Attack on Regulation
Full of DistortionsThe Sept. 11 issue of The Journal of Commerce carried a report of a speech by Matthew V. Scocozza, the Department of Transportation's Assistant Secretary of Policy and International Affairs (DOT Official Says Regulation Takes Heavy Toll).
Mr. Scocozza's attack on motor carrier regulation cited the $3,900 transportation cost of moving blue jeans from El Paso to Dallas by motor carrier contrasted with the $2,500 to $3,000 cost for a movement of the same quantity of blue jeans in a container from Taiwan to Dallas.
These numbers are complete distortions, and your readers should know not only the truth but how these fictions get transmitted from one deregulatory fanatic to another.
The story first came to my attention on the editorial page of the Wall Street Journal. Upon inquiry, they advised that they got the story from Rep. Tom DeLay, R-Texas, a co-sponsor of a motor carrier deregulation bill.
He got it from the Coalition for Safe and Competitive Trucking, a motor carrier deregulation lobby, which got it from TEX-AID, a Texas group created to lobby for motor carrier deregulation. TEX-AID picked it up from an article in a publication of the CATO Institute authored by Robert Delaney.
Mr. Delaney was quick to say that the example was hypothetical, and he proceeded to divulge the underlying information, which proved to be a long way
The truth is as different as day from night. Evergreen Lines, the dominant container cranes in the Pacific trade, advises that transportation charges for a 40 foot container from Taiwan to Houston would be $3,750, plus $970 for terminal handling charge at Houston.
To this must be added motor carrier transportation of $428 (item 10019-C, supplement 243, MWB271-D) for the movement from Houston to Dallas, resulting in a total cost of $5,148.
In contrast, the applicable intrastate rate from El Paso to Dallas (item 5900, Common Carrier Motor Freight Association Inc., tariff 25-W) is $2.50 per cwt, subject to a minimum weight of 30,000 pounds. Thus, the total charge for the intrastate movement would be $750.
For anyone interested in the facts as opposed to a cute flight of fantasy, freight charges on the movement from El Paso are roughly $4,400 less than the movement from Taiwan, rather than $1,000 more.
As an added fillip, Neiman-Marcus, the consignee named in the original story, does not even carry the brand of blue jeans manufactured in El Paso.
Actually, these rates understate the real difference in cost, because there are documentation procedures to go through on the imported movements requiring shipper and/or shipper-agent processing. In addition, the full liability of the domestic motor carrier is not matched by the ocean carrier.
As to influencing domestic vs. foreign manufacture, bear in mind that transportation costs at $2.50 per hundredweight translate to about 2 1/2 cents per pair, which is 0.08 percent of the $30 cost of a pair of the brand of blue jeans made in El Paso. Even at Mr. Delaney's imaginary rates, it would amount to 0.4 percent of the cost. It seems obvious that other considerations such as labor cost will govern the source of supply.
Dabney T. Waring Jr. Motor Common Carrier Association Washington
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Attack on Regulation