TRANSPORTATION W. H.ATACK E. I. DU PONT DE NEMOURS ti CO.,INC., WILMINGTON 98. DEL.
The greatest disadvantage to the chemical industry in the its products, is necessary to ARTICULAR localities southwestern states is their distance from consuming the continued growth and and states have indip r o s p e r i t y of industry in markets and the resultant high costs of transportation. vidual and distinctive aspects every state; it is in the public However, the Intercoastal Canal, the inland waterways, materially influencing the interest and should be recand the Gulf offer facilities for volume shipments at less kind or type of transportaognized as a sound and expensive rates than rail or motor vehicle and have allowed t.ion available or necessary to legitimate practice. the Southwest to keep i n step with its industrial growth. meet their requirements. The geographical disadvanNew and improved methods of transportation are conTransportation i n c l u d e s tages of one state or group stantly being developed for the movement of chemicals. three prime categories: air, of states cannot fairly and Specially constructed tank vessels have recently been land, and water. Airplanes, justly be equalized by prefplaced i n service for shipping flammable liquids and liquebarges, ships, motor vehicles, erential rates to offset the fied compressed gases between the Gulf and the Atlantic pipelines and railroads. geographical advantages of Seaboard. Such chemicals are not adaptable to tank These words spell the mode other states. Nor is it within truck shipment, and studies proved that rail, water, and or method by which transthe province of the Interstate rail movements were more practical and economical than p o r t a t i o n i n A m e r i c a is Commerce Commission to other available methods. carried on. equalize economic conditions. I n general, transportation However, grouping of origins by air includes air express, air and destinations within reasonable limits for rate purposes has freight, and passenger, Water transportation includes common, long been recognized and accepted as practical, fair, and lawful. contract, and private carrier by barge and by vessel. Land Cheaper means of transportation, by water when available and by transportation embraces primarily pipelines, common-carrier private motor carriers, are often resorted to or made necessary berailroads, rail express, freight forwarders, plant facility railroads, causeof geographical disadvantages or other competitive influences. and common, contract, and private carriers of persons and propThe rate structure for rail transportation as it exists today is erty by motor vehicle. These are the principal transportation most complex. That situation has been brought about to a services b y land, air, and water n-hich may be used by industry large extent by: in furtherance of its primary undertaking-the production, manufacture, and sale of articles of commerce. 1. The cases decided by the Interstate Coinmerce Commission The prosperity of a given industrial enterprise is generally, if (affirmed by the United States Supreme Court, known as Docket Nos. 28310 and 28300), embracing a uniform classification and not always, directly related to its volume of sales, which in turn is class rate scale for application throughout the United States east dependent primarily on its ability to reach the largest number of of the Rocky Mountains and the interim requirements therecustomers. Thus the availability of tramportation best suited under. to meet the requirements of a particular commodity or material 2. The sewn e neryency and permanent blanket increases, since 1945, of all rates together with their various maximums, coupled with its transportation expense, circumscribe the sales minimums, and variations within and between the several rate territory and effectively set the limits within which a product territories. may be sold or produced. A “freight classification” is a published list of all aiticles Young men were once admonished to make a career by finding accepted for transportation, showing the particular class to out what the public wanted and then filling the indicated need. which each article is assigned. Thus, a class rate is a rate appliThe modern chemical industry progresses by finding and produccable to a class rating to which articles are assigned in the freight ing things that the public does not know it wants. New declassification. Under the class rate system the 1st class rate is velopments and products produced in the chemical industry 100%. Most articles are assigned ratings lolTer than 1st class, create many new industries and h d new outlets for established such as 5th or 6th class; these ratings bear a fixed percentage businesses. relationship to the 1st class ratee established between the various When new products of the chemical industry come into being, origins and destinations. industrial and carrier problems in transportation arise, principally Whenever the volume of movement or sp(4al conditions warthose related to gathering raw materials and their coordinated rant, commodity or exceptions rates are published. An excepand economical flow into the manufacturing plant and those retions rate is a rate arrived a t by using the class rate scale but a lated to the economical flow of the finished or semifinished proddifferent and usually lower rating than that provided in the ucts to the consumer. classification. Commodity rates apply only on articles specifihIanufacture, supply, and distribution require an accurate cally described and published in so-called commodity tariffs. evaluation of methods of transportation from the standpoint of Commodity rates generally supersede the application of both availability and inherent economies. The next step generally class and exceptions rates. I n the absence of a commodity rate, involves evaluation of a particular type of carrier-that is, comthe exceptions rates apply. I n the absence of either exceptions mon, contract, or private-and weighing their various advantages or commodity rates the classification ratings and class rates apply. and disadvantages, taking into consideration the nature of the ram I n Docket 28310 the Commission held that classification ratings materials or the manufactured or semimanufactured products must be uniform in all rate territories. Today they differ-for and their adaptability to the several modes of transportation example, the same article may carry a rating of 4th class in the available. Individual states have geographical advantages in West, 5th class in the East, and 6th class in the South. In accordance with consuming territories and their natural products. Docket 28300 the Commission prescribed a uniform mileage scale The right of industry to equalize transportation costs from of 1st class rates and uniform percentages of first class for the competitive shipping points, as a matter of contract in the sale of
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INDUSTRIAL A N D ENGINEERING CHEMISTRY
various lower c h s . Today 5th class in the East is 35% in the 8outh 45%, and in the West 37.5% of their carreaponding 1st class rates. The net reault of these two dockets is to require, in the E&, South, and We&, uniform claasi6cstion ratings; a uniform mileage d e of 1st class rates; and uniform percentages of 1st clam for all lower clsailication rating. Perhapa the greateet future change in the rate Structure of the United S t a h will result from the pending uniform system of class r a w and uniform classification ratings. Although the scope of these pmceedings de& directly only about 5% of the o v e d l trsnaportation picture, it ia quite likely the baaic mileage class rate scale ultimately p d b e d will materially inauence the level and relationship of future wmmodity rates, as well as the current exceptions and commodity rates. If f u h m and exi+g exceptions or commodity rates are eabblkhed or revised to a uniform percentage of the new baaic clasa rate soale, charges of discriminations in freight rates of one section of the country vem another will be difficult to subatantiate, becaw, generally everyone will then be requkd to pay the same rats for approximately the w e distance on the enme commodity. Whether such a program is carried out in years to come is problematic. If it is, no one can accurately foretell at t h i a time whether some sections of the country will benefit or lose. Much will depend on the extemt commodity and exceptions rake am revised to r e k t a uniform relationship to the prescribed class rate d e . Moreover, it would seem that departurea from a uniform srale of w m o d i t y and exceptions ratss would of neces Bity be mntinned where water, rail, or motor carriers compete for the BBme t d i c . The gestest W - t a g e in the southwestern states todsy is their distsnce from m a y consuming markets and the resulting high transportstion wst to reach those markets. However, there are the Interooastal Canal, the inland waterways, and the Gulf, facilities which may be and are uWhed for barge and vesael transportation of volume shipments of m a y products at cheaper rate than rail or motor vehicle. Experience with land and water transportation in the Southwest indicates it has kept in step with induatrid growth and adequately and efficiently meeta service requiremente. Although rates sometimes seem to be bigh on new or particular products, on the whole they are fair and within the limitationsset by state and national regulation by which the carrim am g o d . In general, carriers are as much interested in obtaining new business as in industry, regardless of the p d c u l a r d o n of the country involved. The rail liues serving the &uthw& have in numerous instances initiated and published readjustments in their interterritorial commodity rates, based on the lowest soale observed in other rate territories. Paasibly the major d g territory for chemicals produced in the & u t h d is in “official territory.” 05cial territory ia mughly that part of the country east of the Mieaiesippi and nortb of tbe Ohio and Potomac Rivera, to the Atlantic &board. One of the problem confmnting shippers in securing readjust menta in raw between official and southweatem territory ia the &tenoe of a divisional dinputs between the rsil Carriers mrving tbeze ierrihries. Quits often the southwestarn lines will approve and support a rate adjustment only to have the official linea refuse to join in ita publicatiou or vice wma. The lines in one territory, chiming the d i v b i d demands of the other lines, leave them with little if any profit and no incentive to sgree to a reduction in rates. In t b diviaions cae~tied up with the old Docket 13635, scale d cbss rates prescribed and now in effect between official and southwestern territories, the divisional factorsallowed the soothlines we inlhted. For example, if the IengtJ~of haul in both tamitoh ia 500 miles, the rate ia not divided 50/60, but the muthwestern m h g e is incressed 25%. This method was originaUy prescribed by the commission becauae of the relatively low dnancial position of the southwestern &era, alw beowae
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the basic scales of c l w rates in
level than within official territory. The higher basis in the Southwe& was deemed necessary -. because of the relative sparsity of t r a 5 c and the resulting needs of the southwest lines for greater revenue per car, whereas, the official lines operating in z high traffic density territory did not require as much revenue per car. In the most m n t ~ 8 8 8 ,Docket 28300, the luteratate Commerce Commission found that there wers no longer extenuating circumstances which required a higher or different level of class rates eaet of the Rocky Mountains, within or between the several rate territories; thus, the official carriers now contend there ahould no longer he an arbitrary intiation of carrier revenue in the Southwest. Under the interim adjustment prescribed in Docket 28300, the basic class rate scale, under which a large volume of traffic movea within official territory, was i n c r e a 10% primarily ou the theory that the carriers serving that territory required more revenue. Could that not have been acwmpliahed in whole or in part by a readjustment of the interterritorial divisions? On the other hand, interterritorial rate adjustments are still often withheld because the southwestern lines continue to claim the hieper divisional factors, prescribed when the southwestern carriers were making a poor showing financially compared with the official carriers, although the Commiasion has since found the h c i a l position of the official lines ia not up to that of the western lines. It ia true that under the inkrim adjustment the interterritorial class rates were reduced, but the bulk of traffic from the Southwest movea on commodity and exceptions rates, on which there were no reductions. Thus,for some time shippers have in effect been paying on both sides of the diapute. However, the Inters h t s Commerce Commission now has before it the divisional controversy which should eventually result in eliminsting divisional disputes fromahipper and carrier negotiators for lowerrah. New and improved methods of tranaportation are constantly being developed for the movement of chemicals from the southwestern &tea to consuming markets at lower &, for long dietance transportation. For example, for the tranaportstion of tlammable liquids and liquefied compreeaed gaaea in bulk, placed in specially constructed tank vessels have recently aervice and are operating regularly and efficiently b-n the Gulf and the Atlsntic %aboard. These particular chemicala are shipped from inland points in tgnk cars to storage tanka at the Tellas porta from which they are pumped directly into tank vesaels and transported by water to storage tanka on the eastern seaboard. From the tanks the material is reahipped by tank care to customers. Becaw of the nature of these chemicals they are not adaptable to tanktruck transportation and studies proved that rsil, water, and rail movements were more practical and ecouomical than other available methods. Recently D u Pont estgbliabed a mixing and canning plant at 8t. Louia, Mo., which comingles materials produced in Texas with materials produced in one of their w t e r n plants. The trnneportation to St. Louia from the soxthwest and ea8tern plants is by barge. Thin method materially reduces the tranaportation expenae which would prevail if the materialproduced in the Southwest were shipped into the eastern plant for mixing and distribu-
tion. At one of D u Pont’s Texas plants, situated on the W i n e River, liquid chemicals are loaded directly into barges. The bages are then towed to deep-nea anchorages where the c h e m i d s am pumped into tank vessels for movement to points on the Atlantic
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Seaboard. On arrival a t eastern ports, the cargo is pumped into shore tanks and from those tanks the material is reshipped to consuming plants and customers by tank cars and tank trucks. This method results in substantial savings in transportation costs under all-rail transportation and increases flexibility in meeting requirements of plants and customers. Barge transportation is utilized from the Texas plants to the vessels because the river is not deep enough to accommodate ocean-going vessels a t that point. h study of the use of pipeline, tank cars, and barges for movement to shipside proved the latter t o be more practical and economical. The use of either tank car or tank truck shipments from the storage tanks on the eastern seaboard is dependent on the location of the customer and his distance from the storage facilities, also his ability to take materials in tank car or tank truck quantities. Movement by tank truck gives a greater flexibility and efficiency for short hauls. The turn-around time for a 12,000gallon tank car for a short haul map be 4 or 5 days, whereas 4000gallon tank trucks may make three trips and supply the same quantity in 1 day. The use of tank trucks for short hauls affords the nmxinium eficiency in meeting customer’s requirements and conserves the use of shipper-owned tank cars for longer hauls. Sulfur is shipped from Louisiana and Texas producing points by ocean vessels to the Atlantic Seaboard and by barges over the inland waterways to various points, such as Chicago, Ill., Cincinnati, Ohio, and Nashville, Tenn. Sulfur also moves by barge over the inland waterways for transshipment by lake vessels a t Chicago to points such as Cleveland and Toledo, Ohio, and Detroit, Mich. Liquid chemicals are also transported by barges on the inland waterways between the Southwest and points such as Pittsburgh, Pa., and Charleston, R. S’a The use of barges and vessels for the transportation of various commodities is brought about primarily by the concurrence of three prime conaiderations : 1. A substantial volume to be transported and regularity of movement 2 . Adaptability of the articles to water transportation and facilities for storage a t origin and destination 3. Economies that can be effected in transportation costs bj. using a somewhat slower but cheaper form of transportation
Substantial quantities of chemicals move between the Southwest and other territories by railroad, motor vehicle, and freight forwarders. These modes of transportation are best adapted to the transportation of certain products and are necessary to meet varying trade requirements. Use of motor vehicles generally results in faster service but often a t greater costs than by railroad for long distances. Freight forwarders approximate the same service from the standpoint of time as carload freight service and at rates somewhat lower than the less carload freight rates. Straight carload shipments are made to volume consumers a t the lowest carload rates established by the rail carriers. Consolidated carloads carrying materials for several consignees and destinations are also made up, either under a “stop-off” or pooling arrangement, whereby the benefits of the lower carload rates and faster carload service is obtained for customers who purchase in less than carload quantities. Studies have been and are being made as to the practicability of using pipelines for interplant movement of certain chemicals within the southwestern states. The transportation of many chemicals involves certain hazards if the materials are not properly packaged and labeled. The Interstate Commerce Commission has been authorized by federal statutes to prescribe detailed and complete regulations as t o packaging, marking, labeling, and transportation of all dangerous articles transported by railroads and motor vehicles. As a result, today a very comprehensive set of regulations afford the maximum safety in transportation. Under the existing orders of the Interstate Commerce Commission promulgated as War Emergency Orders, in 1943, all motor vehicles designated as private, contract, or common
Vol. 43, No. 8
carriers, whether operating in intrastate, interstate, or foreign commerce as well as the railroads engaged in the same types of commerce, are required along with the shippers employing them to adhere to the Interstate Commerce Commission regulations for the safe transportation of dangerous articles. Because of the complete coverage of the I.C.C. regulations pertaining to the packaging, marking, labeling, commodity descriptions, and definitions of dangerous articles and the detailed regulations that shippers and carriers must comply with to ensure the safe transportation of such articles in both intrastate and interstate commerce, very few of the states have endeavored to set up additional or duplicate regulations for the same purposes. Some of the states do have ordinances or statutes restricting operations through tunnels, but such restrictions are permissible under Section 810 of the I.C.C. regulations which provides: Kothing contained in these regulation? shall be so construed as to nullify or supersede regulations established and published under authority of state statutes or municipality ordinances regarding the kind, character, or quantity of any explosive or other dangerous article permitted by such regulations to be transported through any urban vehicular tunnel used for mass transportation. Rhether a specific article may be transported in a particular kind or type of container in intrastate, interstate, or foreign commerce is dependent on what the regulations of the Interstate Commerce Commission provide in regard thereto. For example, various compressed gases may be transported within the states and between the states by tank motor vehicles. Anhydrous ammonia, carbon dioxide, liquefied petroleum gas, nitrous oxide, and sulfur dioxide are authorized for shipment in tank-motor vehicles meeting I.C.C. specifications for construction. Other compressed gases, such as chlorine and methyl chloride may not at this time be transported in tank-motor vehicles either in intrastate or interstate commerce. However, they may be transported by motor carriers when in cylinders or in what are known as ICC 106-A-500 tanks, commonly referred to as ton tanks, When new products, falling within the I.C.C. definition of “dangerous” are produced or improved containers are developed for their transportation, applications are made through the Bureau of Explosives, 30 Vesey St., New York, N. Y., to the Interstate Commerce Commission, for amendments to their regulations. For air and water transportation the Civil Aeronautics Board and the United States Coast Guard follow the general pattern set by the Interstate Commerce Commission. The fact that no serious accident, due to a lack of proper regulatory requirements, has occurred in transportation for several score years clearly indicates the adequacy of the regulations. The relatively few serious accidents involving chemicals, which have occurred during the past few years, were not due to the lack of proper and complete regulatory requirements, but were either due to failure to observe such requirements or to accord such products safe haadling while in transit. Considering the number of deaths and injuries on the highways caused by the passenger automobile or the accidental deaths or injuries occurring within the homes, which are within a few thousand of those on the highways, it is evident that most accidents result from failures in human conduct, which cannot be fully controlled b y legislation or regulation. Driving a car or motor vehicle over the highway involves the safety of the general public and is therefore subject to public regulation; the individual’s conduct in his home does not ordinarily involve the general public and is therefore a private matter not subject to public regulation. Public safety on the highways will not be achieved by formulating more restrictive measures directed to the transportation of chemicals. Much will be accomplished if all of us teach, exemplify, write, and talk about safety until everyone driving a car becomes thoroughly safety conscious. Safety on the high-
INDUSTRIAL A N D ENGINEERING CHEMISTRY
August 1951
ways require the exercise of good sportsmanship and good citizenship. These are basic obligations every American owes to his family, his neighbor, and himself. One method by which a state or municipality can effectively bar the chemical industry from ita borders or destroy it, is to enact legislation or regulations to govern the tranEpOfiatiOn of ohemicals over and above, or di5erent than tbe existing requirements of the Interstate Commerce Commission. The need for uniformity of transportation regulations witbin and between the states as they a5ect the chemical industry and safety on the highway is patent. That field of regulation has been adequately and effectively occupied by the Federal Government and there is no public need for additional regulatory requirements by states or municipalities. To foster, protect, and ensure the continued gmwth of commerca in the United States, some refinements of the Interstate Commerce Act, as it applies to transportation by land and water, may be necessary. For example, the lack of uniform legislation pertaining to the size and maximum weights of motor vehicles is a hardship on industry and carriers alike. The restrictions under e furnishing of the Act, placed on shippers to regulate the u ~ and v e ~ l bchartered by them, should be modified and made more liberal. Although the individual requirements of tbe states 8 8 to size and weighta of motor vehicles vary in the Southwest, all adhere to the Interstate Commerce Cornmiasion requirements for the safe transportation of explosives and other dangerOUE articles, which is 88 it should be. In the early days of thia nation, transportation wm conducted by slow and costly methods. Settlement and development bf
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the country were confined to the eaetem seaboard within reach of water tramportation or such land transportation as might be carried on by ox cart, pack horse, and wagon trains. The d e v e l o p m e n t of the steam engine and the opening of the West by the railroads unlocked the East which poured forth its pwple to the West hy the thousands-bankers, builders, merchants, miners, lumbermen, and cattlemen. The opening of the West by the railmads wm the foundation for practically every job in America. All modes of transportation by land, air, and water in America were created and exist today, with few excep tions, as private enterprise. They are composed of the small, moderate, and large systems, each contributing its particular and apecialid services to industry and the communities served and enhancing the benefits derived from a healthy and competitive national transportation syatem. Transportation time plus tramportation Costs are the primary considerations of both shippers and consumers in choosing an available means of tramportation. Indian travois and canoe, ox cart, pack horse, Conestoga wagon, canal boat, barge, sailboat, steamboat, steam railway, electric railway, Diesel railway, pipelime, motor vehicle, airplane-them words spell the history and development of transportation in the Southwest, but not the end of development or progress.
OUTHWE
R m s r v m April 18. 1951.
Markets for the Chemicals Industry W.PAUL B R A " BUPXAIJ O F BUSINESS AND ECONOMIC FSSKAFiCW UNIVERSITY OF ARKANSAS,,-AF
A
ARX.
The Southweat a a market for the chemic& industry The chemicals industry did eoonomioe of regions in k much to offer. It. advantage4 will be found in a grownot locate in this region priAmerica today reflects the ing population. the concentration of people into citir M marily to market its prodtremendous change which marketing centem, incnand income, dive.& and ucts. Marketa and markethas occurred in the nation stabIe employment opportunities. *an improved and ing proepects have been changing agricultun. a rapidly expanding industry, overshadowed by other facduring the past 10 years. s p e c d u d commodity markets, tramportationfacilities, tors. Ran materials have The economy of any region is a part of the whole and and the dimination of freight rate inequities. been the principal item in atthe pmceae of ita develop tracting chemical manufaw turing. In addition, labor, ment is determined by this relationship. In this respect the Southwest stands out a8 climate, utility rates, the policy of decentralization,and favorahle an area of growth and progress. The rate of increase of state and local government attitudes have all contributed to the ita economic development an meamred by population, employlocation of the industry in thia region. Although regional markets were not a significant factor in the ment, income, and manufacturing exceeds that of the United states average and that for any other specific area in the country original location of the industry in the Southwest, they have except the West Coast. The trends which are underway in the taken on significance 8 8 the industry has become stabilized. Since the present industry in the region is primarily making region are believed by many to foretell an even greater Southwest. The gmwth of the chemical industry in the Southwest ha^ nochemical compounds or intermediates which must be sold to other companied this regional expansion. In fact, it has heen a major chemical industries for processing, the future of this broad indue component. It is held out 88 one of the real opportunities for try in the region lies in the development of nianufacturing plants the future. Most nf the major chemical companies already have which will process primary chemical products into consumer established plants in the region making an investment in the Gulf items. This means the development of both an industrial and Coast area alone of about a billion dollars during the war, and consumer market in the region. The future of the total industry since then half again 8 8 much bas heen invested or earmarked for is somewhat dependent upon this. planta and equipment. This means that the chemicals industry In analyzing the Southwest as a marketing area for the chemifound the basis for mccess in the economy of the Southwest. cab industry there are two westinns which need t o be answered: N examination of the
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