THE STEAMSHIP COMPANY
Steamship companies operate three general kinds of lines: (1) lines
consisting of the largest and fastest steamers which carry only
passengers, mail, and valuable parcels; (2) lines using slower steamers
which carry both passengers and freight; and (3) lines employing
vessels--steamers, sailing vessels, and barges--which carry only
freight. The cost of hauling cargoes by water is in every case less per
mile than that of carrying the same quantity of goods on land. It costs,
for example, over four times as much to carry a bushel of wheat from
Chicago to New York by rail as it does to carry it across the Atlantic.
It is for this very reason that the traffic on our navigable rivers, the
Ohio and the Mississippi, and on the Great Lakes is so heavy. Whenever a
cargo can be shipped as well by water as by rail and there is no hurry
for delivery, it is shipped by water. However, because so much of our
freight must be rushed from place to place, the railroads get the bulk
of the inland traffic.
THE RAILROAD COMPANY
The services of the railroad company embrace the hauling of freight, the
carrying of passengers, and the transporting of express and of mail. The
hauling of freight is the most important item in the railroad business,
about three-quarters of the total income being derived from this source.
Each year over one billion tons of freight are turned over by shippers
to the railroads, who use almost two and one-half million freight cars
to carry it. About one-half of this tonnage is minerals, mainly ore and
coal; about one-seventh consists of manufactured articles; and
one-twelfth of agricultural products. Commodities are grouped into from
ten to fourteen classes, on each one of which the freight rate is
different from that of the others. By freight rate is meant the cost of
shipping a certain unit, usually 100 pounds or a ton, from one place to
another; it is dependent on the distance. There are certain bulky
commodities like coal, livestock, lumber, grain, and cement, which are
almost always handled in carload lots. They are not included in the
freight classification, but have a special ex-class freight rate.
Freight rates depend also on whether the goods are shipped by slow or
_local_ freight or by fast or _through_ freight.
There are a hundred different kinds of papers used in carrying on the
railroad freight business. Only four of the most important will be
considered here. When a shipper turns over his goods to the railroad
company at its freight depot, he gets from the agent a _receipt for
freight_, which is merely a receipt for the goods he has turned over. In
the ordinary course of business these receipts are exchanged at the
company's office for a _bill of lading_ in triplicate. The original and
one copy are given to the shipper. The second copy is kept by the
railroad. This bill of lading may be of two kinds, _straight_ or
_order_. If a straight bill of lading is given, the original is sent to
the person to whom the goods are shipped, who is called the _consignee_,
who on the presentation of the bill of lading is entitled to the goods
after paying the charges. An order bill of lading is much like a check,
in that it can be assigned to another person. Like the straight bill it
states the name of the consignee or the person for whom the goods are
intended and his address, but the consignee cannot get possession of the
goods until he has paid for them. To collect payment, the shipper
attaches to the order bill of lading a draft for the amount of the
goods and the freight, and through his bank and the bank of the
consignee the amount is collected. The consignee then gets possession of
the order bill of lading, which entitles him to possession of the goods.
This is more fully explained on page 344. The railroad's most important
paper is the _way bill_, which shows the conductor or the agent of the
company just what articles are included in the shipment, so that it can
be checked when unloaded. When the goods arrive at their destination,
the consignee is notified and is sent a _freight bill_ showing the
freight charges. When he presents his bill of lading and pays the
charges, the _freight bill_ is receipted and the goods are his.
In quoting prices on goods, manufacturers and distributors usually
designate whether they will pay the freight or whether it is to be paid
by the consignee. In the latter case the price is quoted f. o. b. at the
place from which the goods are shipped, which means freight on board at
that point. That is to say, if a distributor located at Detroit quotes
his automobiles f. o. b. Detroit, he means that he will see that the
goods get into the railroad company's hands at Detroit, but that the
consignee pays the freight from Detroit to the destination. The latter
is the common practice in shipping.
In the following exercises we shall treat the subject of distribution
under four heads:
I. The Retail Merchant.
II. The Wholesale Merchant.
III. The Mail Order Merchant.
IV. The Salesman.
I.--THE RETAIL MERCHANT
=Exercise 259=
_Oral_
You are opening a grocery store. Remember that your object is to sell
the largest possible amount of goods. Develop each of the following
suggestions: