Date: Sat, 18 Mar 2000
From: "AGT0961" <AGT0961@atlasvanlines.com>
Subject: AMS-Forum The Tariff is not a Pricing Mechanism
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I think I figured it out. The tariff USED TO BE a pricing mechanism but this is no longer the case. It now serves mostly as a standard or point of comparison for accounts or even individual shippers. That is why all the industry attempts to raise more revenue by tinkering with the tariff have completely failed. They have failed because it no longer serves as THE pricing mechanism as it used to in the days of regulation. What determines the price now is what determines it in any other industry: supply and demand, cost of labour and equipment etc.
Hence I believe that the major tinkering with the tariff known as Tariff 2000 is equally doomed. However it will come with many costs of its own in terms of its implementation. Since in reality the tariff in now mostly a standard or point of comparison, all the more reason to leave it alone. By leaving it alone (no increases or decreases) it will serve its function more and more AS A STANDARD. The very definition of a standard is something that is constant and not changing.
I believe the powers that be in our industry would save themselves a lot of work if they would get this clear. We need to remind ourselves everyday that WE ARE NO LONGER REGULATED IN TERMS OF PRICING. Once this is realized things become a lot simpler.
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