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innovations or changed situations brought about by the Act, The

Motor Carrier Act of 1980 and Commission decisions are also being

considered to the extent possible in light of the relatively

short time since the new legislation became effective.

The

newness of binding estimates and the other rate and service

innovations being offered necessarily limits the scope of this

review.

It will be only after the industry and the shippers

being served have the opportunity to become fully experienced

with the many changes taking place that unqualified appraisal

will become possible.

A further objective is to provide for the novice observer of

the household goods transportation industry a brief resume of

what the industry is, what market it serves and how the service

1s provided.

The relationships between household goods carriers,

their agents and owner-operators and the shippers being served

are complex and subject to many variables.

Of necessity the

discussion of the relationships and how the parties interact is

condensed and represents a general overview of the subject and is

not intended to reflect the operations of any one carrier.

PART II

The Interstate Household Goods Transportation

Market

Review of the total operating revenues of the larger

carriers indicates that the 1981 market for the services of the

industry was valued at 2.5 billion dollars. During the year the Industry transported an estimated two million shipments.

Any review of the household goods market requires first an

understanding as to specifically what commodities come within the description of household goods and what services are performed in

the transportation of those commodities.

The term "household

goods" was first formally defined by the Commission in Ex Parte MC-19, Practices of Motor Common Carriers of Household Goods, 17

MCC 467 (1939).

Through the years the original definition has

remained essentially unchanged and, in the writing of the Household Goods Transportation Act, was codified as 49 U.S.C.

10102(10), subparagraphs (A), (B) and (C). The authority defined in the three subparagraphs was initially identified as first,

second or third proviso authority and remains today most

frequently identified in that manner.

As defined by 49 U.S.c. 10102(10), the term "household

goods" means

(A) personal effects and property used or to
be used in a dwelling when a part of the equipment
or supply of such dwelling and such other similar
property as the Commission may provide by
regulation; except that this subparagraph shall
not be construed to include property moving from a
factory or store, except such property as the

householder 'has purchased with intent to use in
his dwelling and which is transported at the
request of, and the transportation charges paid to
the carrier by, the householder,

(B) furniture, fixtures, equipment, and the
property of stores, offices, museums,
institutions, hospitals or other establishments
when a part of the stock, equipment, or supply of
such stores, offices, museums, institutions,
hospitals, or other establishments and such other
similar property as the Commission may provide by
regulation; except that this subparagraph shall
not be construed to include the stock-in-trade of
any establishinent, whether consignor or consignee,
other than used furniture and used fixtures,
except when transported as incidental to moving of
the establishment, or a portion thereof, from one
location to another, and

(C) articles, including objects of art,
displays, and exhibits, which because of their
unusual nature or value require the specialized
handling and equipment usually employed in moving
household goods and such other similar articles as
the Commission may provide by regulation; except
that this subparagraph shall not be construed to
include any article, whether crated or
uncrated, which does not, because of its unusual
nature or value, require the specialized handling
and equipment usually employed in moving household

goods. Commodities transportable under subparagraph (A) are the furnishings of households. All other property of the householder normally used in the maintenance or operation of a household, such as personal automobiles, boats, yard maintenance equipment and the 11ke, are also transportable as household goods when transported as part of the relocation of the furnishings and

contents of a dwelling.

Subparagraph (B) commodities are the furnishings, equipment and Inventories of commercial establishments and offices,

hospitals, museums and all other such establishments. Under the

authority provided by this proviso, a household goods carrier

may, for example, move a department store including all of the

furnishings, equipment and stock on hand.

Subparagraph (c) authority permits household goods carriers

to transport any commodity which because of its unusual value or

nature requires transportation utilizing the specialized

equipment and handling used in the transportation of first and

second proviso household goods. High value computers, trade show

displays and art collections are examples of the types of

property transportable under the third proviso description.

As a general rule, carriers authorized to transport

household goods hold out to transport those commodities under all

three provisos.

However, there are a limited number of carriers

which specialize in the transportation of commodities under only

one or two of the provisos.

Generally, these are among the

smaller carriers and most frequently they concentrate their efforts on the transportation of third proviso traffic, usually computers and similar electronic goods or trade show displays.

Review of the data reported by the ten largest carriers in

their annual reports to the Commission indicates that the market, based on revenue, was in 1981 composed of 80 percent first

proviso traffic, 2 percent second proviso and 18 percent third

prov 180.

In dollar amounts, the division of traffic by proviso

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Shipments transported under the second and third provisos

are, with very limited exceptions, transported on behalf of commercial or governmental shippers. The first proviso traffic

18 divided between individual shippers (householders), commercial

and governmental shippers.

Based on data in the Annual

Performance Reports filed by the carriers, the division of first

proviso traffic by type of shipper appears to be:

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The division of first proviso traffic by type of shipper

varies widely from carrier to carrier.

Many of the smaller

carriers concentrate on the transportation of government and commercial shipments and only 10 or 15 percent of their first proviso traffic 18 represented by shipments tendered by

individual shippers.

The larger carriers concentrate more on

individual and commercial traffic and only 8 or 10 percent of the

shipments they transport are for government shippers.

The first proviso individual shipper market appears to be

valued at about one billion dollars a year at the present time.

As this is the portion of the total market most subject to being

influenced by the use of binding estimates, awareness of the size

and characteristics of the individual shipper market is desirable

in any assessment of the use and impact of binding estimates.

Household goods carriers provide a variety of services other than intercity transportation and receive a significant amount of

revenue from these activities.

with respect to first proviso

traffic, the revenues realized from the performance of these

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