at one and one-half times first class and when shipped "knocked down" at second class, it is quite easy to believe the statement that as a result of this discovery the concern was saved more than $10,000 in freight charges alone, to say nothing of the amount saved by reason of less material required. In another case, a manufacturer of castings, which were used to a great extent in the machine trade throughout the country, was shipping these castings painted and with the bolt holes drilled. He continued to do this for many years until he employed a traffic manager, who found that by not painting these castings or drilling the bolt holes a fourth-class rating instead of a second-class rating could be obtained. As the castings could be sold in this way as readily as in the other case and at practically the same price, the traffic manager very soon demonstrated to his employer that through all the years up to this time he had been dehberately overcharging himself by not taking advan- tage of this provision of the classification as applied to the manufacturing side of this business. From the illustrations set forth, it may be clearly seen what an important position the traffic department occupies in modern industries. The information set INDUSTRIAL TRAFFIC DEPARTMENT 28 forth in this treatise outlines a very excellent founda- tion upon which to build a department of this kind and the procedure to follow. As before stated, however, the suggestions will have to be modified to meet the individual requirements of the various lines of business throughout the country. One industry, for instance, may be dealing in fragile articles, such as incandescent lamps, china, or glassware, where the safety of the goods is an all-important question and the methods of packing, accordingly, receive a great deal of con- sideration. On the other hand, in some lines of business this point is of little or no consequence. The methods, however, outlined in this and other treatises of the course may be applied to all lines of business to con- siderable advantage. TEST QUESTIONS These questions are for the student to use in testing his knowledge of the assignment. The answers are not to be sent to the University. 1. What are the duties of the industrial traffic manager? 2. What furniture is generally required in a traffic depart- ment ? 3. What information is contained in the Official Railway- Guide? BuUinger's Guide? Traffic Bulletin? Traffic World? 4. Why is the Railway Equipment Register valuable in ordering cars? 5. How should a freight record be kept? 6. What tariffs should a traffic manager have beside those applying on his own business? 7. What publication can often be used when tariffs are not available ? 8. Who governs the publication of interstate tariffs? Of intrastate tariffs? 9. What are the two kinds of rates and how do they differ ? 10. If there is a class rate and a commodity rate on the same article, which will usually govern? 11. Why should a traffic manager watch his competitor's rates as well as his own ? 12. If a combination of local rates is lower than the through rate, what should be done? 13. Can a shipment be re-billed from a point en route as a new shipment by the railroad agent? 14. Are ocean rates governed by the Interstate Commerce Commission ? 15. How may export business be handled to advantage? 16. What is the duty of the carriers as to the collection of undercharges ? 17. Into how many classification territories is the United States divided? 18. Do state classifications ordinarily apply on interstate business? 19. What is one of the most important duties of the traffic manager? 30 INDUSTRIAL TRAFFIC DEPARTMENT 31 20. What are the duties of the Uniform Classification Com- mittee ? 21. How are the classification committees made up and what are their duties? 22. How should shippers make use of these committees ? 23. What is the advantage of appearing personally before the committee? 24. If commodities are not described in the classification, what should be done? 25. What are standard lines? Differential lines? 26. Why do differential lines charge lower rates than stand- ard lines? 27. Why should the nature of differential lines be carefully investigated ? 28. Why must climatic conditions often be considered? 29. Why is it of advantage for the traffic manager to keep in touch with the sales department ? 30. If there are no through rates in effect, what rates will govern ? 31. Prom whom can information be obtained as to through package cars? 32. What is an important part of the traffic manager's work? 33. How may the traffic manager keep in touch with his claims ? 34. How should claims be followed up ? 35. When advised that claims are in the hands of a connect- ing carrier, what should be done? 36. Is it legal to withhold payment of freight bills to offset claims ? 37. How can the traffic department co-operate with the accounting department? 38. Should a tracer be requested when shipments are made ? Why? 39. What is the object of a tracer? 40. Are printed forms advisable for tracers? 41. What should be done when there are continual delays to shipments ? 42. What is the "average agreement"? 43. Where can demurrage rules be obtained? 44. How should complaints be adjusted when possible? 45. Upon what does an order often depend? 46. Outline briefly the relation of the traffic department to a shipment from the time the order is received until delivered to the customer. Binder Gaylord Bros. Makers Syracuse, N. y