Transportation Tariffs, Tariff Concept, Tariff Functions...

Transport Tariffs

The concept of tariff

The term rate (tariff) refers both to the relevant economic category, and to the document published by the transport operator.

Transport tariff as an economic category is the price of a transportation service. In this sense, tariffs have common price properties, reflecting the pricing features in the transport industry.

The transport tariff as a document that the transport operator publishes is a collection:

- list of services offered by the transport operator;

- corresponding to certain tariff rate services.

Tariff rate is the price for performing a certain operation as part of a transportation service, for example, transporting one ton of cargo per kilometer;

- the rules for calculating the final prices for the services of the operator, taking into account the conditions of their provision (the composition of the services, the transport properties of the goods, the lotion, the urgency of delivery, etc.).

Tariff functions

The main functions of transport tariffs are:

1) reimbursement of the costs of the transport operator and ensuring the receipt of estimated profits;

2) management of market behavior of the clientele. Tariff structure and the level of tariff rates can be used to stimulate the clientele to certain actions desirable for the transport operator. Along with the main task - to force the client to prefer this operator to its competitors, the tariff can stimulate the clientele to ensure that:

- present cargo for shipment in batches of a certain size;

- it is preferable to use certain points for the dispatch of goods or certain routes for their transportation;

- order certain vehicles for transportation;

- purchase transport services by "package", rather than individually;

- conclude agreements with the operator, designed for long-term cooperation, etc.

The tariff may have a protective character, i.e. make certain actions unprofitable for the client (since they are unprofitable for the transport operator). Artificially inflated tariffs are sometimes set for so-called short-haul transportation, unprofitable for the transport operator. The price of container storage at the terminal is usually very low during the first two or three days, but then it increases in an abrupt way, preventing the use of the terminal for long-term storage of goods;

3) support for individual consumers or suppliers of transport services (in the case when the tariff is regulated by the state), rational distribution of cargo flows between modes of transport from the point of view of the regulator;

4) ensuring the competitiveness of supply chains, in which appropriate transport services are realized. This tariff function reflects the relationship between transport and commodity markets (see paragraph 2.4). In Fig. 3.8 shows how the cost of shipping can affect the price competitiveness of the shipper.

Influence of the tariff on the price competitiveness of the consignor

Fig. 3.8. Influence of the tariff on the price competitiveness of the consignor

Factories A and B produce homogeneous competing products; The territory where there are potential buyers lies in the interval AB. The selling price for the products of each of the manufacturers is formed from the price of the plant and the transportation price, which increases with the distance from the place of production. At the point x, the chains of goods of both producers are equal. Reducing the cost of transporting goods for plant B (dashed line) expands the boundaries of price competitiveness of its products from point .r to point x ,. At the same time, the application of a special reduced fare for item "2" by the carrier servicing plant A allows the plant to establish control over an attractive regional segment of the market.

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