On May 7, 2007, the Surface Transportation Board (STB) issued a decision that will cancel the joint ratemaking agreement of the Household Goods Carrier Bureau (HGCB), and all of the other existing rate bureaus. This change is scheduled to go in effect September 4, 2007.
Atlas Van Lines, Inc. (Atlas) would like to assure our national account customers and agents that for now, it is business as usual — Tariff 400N will continue to be recognized as the current tariff for Atlas and our industry. All current national account contracts remain in full force and effect until the expiration dates of those contracts. Atlas had already announced in April that it intended to develop its own tariff to take a different approach to pricing than others in the industry. The STB's action merely confirms that Atlas' approach — to listen to its customers and the market in developing pricing — is the correct one. Moving forward, Atlas will complete the work of developing our own tariff, meeting any current or revised deadlines imposed by the STB.
Action to seek a stay or deferral of the implementation of this ruling is being considered by the American Moving and Storage Association. Between now and September 4, a comment period is in effect. During this time, questions regarding this decision, submitted to the STB by rate bureaus, will be reviewed and there is the potential for suits to be filed to stay this decision, although it does not appear that the decision can or will be overturned and ultimately, it will go into effect. Please be assured that Atlas will continue to provide you with updates on this matter as they are received.
Background — Joint ratemaking has been in place in the household goods industry for over 70 years and grew out of the extensive regulation of rates in the industry. In 1980, Congress started the move towards deregulating the motor carrier industry by eliminating most entry restrictions and rate regulations, including the extensive regulatory authority of the Interstate Commerce Commission (ICC) over rates. In 1995, this process was furthered with the ICC Termination Act (ICCTA), which eliminated the ICC and established the STB. ICCTA included specific provisions on joint ratemaking agreements, including a requirement that ratemaking agreements be reviewed by the STB every five years to determine whether those agreements were necessary to protect the public interest. It was this periodic review process that led to the STB's latest decision. Essentially, the STB found that rate bureaus are not needed in nor are they consistent with the deregulated environment that exists for motor carriers, are anti-competitive and no longer have any public interest benefit. With specific reference to household goods, the STB held that customers will best be served by letting the market set the rates in what is already a competitive segment of the motor carrier industry.
What does this mean for the household goods transportation industry?
The STB's decision will have a definite impact on the household goods industry. This decision will, in effect, eliminate the ability to reference a single industry "price list" to determine the charges for shipments. Each carrier will need to develop its own price list for the services it provides. Until now, the motor carrier industry has been one of only a few industries operating with an exemption from the antitrust laws that allowed for a jointly made price list.
What does this mean for Atlas, its agents and customers?
This change presents a challenge and an opportunity for Atlas — to have a competitive pricing structure that meets customer, agent and Atlas needs. In regard to the development of the Atlas tariff, since the elements that go into a household goods move (weight, miles, origin, destination and accessorial services) are not changing, this tariff may be some version of 400N or may take a different approach to pricing. Longer term, Atlas will continue to look for solutions that work for our customers, our agents, and our company. Our top priority at Atlas is our ability to continue to provide the level of quality service and fair pricing that has become a staple in our relationships with our valued customers.