“Ratemaking in Practice” Part Two

Marketing Logistics

Example

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches form Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches form Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.

Cole, Bardi, Novack (2000) Transportation

Shipping to and fromCross Village, Michigan

Shipping to and fromCross Village, Michigan--it is in the CheboyganRate base area.

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches form Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches form Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.– Clifford rate basis point is Chillicothe.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches form Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.– Clifford rate basis point is Chillicothe.

• Determine rate basis numbers tariff.

Cole, Bardi, Novack (2000) Transportation

Rate Basis Numbers

Chillicothe Cincinnati Columbus Dayton

Cheyboygan 550 570 490 510

Clare 400 420 360 380

Flint 275 300 227 214

Cole, Bardi, Novack (2000) Transportation

Rate Basis Numbers

Chillicothe Cincinnati Columbus Dayton

Cheyboygan 550 570 490 510

Clare 400 420 360 380

Flint 275 300 227 214

Cole, Bardi, Novack (2000) Transportation

Rate Basis Numbers

Chillicothe Cincinnati Columbus Dayton

Cheyboygan 550 570 490 510

Clare 400 420 360 380

Flint 275 300 227 214

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.– Clifford rate basis point is Chillicothe.

• Determine rate basis numbers tariff.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

• Determine rate basis point.– Cross Village rate basis point = Cheboygan,

Michigan.– Clifford rate basis point is Chillicothe.

• Determine rate basis numbers tariff.• Determine class rating.

Cole, Bardi, Novack (2000) Transportation

• Plastic material.– Sub 1 Exceeding 9 feet, 6 inches in two dimensions

or 20 feet in one dimension.• LTL – 85• TL – 45• MW - 30

– Sub 2 Not exceeding 9 feet, 6 inches in more than one dimension nor 20 feet in one dimension.

• LTL – 60• TL – 35• MW - 30

Page 331 Cole, Bardi, Novack (2000) Transportation

• Plastic material.– Sub 1 Exceeding 9 feet, 6 inches in two

dimensions or 20 feet in one dimension.• LTL – 85• TL – 45• MW - 30

– Sub 2 Not exceeding 9 feet, 6 inches in more than one dimension nor 20 feet in one dimension.

• LTL – 60• TL – 35• MW - 30

Page 331 Cole, Bardi, Novack (2000) Transportation

• Plastic material.– Sub 1 Exceeding 9 feet, 6 inches in two

dimensions or 20 feet in one dimension.• LTL – 85• TL – 45• MW - 30

– Sub 2 Not exceeding 9 feet, 6 inches in more than one dimension nor 20 feet in one dimension.

• LTL – 60• TL – 35• MW - 30

Page 331 Cole, Bardi, Novack (2000) Transportation

Rate Basis Numbers

Chillicothe Cincinnati Columbus Dayton

Cheyboygan 550 570 490 510

Clare 400 420 360 380

Flint 275 300 227 214

Cole, Bardi, Novack (2000) Transportation

Rate Basis Numbers

Chillicothe Cincinnati Columbus Dayton

Cheyboygan 550 570 490 510

Clare 400 420 360 380

Flint 275 300 227 214

Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 500 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 1,000 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 2,000 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 5,000 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 10,000 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 20,000 pounds

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572Cole, Bardi, Novack (2000) Transportation

More than 30,000 pounds

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846

M20M 1459 705 640

M30M 1292 624 572

Minimum 10,000 pounds

Cole, Bardi, Novack (2000) Transportation

• Plastic material.– Sub 1 Exceeding 9 feet, 6 inches in two dimensions

or 20 feet in one dimension.• LTL – 85• TL – 45• MW - 30

– Sub 2 Not exceeding 9 feet, 6 inches in more than one dimension nor 20 feet in one dimension.

• LTL – 60• TL – 35• MW - 30

Page 331 Cole, Bardi, Novack (2000) Transportation

• Plastic material.– Sub 1 Exceeding 9 feet, 6 inches in two dimensions

or 20 feet in one dimension.• LTL – 85• TL – 45• MW - 30

– Sub 2 Not exceeding 9 feet, 6 inches in more than one dimension nor 20 feet in one dimension.

• LTL – 60• TL – 35• MW - 30

Page 331 Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846M20M 1459 705 640

M30M 1292 624 572

Minimum 10,000 pounds

Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846M20M 1459 705 640

M30M 1292 624 572

Minimum 10,000 pounds

Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846M20M 1459 705 640

M30M 1292 624 572

846 cents/cwt

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,000 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,0 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

Example

• Move 11,0 pounds of plastic sheets exceeding 9 feet, 6 inches from Cross Village, Michigan, to Clifford, Ohio.

Cole, Bardi, Novack (2000) Transportation

110 cwt

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846M20M 1459 705 640

M30M 1292 624 572

846 cents/cwt$8.46 x 110cwt

Cole, Bardi, Novack (2000) Transportation

Rate Basis Number 501-550

Weight Class 200

Class 100

Class 85

M5C 3775 1824 1633

M1M 2900 1401 1264

M2M 2488 1202 1092

M5M 2035 983 888

M10M 1933 934 846M20M 1459 705 640

M30M 1292 624 572

846 cents/cwt$8.46 x 110cwt= $930.60

Cole, Bardi, Novack (2000) Transportation

End of Program.