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Table A
1981 Revenues and Market Share, Ten Largest Carriers

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As indicated by this data, the industry is one which is

dominated by a small fraction of the total participants.

The

vast bulk of the carriers in the industry contribute less than

one percent of the aggregate revenues.

All major household goods carriers employ agents to sell

their services and to provide most of the services associated

with the transportation of household goods. There are approximately 8,000 agents engaged in Interstate operations.

As

of January 1, 1982, the five largest carriers employed

collectively 3,254 agents. The average operating revenue for these 3,254 agents was, in 1981, $384,000. Industry wide the

average revenue per agent is believed to have been 300 to 325

thousand dollars in the same year.

Appendix A contains the findings of a study made in

November, 1975 of the distribution of agents by State in relation

to the population of each State.

The data used were the notices

of Agency Relationships which the carriers were required at that

time to file with the Commission.

As indicated by the study

findings, there was at that time one agent for every 26,904

persons in the total population.

It is believed that

substantially the same number of agents represent the industry at

this time.

The household goods industry relles heavily on purchased

transportation to accomplish the intercity movement of traffic.

Although some of the smaller carriers utilize carrier owned

vehicles and salaried drivers, the vast bulk of all intercity

household goods transportation is accomplished using trucks and drivers acquired under lease arrangements, either with agents or

with independent owner-operators.

During 1981 the ten largest carriers reported that they

collectively operated 648,581,447 miles in the performance of

their operations.

Only two of the ten, Atlas Van Lines and

Burnham Van Service, reported any mileage attributable to carrier

owned equipment and overall 98.84 percent of the total mileage

was operated by leased equipment.

One view of the household goods transportation industry is

that the larger carriers in the industry are essentially

retailers of a transportation service which they purchase from

the estimated 8,000 agents and 12 to 15 thousand owner-operators

and which they sell to the general public. This situation materially impacts on how the industry functions and, influences

how the carriers respond to fluctuations in the market and

opportunities to amend their traditional industry practices by

the adoption of innovative price and service options.

The intercity revenue realized from the transportation of

first proviso traffic 18 divided between the carrier, the agent

and the owner-operator in substantially the following manner.

Agent

The agent usually receives around 20 percent of

the intercity revenue as a commission for selling the

carrier's services and for registering (booking) the shipment with the carrier, preparing the initial paperwork (the estimate, Order for Service and bill of

lading) and for over-seeing the conduct of the

transaction up to the time that the shipment 18 turned

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addition to providing the vehicle and all equipment
required (pads, dollys, ramps, etc.), the
owner-operator also provides, within certain limits,

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the labor required to load and unload the shipment and

operate the vehicle over the highway.

Carrier

The balance of the intercity revenue, from 15

to 20 percent, is received by the carrier and

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national advertising.
In addition to the intercity revenues the carriers also

realize substantial revenues from the performance of

non-transportation accessorial services.

These revenues normally

go to the agent or owner-operator as compensation for providing

shipping cartons and crating, for packing and unpacking, for

providing extra labor, extra distance, stair and elevator carries

and for handling pianos or bulky items.

Also the agent derives

revenue from the performance of local transportation and for

providing storage in transit services in relation to the handling

of intercity shipments.

The foregoing descriptions of how the household goods

industry divides revenues between the carriers, agents and owner-operators is, of necessity, very general. Actually, no two carriers operate in exactly the same manner and the divisions of

revenue between the three parties varies from carrier to

carrier.

The purpose at this time is to provide a general

understanding of how the industry functions to assist in an evaluation of how and why the industry is responding to the changing regulatory environment and the changing demands of the

market place.

PART IV

Impact of Legislation and Regulatory Changes on the Household

Goods Transportation Industry and Market

"During the years between 1936 and 1980, the household goods

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Goods Transportation Act of 1980 with a threefold policy in

mind--the reduction of unnecessary regulation, the strengthening of consumer remedies and protections, and the establishment of maximum carrier flexibility in pricing their services and meeting the needs of their shippers./ Like the Motor Carrier Act, the bill stressed competition and reduced regulation as means of

achieving a better and more effective motor carrier system".

As result of enactment of the Household Goods Transportation

and Motor Carrier Acts of 1980 and an amended regulatory

philosophy, the industry is now operating in a new and different environment which is bringing changes to the way it functions and which promises even greater change in the future.

Up to this time the relaxation of restraints against entry

has produced no major reshaping of the industry.

The

transportation of household goods is a highly specialized

undertaking requiring a considerable investment of money, effort

1/ H. Rep. 96-1372, 96th Cong. 2d. Sess. 5 (1980).

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