Tariffs

In the shipping industry people throw around the word "tariff" quite a lot, but what really is a common carrier tariff (tariff)? According to the Federal Maritime Commission's website, a tariff is a publication containing the actual rates, charges, classifications, rules, regulations and practices of a common carrier or a conference of common carriers. What does this really mean? It means that carriers need to publish and classify their rates in a tariff so it is public knowledge to ensure fair practices for everyone in the industry. This does not mean that there are no service contracts for larger accounts or other agreements behind closed doors, but it does keep the carriers in check. The Federal Maritime Commission (FMC) prides itself on having been able to establish anti-trust laws which have become particularly more important as ship sizes begin to grow and carriers can handle more cargo than ever before. With the requirement of tariffs, carriers were no longer able to keep lower freight shipping rates in secret, but there was also less regulation in general. Now with having published rates, customers can be sure that carriers are not taking advantage of them. Even with regulation like tariffs though, it is still important for shippers to do their own due diligence to ensure the best possible shipping rates. Even though the rates are published, carriers are still able to charge whatever rate they feel is necessary for a particular commodity. This is why the new onset of so many online rate quoters are becoming more important. It is easier for companies to be sure they are getting the best possible freight rates with the shipping lines they are using. We can thank tariffs for that.