The average manager of a business has but a rudimentary knowledge of traffic affairs as they relate to the shipment of his goods. He does not know that he is receiving the lowest rates to which he is entitled, or that the most favorable classification is applied to his shipments.

A large percentage—probably a majority—of the concerns which do any considerable amount of shipping, or receive a large quantity of freight, lose annually in overcharges, due to improper classifications, defective packing, and a general lack of knowledge of the subject, a much larger sum than would be required to pay the salary of a competent traffic manager. There are so many intricate details to be considered in the shipping problem, that the subject requires special study, and shippers whose volume of business is even moderate find it profitable to employ a traffic manager.

Not every shipper is doing a business of sufficient volume to warrant the employment of a man to devote his entire time to this question, but, in the organization of every business doing even a small amount of shipping, there should be one man who will make a study of traffic matters. He need not have an intimate knowledge of the entire subject of traffic affairs, but he should be posted on all questions that have a bearing on the shipment of the goods of his house. When no regular traffic manager is employed, the duties of the position fall on the shipping clerk; he is the logical man to make a study of the subject.

Considered from the standpoint of his knowledge of shipping requirements, classifications, manner of packing, and the application of special rates, a man who has had experience in the freight department of a railroad makes the most successful traffic manager. Such a man may not be fitted to organize and handle the work of the shipping department but, in a concern large enough to require the services of a traffic manager, there will be work enough to warrant the employment of an assistant to look after this branch of the work.

THE SHIPPING CLERK

In this discussion of the organization of the shipping department, the shipping clerk will be considered as assuming the duties of traffic manager, as well as those that usually pertain to his position. He will be at the head and have full charge of the department, keeping such records as may be called for by the business.

It is the duty of the shipping clerk to see that all goods are shipped promptly, packed and described to secure the most favorable rates, and properly routed. He must have a checking system that will enable him to locate errors and to know that all goods called for by an order have been shipped. He will be assisted by such packers, checkers, and porters as may be required to handle the work.

The packers will receive the goods called for by an order from the stock men, and will pack them properly. They will check all goods packed against the order. In this, they will be assisted by checkers, who check the goods received on the shipping floor and again when they are packed. Discrepancies must be reported at once and adjusted immediately.

In some concerns, the shipping clerk is also the stock clerk, in which case he has charge of the actual filling of the orders. He is assisted by stock men, who select the goods and assemble the orders under his direction.

Like the head of any other department, the shipping clerk should have full control of his department. No other person in the organization should be permitted to make shipments. Concerns have been found in which it was the custom for different employes to ship small articles without the knowledge of the shipping clerk. Invariably, this leads to mistakes and results in blame being wrongfully placed on the shoulders of the shipping clerk. And even greater damage is done in the disruption of the organization.

Information Required. The shipping clerk should be fully informed on all traffic questions that affect the shipment of the goods of his house. Of first importance is a knowledge of classifications, that he may know that his shipments are placed in the lowest classification to which they are entitled. Copies of the classifications can be obtained from any local freight office.

In this country there are three principal classifications, these being the official, governing the eastern territory; western, governing western territory; southern, governing southern territory. There are also a few special classifications governing classifications in certain states. While some attempt at uniform classification has been made, the several classifications show many variations, the same article taking different classifications in different territories.

When classifications are received, they must be carefully studied by the shipping clerk that he may really understand to what classifications his goods are entitled. It might be supposed that a certain article or class of goods would always take the same classification, but this is not the case; other questions than the name have a bearing on the question.

The manner of packing goods very often determines the classification. Certain articles are placed in a lower classification if boxed than they would be if crated. This is specially true of goods that are liable to damage in transit. Many shippers make a practice of crating goods because it can be done more cheaply than boxing, without realizing that the difference in packing cost is more than offset by the increase in the freight rate.

The classification is also sometimes determined by the manner in which the goods are described. It is necessary, therefore, to study the classifications with reference to the description that will insure the most favorable rate. However, false descriptions made for the purpose of securing a lower classification must be avoided, as the Interstate Commerce Act provides a heavy penalty for such falsification. But there may be several different descriptions which legitimately apply to a given article, each placing it in a different class. A case in point: The western classification made no provision for filing cabinets in carload lots, with the result that a carload shipment, described as filing cabinets, took the rate provided for less than carload lots. But the same classification gave a lower classification, consequently a lower rate, on office furniture in carload lots. Filing cabinets being office furniture, it was entirely legitimate to describe such shipments as office furniture.

Another illustration of the effect of description on the classification is found in shipments of carriages. The classification, and consequent rate, on this commodity is based on the space that it will require, rather than on the rate. If shipped knocked down and properly crated, with the dimensions stated on the shipping bill, a carriage takes a lower classification than if shipped assembled, or if the dimensions of the crate are omitted.

These illustrations are sufficient to show the importance of a thorough knowledge of the provisions of the different classifications. The shipping clerk who would give the best service to his house should make a study of this subject, even if he is obliged to take the classifications home and study them at night. Every shipper should see that his shipping clerk is supplied with copies of classifications governing the territory in which he is doing business, and give him an opportunity to learn their provisions in respect to the commodities which he ships.

Class Rates. A class rate, as the name implies, is one based on the classification. All commodities are divided into classes, six in number, and all commodities of the same class—with certain exceptions, explained later—take the same rate. Schedules of rates between given points, based on the class, are prepared by the classification committees, but before being put into effect, they must, in case they apply between points in different states, be submitted to the Interstate Commerce Commission for approval. While not a rate-making body, the commission is a rate-governing body, constituting, in a certain sense, a board of arbitration between shippers and transportation companies.

The rates being based on the classes—the higher the class, the higher the rate. To determine the rate, it is first necessary to find the classification; reference to the rate schedule will show the rate for each class.

Commodity Rates. A commodity rate is one applying to a special commodity, between definitely stated points. Commodity rates are established by the railroads to meet some special condition, and with these the classification committees have nothing to do.

A commodity rate does not apply to articles not named in the tariff even though they are of a similar nature, nor do they apply between points not specified in the special tariff. A commodity rate is, in effect, a special rate; it offers special inducements for the shipment of certain commodities, but is not intended to favor any one shipper. The commodity rate is for the benefit of all shippers of the commodity named.

The volume of traffic is the chief factor in establishing rates, either regular or special. It is an especially important factor in establishing a commodity rate. In a given community, some one commodity may be produced in large quantities. Perhaps it is a raw material which must be transported to certain manufacturing centers. To encourage the development of the industry, thereby creating a large volume of traffic, the railroads leading from the point where the traffic originates establish a commodity rate to other points, where the raw material can be used to advantage by the manufacturer. Or, perhaps, important manufacturers are located on other roads, in which case connecting lines join with the originating road and issue what is known as a joint tariff. This enables the producer to deliver his raw material to the manufacturer on favorable terms, when to pay class rates might compel him to abandon the enterprise, with a consequent loss of traffic to the railroads. This discriminates against no one, since every shipper of the particular commodity between the points named is entitled to the special commodity rate.

Frequently, however, a commodity rate exists between certain points which might, under certain conditions, be taken advantage of by a shipper located at a point outside of those named in the commodity tariff. For illustration, a manufacturer in Peoria, Illinois, is shipping a commodity on which a special rate is granted between Chicago and Milwaukee, but takes a class rate from the point of shipment. He makes a shipment to Milwaukee and pays the through class rate provided from the point of shipment, when by proper billing he would have paid the class rate to Chicago, and secured the benefit of the commodity rate from that point to Milwaukee. A lack of knowledge of commodity rates in effect in the manufacturer's territory has resulted in an unnecessary expense—a loss of money.

The claim might be made that the billing clerk at the local freight office should have given the shipper the benefit of the lowest rate. But he will fall back on the classification and be prepared to show that he has given the only rate quoted on shipments from Peoria to Milwaukee, which is the class rate. It is no part of his duties to keep posted on commodity rates granted by another road, while it is distinctly to the interest of the manufacturer to know of the existence of all such rates applying to his product.

Freight Tariffs. The Interstate Commerce Act provides that two copies of every freight tariff issued by the railroads shall be placed on file at each freight office, for the inspection of the public. Since the rates must be made public, the railroads do not object to supplying shippers with copies of the tariffs applying to their product. Through the local freight agent, copies of all tariffs applying from the point of shipment can be obtained.

It has been shown that, in the case of commodity rates, copies of tariffs from the point of shipment are not always sufficient. It is necessary to obtain, from connecting lines reaching the territory in which the trade of the house lies, copies of all special tariffs applying to the commodities shipped. The freight departments of all railroads, through their solicitors, make a practice of supplying copies of all regular and special tariffs to all large shippers on their lines, and to shippers on connecting lines who are in a position to divert traffic to them. Any shipper who has been overlooked, should write to the freight departments of all lines in his territory asking to be placed on the mailing list to receive copies of all tariffs affecting his product. By doing this, he will secure copies of all such tariffs as soon as issued.

The subject of commodity rates is one of the most vexing with which the shipping clerk has to deal, as it is also one of the most important. To compile a complete file of special tariffs, involves close study and much labor. But when once done, it can be kept up-to-date with little difficulty, and the saving resulting will far outweigh the cost.

Filing Tariffs. The manner in which freight tariffs coming into the office are filed is important, for unless properly filed and indexed they are likely to be of little value. The filing system must provide for quickly locating any tariff, and for locating all tariffs that may have a bearing on a particular case.

In the average shipping clerk's office, it is not uncommon to find the tariffs dumped into a drawer, without regard to their order, or hung on a hook on the wall. When a rate is wanted, it is necessary to search through the tariffs until one giving the rate is found. The chances are that the first rate found will be used, regardless of the fact that another tariff shows a special and lower rate.

A very satisfactory file for freight tariffs is the vertical file, and one drawer will hold all of the tariffs required by the average shipper. If a two-drawer cabinet is provided, the shipping clerk will usually find other uses for the extra drawer.

Each railroad whose tariffs are on file should be assigned a folder, and the folders should be filed alphabetically under the names of the railroads, as shown in Fig. 1. All tariffs from one railroad should be filed in the folder assigned to that road, and arranged according to their numbers. All railroads number their tariffs and, in correspondence, refer to them by number. Reference to the tariffs will be facilitated, therefore, if those of each railroad are kept in numerical sequence.

Loose-leaf binders are sometimes used for filing tariffs, but not all tariffs are in proper shape for punching to fit the binder. Another disadvantage in using a loose-leaf binder is that freight tariffs are not uniform in size, resulting in an awkward, unwieldy book. For these reasons, the vertical file is found more satisfactory.

The Index. Since the tariff folders are filed in alphabetical sequence, no index is required to locate the tariffs of a given road, but a cross-index to locate all tariffs that apply to a given point, is a necessity. This index should be in card form, a card being used for each town to which the house ships, or is likely to ship, its products.

A very satisfactory form of card for this cross-index is shown in Fig. 2, which also shows the manner of filing. At the head of the card is the name of the town, and the name of the railroad on which it is located. Below the heading, the first column shows the names of all railroads issuing tariffs to the town in question, whether or not the town is located on the road. Following this are columns for the number of the tariff and for either commodity or class rates. These cards are filed in the same manner as the tariff folders—alphabetically by names of the railroads. A guide card is provided for each road and all cards representing towns on that road are filed in alphabetical order behind the guide card.

Suppose a rate is wanted from a point on the Delaware, Lackawana & Western, to a point on the Burlington. Reference to the Burlington tariffs does not give the rate, for the reason that the Burlington does not issue tariffs from points on the D. L. & W., but reference to the card shows that four roads issue tariffs from Buffalo to Burlington points, one of them being a commodity tariff. Reference to the commodity tariff shows that the special rate applies from a point in Ohio to Chicago, a connecting point with the Burlington. By proper routing, this special rate can be taken advantage of, class rates applying the balance of the distance. Without the index, it would be necessary to look through several folders, with the possibility that the special tariff might be overlooked.

Condensed Rate File. A condensed rate file covering a definite territory will prove a convenience to most shippers. The trade of most houses is confined to a certain definite and rather limited territory. A manufacturer may make an occasional shipment to a point outside of his regular territory, but, as a rule, his shipments will be confined within certain limits. This is even more true of the jobber and the wholesaler.

If a special rate file, covering the particular territory in which the shipper's trade lies, is prepared, it will be found convenient for reference, and will save consulting the tariff files whenever a rate is wanted. Such a file can be arranged on cards, or in a small loose-leaf book. One card or sheet should be used for each town, the name of the town being written at the head of the card.

The card should show the rates for all classes from the shipping point to the destination, as well as the route. It may be necessary to record rates from more than one shipping point. A manufacturer may have two or more shipping points, and it is important to know from which points he can secure the most favorable rates. It is also advisable to include the shipping points of the chief competitors, that they may be given due consideration in meeting competition.

Fig. 3 shows the form of card for this rate file. The cards should be filed alphabetically, and it is well to include cards for some of the principal towns outside of, but convenient to, the regular territory. The rates for the different classes, rather than on specific articles, are given for the reason that the classification is more likely to change than the rate. If the rate on a certain article is given, and the classification of that article is given, should the classification of that article be changed, it would be necessary to rewrite the entire index. It is much less difficult to change the record of the classification of one article than to revise all of the rates.

Classification Index. For convenient reference, the shipping clerk should prepare an index showing the classification of all articles that he is obliged to ship. This classification index should be on cards or in loose leaf, whichever is used for the rate file. One sheet is used for each article, the name of the article being written at the top.

The record should show how the article is packed, the class, and the classification in which it is found. As has been stated, more than one class may apply to a given article, depending on the manner of packing; an article may take the first-class rate if boxed, or double first-class if crated. In such cases, both classes with the manner of packing should be shown.

These classification sheets should be filed alphabetically in the file used for the rate cards, and they should be printed on stock of a different color. Most shippers will need but a few of these sheets as the number of articles shipped by one house is small, as a rule. If a large number of articles is shipped, the classification index is of even greater importance. A suitable form for this index is shown in Fig. 4.

Commodity=Rate File. When any part of the goods shipped are subject to commodity rates, a file of commodity rates is fully as important as class rates. A commodity-rate file is arranged on similar lines to the file of class rates. A card or sheet is used for each town to which commodity rates apply, and the cards are filed alphabetically by names of towns. These cards can be filed with the class rates, but a distinctive color should be used.

The record should give the names of the articles taking commodity rates, manner of packing, the point from which the rate applies, the rate, the number of the tariff, and the name of the issuing railroad. On the line below the name of the town appears the caption, see also. This is for the name of some other point to which a commodity rate applies. Boone, Iowa, for instance, may not be a commodity point, though a special rate from Chicago to Clinton is in effect. The Boone card would refer to Clinton, and the card for that town would show the rate. Fig. 5 shows a form for commodity rates.

To compile such a record of rates as has been described, requires an initial expenditure of much labor, but is a profitable investment. When once compiled, changes can be recorded with little trouble. These files will always be valuable for reference, not alone to the shipping clerk but to the sales manager and the purchasing agent as well.

A comprehensive knowledge of classifications and rates will prove valuable not only to the shipper, but to the receiver of freight. It will save any merchant many dollars in freight charges on goods purchased f. o. b. point of shipment. The shipper may not pack his goods in a manner to secure the lowest rate, or he may not give the proper description in the shipping bill. If his attention is called to the matter by a customer, he probably will make the necessary changes in his methods.

Even the proprietor of a small retail business will find a study of this subject a paying investment. The writer has knowledge of a case in which the owner of a general store saved some $165.00 in one year by carefully checking every freight bill received, making claims for overcharges, and watching the packing and routing of his goods. Surely that amount would be worth saving, even to a house transacting a much larger volume of business.

Routing Shipments. One of the most important duties of the shipping clerk is the proper routing of his shipments. Like classifications and rates, the subject requires careful study. In too many cases this subject receives little attention, but by exercising care in routing shipments, the shipping clerk can be of material assistance to the sales department, and, incidentally, to the customers of his house.

Routing frequently affects the rate. It might appear logical to suppose that the rate between two given points would be the same, regardless of the route; but this is not the case. Of two routes to a given point, one may be longer than the other. If shipping and destination points happen to be in different states, the provision of the Interstate Commerce Act which forbids a higher rate for a short haul than for a long haul comes into play. Similar provisions applying to local shipments, are found in the laws of certain states. In Iowa, for instance, such a provision covers the transportation of passengers as well as freight. One railroad is not permitted to meet the competition of another having a shorter route between two points, but must base its rate on the mileage. All of which goes to show the necessity of considering the length of the haul in routing shipments.

The above conditions apply especially to shipments taking class rates, but when goods which take commodity rates are to be shipped, the question of routing is of even greater importance. It has been shown that a commodity rate may be in effect between two points on one road, or two or more roads may have issued a joint tariff which can be taken advantage of. The question of commodity rates, therefore, has a most important bearing on the routing of shipments.

Another factor that has a bearing on the routing is basing points, which necessitates a knowledge of the points on which rates are based. In the territories governed by the different classifications, certain common points are used for basing rates. On shipments from the central states to southern territory, rates are based on Ohio River points, while, to western territory, they are, in many cases, based on Missouri River points. Class rates from Chicago to all Missouri River points are, as a rule, the same over all roads, but, to points beyond the Missouri River, rates may vary from the different basing points; that is, the rate from Omaha to a western point may be less than from Kansas City, though the rate to these basing points is the same.

The alert shipping clerk will learn the basing points in the territory to which he is shipping goods—which he can do by consulting local freight officials—and will then secure tariffs from these basing points to the towns he wishes to reach. This information he will incorporate in his rate files.

Not least of the factors which should be considered in routing shipments, is the accommodation of the customer. It is frequently the case, that of two roads entering a town, the freight house of one is more conveniently located for the shipper. Rates being equal, shipments should be routed over the road from which the customer's cartage charges are the lowest. Or the customer may have a sidetrack to his warehouse from one road, which makes no switching charge, while on every car shipped over another road a switching charge must be paid. This charge may offset an advantage in rates. It always pays to accommodate the customer. When the wishes of the customer are known, they should be granted, within reasonable limits, even though it involves extra expense.

FILLING ORDERS

In all large concerns the filling of orders—that is, the assembling of the goods—is done by the stock department. The subject is here discussed in connection with the shipping department for the reason that in many houses all orders are assembled under the direction of the shipping clerk; in others he is also the stock keeper or stores clerk.

This discussion refers more especially to the filling of orders in a jobbing house, or a manufacturing business which carries goods in stock. It does not refer to those manufacturing enterprises whose orders are for goods to be manufactured.

As a rule, all orders of a jobbing house should be filled the day they are received. If they cannot be filled complete, they should be filled as nearly as possible, and missing articles handled as explained later under the subject of Back Orders.

There is a great chance for time saving in most houses in filling orders. In many houses, too little consideration is given to the handling of goods in a manner that will save time in assembling orders. Lack of a logically planned system is responsible for much of the confused and confusing rush in the average shipping room, about the time that orders should be delivered to the transportation companies.

Here is a case in point which came under the observation of the writer. A certain jobbing house, handling drugs and druggists' sundries, occupied a five-story building. On each floor there was a stock room in charge of a stock man, who, with the aid of such helpers as he needed, kept the stock in proper shape, and assembled the goods required from his floor to fill orders.

In the drug business, the average order received from a retailer calls for a large number of articles—it is made up of small items. This is especially true of orders brought in by the traveling salesmen. As a consequence, the larger part of the orders received by this house called for goods from practically every floor.

The custom was to send orders first to the floor farthest from the shipping room—that is, to the fifth floor. The stock man assembled the goods required from his floor, placed them in a basket with the order, and sent them down to the fourth floor. Each order went from floor to floor and finally reached the shipping room—perhaps being held an hour on one floor for a single article because of other orders ahead.

A result of this method was that, in the morning, the stock men on the upper floors were rushed, while those on the lower floors had no orders to fill, except those calling for goods from one floor only. In the afternoon, the conditions were reversed. Then the men on the upper floors had nothing to do but put their stocks in shape; those on the lower floors were busy filling orders. These conditions were not particularly objectionable so far as the stock men were concerned, as they were profitably employed, when not filling orders, in caring for their stocks; but in the shipping room great confusion resulted. Goods required to fill the day's orders did not begin to come into the shipping room until late in the day, and then they came with a rush. Hurried packing resulted in mistakes, caused disputes, and lost good customers.

To overcome the difficulty, a new plan which worked admirably was perfected. A chart was prepared, along the lines of the one shown in Fig. 6. On this chart, a section was set aside for each floor, and in the first column the classes of goods stored on each floor were listed. In the next two columns a few of the articles in each class—enough to serve as a guide—were listed, and the last column showed the floor B, meaning the basement. On this chart, the location of any class of goods could be seen at a glance, and in case of doubt about the class to which an article belonged, reference to the catalogue issued by the firm gave the desired information.

A copy of the chart was given to the order clerk, who entered all orders on a billing typewriter. In entering the order all articles were grouped by floors, starting at the fifth floor. Below the list of articles from each floor a space was left, the first entry for the next floor being on the second line below.

Two copies of the order were provided for the use of the shipping clerk. When the orders reached his desk, he cut one copy into parts, as represented by the floors from which goods were to come. After entering the order number on the margin of each, he sent these sections to the stock men. Each man assembled the goods required from his floor and sent them, with his section of the order blank, directly to the shipping room. Here they were checked against the shipping clerk's copy of the order, and, as soon as all sections had been filled, the order was ready for packing. This resulted in distributing the work more evenly, and kept the goods coming regularly to the shipping room.

Another method of accomplishing the same result is to make as many copies of the order as there are floors, the complete order being sent to each stock man, who fills only his part. An advantage of dividing the order sheet, as explained, is that the stock men have no knowledge of the names of customers. This prevents a stock man from taking a list of the firm's customers to another house—an occurrence which is not entirely unknown.

Back Orders. Most concerns find it impossible to fill all orders completely; there are occasional shortages in every house. In such cases, it is the usual custom to fill all orders as nearly as possible, and forward the items that are short as soon as they are in stock, or with a later shipment.

The possibility of these items being overlooked must be provided against, and this is done by entering all items that are short on a new order. This is known as a back order. The back order should be made in duplicate and should be printed on stock of some distinctive color that will not be confused with the regular order blanks. For convenience in filing, it should also be made the same size as the regular orders.

If the number of back orders is very large, a separate series of order numbers is used, but most concerns do not have a sufficient number of such orders to make this necessary. The more usual custom is to give the back order the same number as the original of which it is a part.

Of the two copies of the back order, one goes to the shipping clerk, while the other is kept in the office. The office copy is used to follow up the shipment of the order. It is necessary for the shipping clerk to know immediately when goods required to fill back orders are received. When a separate receiving clerk is employed, the back order is sometimes made in triplicate, one copy for the receiving clerk, who notifies the shipping clerk when the goods arrive.

When a back order is filled, the shipping clerk returns his copy to the office. Invoices are made in duplicate, one copy being filed as a sales sheet. The two copies of the order are filed with the corresponding copies of the original order. A most satisfactory plan is to file one copy numerically and one alphabetically, making a cross-index. A simple form of back-order blank is shown in Fig. 7.

CHECKING SHIPMENTS

One of the vitally important problems in connection with shipping is the proper checking of items in each shipment. To receive complaints of shortages is very annoying to the shipper—especially so when he is not in position to prove that the items claimed to be short were shipped—but, rather than take the chance of losing a customer, he usually pockets the loss.

Shipments should be checked at every stage in the process of filing the order, by everyone who handles the goods. The stock man should check his part of the order as he assembles the goods, and again before he forwards them to the shipping room, or the next floor. When received in the shipping room, the goods should be checked against the shipping clerk's order, and again just before they are packed.

It should be a positive rule that all goods shall be checked when they are placed in the cases. The items should be called off by the packer as he handles them, and checked on the order by a checker. This is a safer plan than calling off the items from the order, as it insures a positive check on the items actually packed—not what should have been packed. All order blanks should be provided with a separate column in which to check the items actually shipped, and quantities should be entered in this column even if the order is shipped in full. The checking column on the order blank is shown in Fig. 8. If the system of entering orders includes a copy to be used as an invoice, the items are entered in this column after the shipping order is returned to the office.

The initials or numbers of both packer and checker should appear on the shipping order. It is also a good plan to place in each case a packer's slip, shown in Fig. 9, giving the number or initials of the packer and instructing the customer to return the slip with any claim for shortage or damaged goods. In some houses, it is the custom to make the packer's slip a duplicate of the order, listing all items packed, in which case, it makes a convenient receiving slip for the customer.

While not offering positive insurance against mistakes, a thorough checking system will reduce errors in packing to a minimum, and will most certainly pay for the labor involved. In large houses shipping a large number of packages over several different railroads, a further complication arises through the liability of deliveries being made to the wrong freight house. Where several hundred shipments per day are made, it is not uncommon for a teamster to leave a package at the wrong road, finding himself short on his deliveries at another road; or the mistake may be made in loading the drays.

One well-known mail-order house has overcome the difficulty in a simple manner. This house is shipping several hundred packages a day by freight, over eight railroads. The basis of their shipping system is a color scheme, each railroad being designated by a different color—that is, the New York Central is represented by green, the Erie by blue, etc.

The shipping floor is divided into sections, one for each railroad, and one for each express company. The low partitions that separate the sections are painted in the colors representing the railroads, and over each is a sign bearing the name of the road, also printed in the corresponding color. All packages are taken directly from the packing room to the sections of the shipping floor representing the roads over which they are to be shipped.

In all blanks used in shipping, the same color scheme is carried out. This includes shipping orders, packing orders, invoices, shipping receipts, and labels. All orders are properly routed before they are distributed to the billing machine operators for entry. Each operator enters orders for certain railroads—from one to three, depending on the distribution of the trade—and is supplied with blanks of proper color for those roads only. Every order is then entered on blanks of the color representing the railroad over which the shipment is routed.

In Fig. 10 is shown a label which represents this color scheme. Across the end of the label is a solid block of color, with the name of the road in an open letter. All printing on the label is also of the same color. If the order is properly routed and entered, there is very little chance for shipments to go astray. On every blank and on the package itself, the color of the road is a prominent feature, and since all blanks are written at the same time, they must correspond. Should a package be placed in the wrong section, it is practically certain that the error will be discovered when the goods are loaded on the dray.

EXPORT SHIPPING

Export shipping is a subject about which the average American house knows but little, and herein appears to lie the cause of the loss of much foreign trade. This is especially true of trade with other than English-speaking countries. But the real fault lies farther back than in the shipping department.

The trouble starts in the sales department. Export business is undertaken without special preparation, and an attempt is made to apply the methods used in handling domestic trade. Special instructions in regard to packing, for instance, are ignored because the American thinks he knows more than his customer in a foreign land.

Before export business is even attempted, the sales department should become thoroughly familiar with conditions in the country with which it wishes to do business. Some man in the department should study the customs regulations, the descriptions necessary, the kind of packing needed, and the size of package best adapted to the country. Above all, he must study the desires of the trade, and conform to them, if he expects to make and hold customers.

Special importance is attached to the question of packing and describing the goods. No matter how unreasonable the request of the customer or the foreign salesman may seem, it should be complied with, for it is made for some good reason. A request of a merchant in Omaha, ordering dry goods from Chicago, that goods ordinarily packed in a large case be packed in small oblong boxes, might very properly be ignored; but not so if the customer is located in a South American republic. There, if the goods are to go to the interior, they must be transported over the mountains on the backs of pack mules.

Besides making the packages of suitable size, goods for export must be packed to withstand hard usage, and must be well protected against the elements. Goods must be fully and accurately described in order that they may pass the custom house. The dimensions of each package must be shown on the shipping bills, for freight rates are based on the space occupied in the hold of the ship, rather than on weight.

In a recent address on trade conditions in the Latin-American countries, Wm. Harley Porter, Deputy Captain of the Port of Cienfuegos, during the occupation of Cuba by the United States government, made some very pertinent suggestions on these questions, some of which are published by permission—as follows:

To secure South American trade, we must first train salesmen. They must make an exhaustive study of the different South American tariffs and at least know Spanish. They must be willing to accept instructions as to shipping, and be powerful enough to insist that they be carried out literally. And it would be a good thing for them to take a kindergarten course in carpentry and blacksmithing, so that they would not continue the stupid, expensive blunders of American houses in the packing of goods.

I don't know how to drive that last statement home hard enough. Our consuls plead with our exporters, and our Government distributes volumes freely on the subject, yet there is no apparent improvement.

I confess that until I had some first-hand experience, I supposed that the packing evil was a convenient sort of filler, with which Consuls padded their reports for want of better material.

In order to fit out the custom house of Cienfuegos, Cuba, with new office furniture, we placed an order amounting to nearly one thousand dollars with a Chicago house that brazenly advertised that it made a specialty of export business. Their booklet was encouraging, and the prices really low. So we ordered roll-top and flat-top desks, cashier's desks, office chairs, tables and card cabinets, and then worried, for fear that the goods would not arrive before the end of the fiscal year, then rapidly approaching, in which event, our furniture appropriation would revert to the island treasury.

Six weeks from the day the order reached Chicago, the goods left New York—time enough to have had them come from Hawaii. With the goods came a single invoice. The vouchers in triplicate, which must be filled properly before the account can be paid by a governmental department, had been thrown aside as of no use. To protect the exporter, a voucher was drawn, for the ship reached port on June 30, the last day of the fiscal year. Several dollars were wasted in cable messages to expedite the return of new invoices, and the goods were unpacked.

Not one piece of furniture, save a few chairs, was found whole. No American, in the States, would have accepted the goods. We had paid for them. A letter of remonstrance brought back a churlish answer, written in a cocky American spirit of superiority, to the effect that possibly some one outside could tell that house something about packing their own goods, but they would be greatly surprised to meet such a person.

The trouble lay in the thinness of the packing cases. Goods are loaded into a ship by casting a rope sling about their middle, by which they are hoisted up and let down, often with a run, into the hold. Our desks, without sufficient outer protection and not being built on the principle of a truss bridge, naturally collapsed. The cases were none too good for a railway journey, and were certain to be damaged at any Central or South American port because, in nearly every case, unloading is done from the ship to a lighter, and from the lighter, by main strength and awkwardness, to a wharf.

I cannot recall one instance in which American houses carried out instructions literally. I believe that there is a great future for an American exporter who will let the man on the ground do his own thinking, and take it for granted that he knows what he wants and how he wants it. The exasperation of a man who is weeks or months away from the markets, and who finds that substitution has been practiced, or his goods so packed that destruction was plainly invited, cannot be adequately described by a man on my income.

We bought a typewriter in New York, one time, for two reasons: We could get the liberal discount, allowed the government if we bought direct from the maker, and we could evade a 25% duty if we received it through our custom house and not through another. Also there was a line of steamers from New York to our wharf.

Some five weeks after placing the order, we were notified by an express company in Havana that it had accepted for our account a typewriter, and that when the duty, plus accrued express and forwarding charges, amounting to $45.O3, were paid, it would be dispatched in our direction.

We were out $40.03 because some fool shipping clerk had insisted on trying to do our heavy thinking. We had given him the name of the steamer by which the machine was to be shipped, but he had discovered, in some way, that steamships will not make a bill for less than a metric ton. That, he doubtless learned, would cost us $5.00. The package only weighed about 30 lbs., so he started it off by express. His brain did not carry far enough for him to learn that only one American express company crossed the Florida Strait and naturally chance took it to another company. Two changes were made in express companies before the box reached the coast and the package sauntered about in our beautiful Southland for more than a month before it landed in Havana.

Had any Spanish merchant been subjected to the invariable annoyance which fell to our lot when we endeavored to patronize American houses, he would have given up in despair and remembered the adage of the burnt child, forever.

And, unfortunately, the carelessness of American shippers often costs the foreign merchants good, hard dollars. Tariffs in Latin-American republics are fearfully and wonderfully made, and there is nothing that a pin-headed government employe enjoys more than inflicting a fine for a slip in complying with a little red tape.

Here is a case in point. A large house in Mexico City bought a carload of chairs over here, and with the order sent the shipping forms prescribed by the Mexican government. A very explicit letter was sent also, saying that consular invoices would be provided by their custom house broker in Laredo, who would receive the goods at the border, but that the shipping forms must be filled out, each package numbered with a serial number on the forms. Full description involved, of course, a statement as to the kind of wood used, so that the duty might be easily adjusted.

The goods, however, were simply consigned as so many bundles of chairs, weight so much. The shipping lists were ignored. The innocent receiver of those goods was fined both because they had not been properly described and because the weight was grossly understated. It cost the Mexican house $800 and when the American was asked to settle the charges caused by carelessness, or pig-headedness, he merely answered that he was not going to settle any bills with the Mexican government.

The Mexican firm settled—it had to—and posted every importer in the republic in the matter, so that not only will that American house not sell any more chairs in Mexico, but Americans generally have been given another black eye.

There is a good reason for careful custom regulations, and the exporter should know that they are partly for his protection. For instance, they usually require that a certain number, generally ten per cent, of all packages shall be opened and compared with the shipping list. If these packages, chosen at random, are correct, the consignment is delivered. But if any variation is found, fraud is assumed, and every package is thoroughly examined, usually with more or less damage.

It is customary for English and German firms, in the packing of small articles, to use different colored pasteboard boxes, which are often decorated with pictures indicating the contents. For instance, in a large packing case containing a stock of gentlemen's furnishings, all collars will be in boxes of one color, socks in another, cravats in another, etc. The large case is lined with tin, by the way, and after packing, the tin joints are soldered around the top. Here is the English system: First, the small boxes, individualized as much as possible; then heavy wrapping paper, then a tin lining inside of an outer wooden casing, the latter being well made and reinforced with iron straps. Last of all, directions and addresses are stenciled in large, clear block letters. The Germans often use oiled paper between the tin and the inner packages, so that even if the tin is punctured, the oiled paper will resist the sea air, which invariably injures delicate fabrics.

The American idea seems to be to put as much as possible in a large, thin box or a poorly bound bale. The European, whose agents study conditions on the ground, knows that much interior transportation in Latin America is packed by pack mule, and therefore uses medium-sized oblong boxes, two of which make a good load.

I cannot emphasize too strongly the necessity for careful description of goods to pass them through a custom house with the least inconvenience. Mixed consignments must pay the highest duty assessed against anything found in a lump or poorly described quantity. If you deal in bolts, for instance, you may not merely say 1,000, 3×2×? bolts, but you should say whether they are cotton, linen, or woolen. They have to know, before they can assess duty.

Instead of a ringing peroration about American pluck, progressiveness, and other non-essentials, let me give you some shipping rules, if you are going to have a try for South American trade.

Secure shipping list forms beforehand and find out if consular invoices are needed.

Pack your goods in small packages, for you will pay freight on metric tons and they are based on cubic measure and not on weight.

Pack well, for tons of stuff will probably lie on your cases.

Give each package a serial number and describe it by that number, on the shipping forms.

If your goods can be damaged by sea water, use tin-lined cases.

Your invoices should show not only number, measurement, and exact contents of each package, but their gross, tare, and net weight, for in many cases the container must pay the same duty as the contents.

Be sure that your forwarding agent is reliable, for the law allows him many charging privileges if you are careless in providing for contingencies.

Contract, if you can, for through transportation and get from the transportation companies the requisite export manifests to accompany shipment.

Make triplicate invoices, one to accompany the goods and two to be mailed to the consignee. One of these will be turned over to the custom officials, so in case the invoice sent with the goods fails to come through, and that often happens, the triplicate can be accepted. Without an invoice your goods cannot leave the ship, and I know of cases where cargoes have been held awaiting invoices for eight weeks.

And, in conclusion, remember that sentiment is not the foundation for foreign trade. If we sell abroad we must do so on merit and by foreign systems—not our own.

FREIGHT CLAIMS

Freight claims are an ever present source of annoyance. Every shipper, and practically every receiver, of freight finds it necessary to make claims against the railroads for freight overcharges, shortages, and damages to goods in transit. Some houses find occasion to make but one or two claims a year; others constantly have several claims on file, aggregating a large number each year, but no matter what the number, they must be given proper attention.

Handling freight claims is not one of the usual duties of the shipping clerk, nevertheless, it is a proper topic for discussion in connection with the subject of shipping. The traffic manager, when one is employed, handles the freight claims; otherwise the details are handled by some other minor official—as the cashier or the purchasing agent.

The adjustment of claims involves, usually, a large volume of correspondence, and requires a man of tact. He must possess patience and persistence to a marked degree. Diplomacy of a high order is necessary in his correspondence, and promptness is an important factor. Threats have little effect, other than to delay adjustment of the claim.

Before a claim is presented, all information pertaining to the case in possession of the claimant must be assembled, and all facts should be incorporated in the papers filed. A bill should be made against the railroad for the amount of the claim, and to this should be attached the freight receipt or other voucher. These papers should be accompanied by a letter giving a plain statement of the basis of the claim; if for an overcharge, the number of the tariff and the classification on which it is based should be cited. The claim papers should be as complete as it is possible to make them, presenting all facts having a possible bearing, otherwise they will be returned by the claim agent of the railroad for further information. Some of the questions asked by the claim agent may seem trivial to the claimant, but the answers are necessary to him in completing the files of his office. When claim papers are returned through the local freight office, the information asked should be given and the papers returned at once.

Claimants become very impatient over delays in the adjustment of their claims, forgetting that where they handle perhaps a dozen claims a year, the railroad claim agent must handle thousands, involving amounts ranging from a few cents to many hundreds of dollars. They also overlook the fact that a shipment has passed over several roads, and that before the claim can be adjusted, it must be ascertained on what road the damage was sustained. The different roads involved must adjust the claim between themselves, before they can tell where the money with which to pay it is coming from. The papers must pass through the hands of agents at all junction and transfer points, and the claim departments of all roads involved, before the claimant can expect a reply.

On the other hand, it is not good business to rely solely on the railroad. Claim papers sometimes repose indefinitely in the desk of some local freight agent, until brought to light by a persistent follow-up; occasionally the papers are lost. A follow-up of freight claims is, therefore, a necessity. The shipper who is most persistent in following up his claims, is usually the beneficiary of the most prompt service.

Railroads number all claims as received, and invariably refer to them by number. It is an excellent plan, therefore, for the shipper to adopt a numerical system for the purpose of identification. It is quite important that all correspondence relating to a claim be kept together, and this is best done by using a folder for each claim. The number of claims is so small that it is not necessary to use an entire drawer for claims; they can be accommodated in the front of a drawer used for regular correspondence.