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weight or measurement volume required for TL and LTL shipments is defined in the controlling tariffs of each carrier.) Generally speaking, the TL rate on a specific commodity from a particular point of origin to a specified point of destination is lower than the corresponding LTL rate between the same points. The term AQ applies when the shipment is moved without regard to quantity. AQ rates in the Puerto Rican trade are an outgrowth of the traditional weight or measurement rate structures established in the age of the old breakbulk carriers discussed in chapter III. This rate structure is gradually giving way to the newer containerization concepts being perfected in this trade in the sea and land transportation of freight. The new rate structures developing in the trade are discussed in more detail in section D of this chapter.

In addition to the TL, LTL, and AQ rates, water car. riers also publish FAK rates, flat dollar per container rates (those established without regard to the weight or measurement aspects of the commodity involved and those without regard to the commodity), and maximum per container rates which, under their tariffs, are not entirely dependent for application on the weight or measurement of the commodity involved. (Flat dollar per container rates, FAK, and maximum per container rates are analyzed in section D of this chapter.)

FAK rates apply on mixtures of commodities in full trailerloads. These rates usually have restrictions against a single commodity exceeding a fixed amount or portion of the shipment. The shipper must furnish the carriers with a complete manifest setting forth the contents of each container or trailer. These rates most nearly approach the concept of flat container rates without regard to the weight or measurement or the commodity carried in the container. The maximum per container rate applies when the quantity of a shipment (and its corresponding freight charge) reaches a stated maximum dollar charge, under the carriers' tariff, removing that shipment from the application of further unit charges.

1. North Atlantic Region

Today, North Atlantic traffic, which accounts for more than 60 percent of the total FMC-regulated traffic moving in the Puerto Rican trade, is carried primarily by Sea-Land and Seatrain, most of it moving under about 75 basic tariff descriptions (app. C, table 2) analyzed below.

This section examines Sea-Land's ocean rates 10 and those of Seatrain," the second largest carrier, from New York to San Juan. Sea-Land's ocean rates from the South Atlantic (Jacksonville) and West Coast (Oakland) regions to Puerto Rico are analyzed in sections 2 and 4 below.

Because of the vigorous competitive situation between the carriers, technological advances and carrier efficiencies (ch. III), rate structures from the North Atlantic are substantially at the same level or on some commodities even lower than those in effect eight years ago when this traffic was moved largely by the Bull Lines. Also, many relatively low rates on large quantity TL shipments have been established.

To evaluate the rate structures and rate relationships, first, the overall rates of Sea-Land and Seatrain were analyzed by use of cumulative frequency of rates distribution tables and charts which plotted rate levels taken from their published tariffs at each ten percentile level 12 (charts IV-1, 2, and 3, and app. D).13 These

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10 Sea-Land's rates are for transport from place of rest at the Elizabeth terminal to the end of ship's tackle at the Puerto Rican terminal covered by its tariff (i.e., San Juan, Ponce, and Mayagüez). Sea-Land's rates, charges, rules, regulations, and other provisions applicable to the carrier's New York to Puerto Rico port-to-port transportation are set forth in its tariffs, FMC-F No. 3 (Pan-Atlantic Corp. Series), and FMC-F No. 10. These tariffs also name pickup and delivery rates applicable within Puerto Rico.

11 Seatrain's rates are for transport from place of rest at its Edgewater, N.J. terminal to the end of ship's tackle at the Puerto Rican terminal covered by its tariff (i.e., San Juan, Ponce, and Mayagüez). Seatrain's rates, charges, rules, and regulations applicable to the carrier's New York to Puerto Rico service are set forth in its tariffs FMC-F No. 1 and FMC-F No. 2.

12 The term "cumulative frequency distribution” refers to a continuous visual presentation of the cumulative frequency of a variable (in this case a group of rates) over a range of values usually rising from zero to a value determined by the highest sample value obtained. The term “percentile level" refers to a percentage point on the cumulative frequency distribution chart covering the ratio between the carrier's total rates and an observed group of rates from zero to the value of the highest sample value obtained. For example, the 50 percentile point on chart IV-1 shows that on June 1, 1968, 50 percent of Sea-Land's total rates were equal to or less than 141 cents per 100 pounds.

13 It is important to mention that the cumulative frequency of rates presentations used in this chapter only represent the carrier's total rate structure. These presentations were not prepared to illustrate the level of rates affecting principal moving commodities but rather to analyze a carrier's total rate structure (i.e., each chart diagrams, separately, the carrier's total weight rate structure and total measurement rate structure). Many rates which have been included in these presentations affect only small traffic volumes, a lesser number of rates affect principal moving commodities.

6 AQ rates in the Puerto Rican trade are really like a low.volume high-rated LTL-type rate.

* Flat dollar per container rates are defined in section D of this chapter.

8 SACAL offers two FAK rates on dry cargo, all kinds (with no restriction on the number of commodities which can be loaded in the container); one of $800 per 40-foot trailer, and the other of $700 per 35-foot trailer.

For example, if the maximum per container rate on beans were $400, beans having a TL rate of 95 cents per 100 pounds would reach the maximum dollar charge of $400 at approximately 42,000 pounds. There would be no further charge between 42,000 and 45,000 pounds (45,000 pounds is Sea-Land's weight limit applicable to containers moving from New York to San Juan).

rates were separately analyzed as to TL, LTL, and AQ rates.14 Secondly, lists of each carriers' principal mov. ing commodities from selected cities, representing at least 50 percent of the carrier's movement in terms of revenue from that port, were furnished by the carrier app. C, table 2). Rates on these commodities were plotted on bar graphs demonstrating rate changes over an 8-year period.15 The final phase of this analysis examined rates on those commodities regarded by the Commonwealth as either essential to the Island's wellbeing or important to its industrial development. 16 These commodities are also considered in some detail in Chapter V which deals with the price-transportation cost relationships.

a. Sea-Land's Ocean Rates From Elizabeth, N.J.

rate decreased by 3.4 percent weight and 8.2 percent measurement during this 8-year period.

Sea-Land's overall rate change from 1960 to 1968 is summarized in table IV-1 below.

Chart IV-1 shows that there were 33 percent more rates in Sea-Land's tariff in 1968 than in 1960 (1,745 weight rates compared to 1,313 weight rates) and many more of the 1968 commodity rates were TL rates, thus accounting for part of the decrease in average rate level. It is evident also that Sea-Land expanded its specific commodity rates while decreasing the amount of traffic moving under relatively high cargo NOS rates. This increase in the number of specific commodity rates was a result of the alteration of its rate structure to in. corporate TL and LTL rates more nearly reflecting its container service and shipper demands.

Chart IV-2, a breakdown of the carrier's 1968 southbound tariffs by TL rates, LTL rates and AQ rates, shows that Sea-Land now has many TL rates (439 weight and 108 measurement) compared to only three available in 1960. The median 1968 TL weight rate of 100 cents per 100 pounds is approximately 29 percent lower than the median 1960 (overall weight rate) of 141 cents per 100 pounds, as shown in chart IV-1.18 This chart also shows that Sea-Land's average LTL rate level is generally one-third higher than its average TL rate level. This carrier's TL weight rates (439 rates) comprise only 25 percent of the total weight rate structure (1,745 rates) contained in its Outward Tariff No. 2, FMC-F No. 3 (Pan-Atlantic Corporation Series). In addition, the overall level of AQ rates (948 rates), which comprise about 55 percent of the total rate structure, is about 50 percent higher than the TL rate structure in this trade; but, approximately 50 percent of SeaLand's traffic moves under TL rates.

Sea-Land's rate structure from Elizabeth to San Juan is moving increasingly toward greater TL type movements and, therefore, a relatively lower rate structure for cargo transported to the Island.

Sea-Land's overall rate profile applicable from Eliza. beth to San Juan is presented in chart IV-1, a cumulative frequency distribution diagram, for September 1, 1960, and June 1, 1968. This chart shows a median weight rate, 17 or average, of 141 cents per 100 pounds on June 1,, 1968 compared to 146 cents per 100 pounds for September 1, 1960. The median measurement rate was 56 cents per cubic foot in 1968 compared to 61 cents per cubic foot for September 1, 1960. According to these figures, Sea-Land's median southbound ocean


14 Cumulative frequency of rates presentations were also prepared on Sea. Land's West Coast-Puerto Rico tariff, Seatrain's New Jersey to Puerto Rico tariff, TMT's South Atlantic-Puerto Rico tariff and GPRL's Gulf-Puerto Rico tariff.

15 Similar illustrations were prepared for TMT and GPRL rates.

19 As indicated previously, the list of Commonwealth commodities developed by the Puerto Rico Ports Authority, Puerto Rico Department of Labor, and the EDA in 1968.

17 The median rate refers to the rate plotted at the 50 percentile level (chart IV-1, A).


18 The 1968 median TL measurement rate of 40 cents per cubic foot was one-third lower than the 1960 overall measurement rate of 60 cents per cubic foot (app. D, table 1).

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As previously indicated, the inferences drawn concerning these displays are subject to certain limitations. Traffic was not related to the overall rate structure in charts IV-1 and IV-2. In order to derive such relationships, Sea-Land's TL rates on principal moving commodities 19 have been displayed on chart IV-3 to show the distribution of actual traffic movements in relation to its overall TL rate structure in 1968. This chart shows that Sea-Land's 1968 southbound TL rates on major moving commodities are distributed over the full range of the rate structure; about 56 percent are grouped in the 125 to 200 cents per 100 pounds range. This distribution agrees with other indications that Sea-Land carries a considerable amount of high-rated cargo. However, 44 percent in number of Sea-Land's principal moving commodities are grouped in the lower 90 to 125 cents per 100 pounds range (app. D, table 1). This distribution, which displays the approximate rate situation confronting the shipper of general merchandise in the trade, shows that rates on food and consumer items are lower than those applicable on intermediate goods.20

It is important to note that the majority of SeaLand's rates on principal moving commodities did not increase between 1960 and 1968 despite the rising costs in stevedoring, ship operations, and construction. The history of Sea-Land's rate changes on principal moving commodities 21 is illustrated in chart IV-4.22 This chart shows 75 rates applicable on dry cargo moving in large volumes from Elizabeth to San Juan for January 1,

1960 23 and June 1, 1968. Of the 75 items shown, the rates on 54 items or 72 percent remained steady or were reduced between September 1, 1960 and June 1, 1968; 32 rates remaining unchanged, and 22 rates de clining, while rates on 21 items or 28 percent were increased.” Appendix E, table 1, contains the 21 commodity rates which increased including the percentage of increase on each item and the 22 rate decreases including percentage of decline on these items.

The analysis also shows that, unlike 1960 when vir. tually all of the 75 commodities moved under breakbulk or AQ rates, in 1968 these same commodities had 32 TL rates, generally applicable on 1,600 cubic feet or 40,000-pound loads, 15 maximum charge per container rates, and only 28 AQ rates.25 Almost all of SeaLand's AQ rates on principal moving commodities remained unchanged over the 8-year period, which means that in general the small shipments were still being transported in 1968 at the same price assessed 8 years ago. On the other hand, it is noted that if all of the 75 items shown in chart IV-4 moved in trailerload quantities, 28 items or 37 percent would have moved under an AQ rather than a TL rate because Sea-Land's tariff offers only AQ rates on these 28 items. Although some items may not move in TL quantities, it is clear that the principle of TL shipments, and corresponding TL rates, has not been extended to a portion of this carrier's principal moving commodities. It would seem fitting that the benefits incident to TL shipments should be given to more shippers.

An examination of Sea-Land's LTL rates revealed that the bulk of these rates have remained steady or declined. Its LTL rates on 71 principal moving dry cargo commodities from Elizabeth to San Juan, ef. fective during the 1960–1968 period, are shown in

19 The principal moving commodities selected, including foods, consumer dry goods and intermediate goods, generated about 50 percent of the freight revenues earned by that carrier in 1966-67.

20 The food items include: confectionary products, pretzels, and biscuits ; the consumer dry goods include: toilet preparations, leaf tobacco, cigarettes, stationery, footwear, toys, electrical appliances, dry goods, tissue paper, furni. ture, and refrigerators; and intermediate goods include: cellophane bags, electrical machinery, nonelectrical machinery, paper, refrigerator motors and units, china, plumbing fixtures, bottle caps, glassware, paper straws, yarn, cotton, jute, or wool synthetic yarn, paperboard boxes, paperboard cartons, boxboard, and paper cups.

21 Appendix C, table 2, contains a list of Sea-Land's principal moving com. modities from New York to Puerto Rico. These commodities generated approximately 50 percent of the freight revenues from Elizabeth to San Juan in 1966 and 1967. The most important of these commodities, in order of revenue importance, include: fabricated textile products, canned fruits and vegetables, machinery, feedstuffs for animals, paperboard boxes, household goods, soaps, plumbing fixtures, leaf tobacco, paints, plastic materials, footwear, glass containers, refrigerators, fabricated plastic products, rubber tire tubes, malt, tin mill products, meats, lubricants, toys, beans, and yarn.

22 All of the 75 TL-type rates shown in chart IV-4 apply on dry cargoes moving in 35-foot containers and are listed in descending order of revenue importance based on the carrier's 1966 freight revenue information. (Sea-Land's actual rates and commodity descriptions are shown in app. E, table 1.) Sea-Land's commodities generally move under cither a weight or measurement rate, whichever produces the greater revenue. On each commodity examined, the rate selected (weight or measurement) is that under which the article generally moves according to information provided by the carrier. Of the 75 rates shown in the chart, 39 are weight rates, 35 are measurement rates, and one, barrels, is in terms of "cents each".

23 Sea-Land's 1960 rates, for the most part, were about the same as the corresponding U.S. Atlantic and Gull.Puerto Rico Conference rates.

24 In addition, app. E, table 1, contains five leading reefer and five leading breakbulk shipments and indicates that rates on nine of these articles remained unchanged or decreased between 1960-68.

25 Except for the 1968 requirement that the consignee unload the trailer himself and several "shipper load" requirements (app. E, table 1), all 1968 rates involve services which are similar to those offered in 1960. An adjustment of the rates for shipper and/or consignee load / off-load requirements would slightly decrease the number of rates which showed a decline or no change over the 8-year period. Analysis of traffic movements, however, indicates that in practice, virtually all TL-type shipments generally have been loaded by the shipper and unloaded by the consignee and, for this reason, such an adjustment would appear to be of little importance. (The 1960 freight on canned goods, groceries, and other articles in mixed trailerload shipments from New York and Jacksonvile was on an "exclusive use" basis. Exclusive use rates apply when the shipper is guaranteed that only his cargo will be loaded aboard a particular trailer and that any unused space will not be stuffed with miscellaneous LTL cargo.)


, September 1, 1960; June , 1968

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Rates in cents per 100 pounds





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Rotes in ceits per cubic foot





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