Moving Tariffs Demystified

What is a Moving Tariff?

Moving Tariffs are simply documents that outlines how a company prices it’s jobs. They must be filed with your state’s Department of Transportation and are publicly viewable and used in disputes. It outlines what your liabilities are, how you rate your jobs, etc. Tariffs were put into place to protect the consumers, create professional development, and promote safety.

History of the moving Tariff

In 1935, the Motor Carrier Act was passed by congress to handle the new and emerging market of transporting consumer goods via trucks. Prior to this period railroads were the main source of transporting goods. Tariffs where submitted to the Interstate Commerce Commission (ICC) for approval. One year later the Household Goods Carriers’ Bureau (HGCB) was created to oversea this industry.

In 1948, after alleged antitrust violations, the Reed-Bulwinkle Act was set in place that made the transportation industry immune to antitrust for specified activities and allowed carriers to jointly establish rates. These rates were published by the HGCB as tariffs. Later the successor to the HGCB’s Rate committee, American Moving and Storage Association (AMSA) would publish the 400-N tariff the most widely used tariff to this day.

Deregulation and free competition

In 1980, after 10 years of public outcries to keep government out of business the “Motor Carrier Act of 1980” effectively undid the rate controls and immunity that were put into place. This allowed free competition in rates and made it easier for new businesses.

In 1995, the Interstate Commerce Commission Termination Act abolished the ICC, and divided responsibilities between the STB and the DOT.

In 1999, the Motor Carrier Safety Improvement Act was passed, this caused all collective ratemaking agreements to be reviewed every five years. If they were deemed not in the public’s interest they were terminated.

On December 31, 2007, the STB terminated all collective ratemaking including the 400-N tariff published by the AMSA as well as the upcoming 600 tariff. They ruled that collective ratemaking as a whole was not beneficial to the consumer and not allowed.

Moving Rate Tariffs Today.

The 400-N had been a staple of the moving industry tariffs with all the van lines using it and offering different levels of “discounts” to the same quoted price. The basis for this tariff looks at the mileage, and weight of a job and numerous other factors across a lookup grid to determine an appropriate rate. The hope of the STB deregulation was to make carriers have to adopt new pricing model and increase competition in the market. For many of the long standing carriers they didn’t move far. In most cases each adopted a hybrid of the 400-N making some slight changes and calling it their own.

Other methods of calculating moving rates have emerged mostly in the newer startups. Typically are based on the miles, weight or CuFT of the job. While some tariffs also factor in difficulties such as number of stairs or distance to the truck. These new methods have started to make the market more competitive.

What does this mean to you?

With many large organizations slowly moving away from the 400N and other regulated tariffs this provides a place where a faster moving company or a new one that can start fresh can get an advantage. Quicker moving companies can create more competitive quoting methods that can take over significant market share. Many people who use the 400N have no idea how exactly it works, they just use it because that’s what was always done. Streamlining your own rating method can be a great way to standout in the market.