Tariffs, Transportation

a system of prices, or rates, according to which payment is collected for transportation. Transportation tariffs are divided into freight and passenger categories.

In the USSR, freight tariffs are a part of the general system of planned wholesale prices, which govern rates charged between state enterprises; the proportion of personal freight is small. The establishment of transportation tariffs is based on the prime cost of shipments (seeTRANSPORTATION COSTS). Tariffs also include a specific profit, the size of which depends on the state’s pricing policy. Other factors are also taken into account in establishing tariffs, including the purpose of the products being shipped and the capital intensiveness and labor intensiveness of a given shipment. Freight tariffs as a whole ensure the profitability of operation of transportation enterprises, but the level of profitability is not always the same. For example, tariffs for the transportation of highly valuable products provide significantly higher profitability than tariffs for the large-scale shipment of common goods for production purposes.

Freight tariffs are distinguished according to the type of common-carrier transportation. For railroads, standard freight tariffs are established for the entire rail network on the basis of the network’s average prime cost of shipments. According to the general tariffs, payment is usually made for the shortest distance between the origin and destination points of the freight. Tariff rates are differentiated according to the type of freight, the distance, the speed of shipment, the size of the shipments (freight-car, container, or small shipments), and other factors. Local tariffs are also used for railroad branch lines that are not part of the overall railroad network.

On July 1, 1967, two-rate tariffs were introduced for approximately half of the USSR’s railroad freight turnover; on Jan. 1, 1974, they were extended to all railroad freight transportation. Under the current system, tariffs are established in kopecks per 10 tons for loading-unloading operations and in kopecks per 10 ton-kilometers for shipments. Payment for large-scale shipments is made according to the freight-car tariff, calculated on the basis of normal use of the capacity of a freight car, independent of the actual use by the shipper. The minimum distance for which payment is collected for freight transportation by rail is 50 km, except for sugar beets and peat, for which the minimum distance is 25 km. This helps relieve the railroads of inefficient short hauls. The charges are increased by 100 percent for express service. There are also reduced tariffs, particularly those that stimulate the development of integrated transportation services and that put empty hauls to use (seeRATIONALIZATION OF CARGO TRANSPORT IN THE USSR).

In water transport, tariffs are differentiated according to the river and sea basins because of the great differences in the prime cost of shipments. In river transport, tariffs are differentiated not only according to the type of freight, but also according to the type of shipment; for example, the tariffs for the transportation of round timber by raft and by ship are different. In marine transport, a distinction is made between freight charges (frakhty) and tariffs. Tariffs are planned and announced in advance, remain in effect for a long period of time, and are used mainly for shipments between ports in the USSR. A freight charge, on the other hand, is a one-time price for international transportation, the amount of which is established by agreement between the shipowners and the party hiring the ship.

In motor vehicle transport, tariffs are differentiated by Union republic, and they include extra charges for road construction. During periods in which roads are impassable, tariffs may be increased by as much as 20 percent. Zone factors, by which the basic tariffs are multiplied, have been established for some oblasts and regions. They reflect the differences among regions in the prime cost of shipment; for example, the coefficient for the Polar Region is 3, and that for the North is 2. Payment is collected for the volume of shipment made, which is measured in ton-kilometers. Four classes of freight are distinguished, based on the degree to which the vehicle’s cargo capacity is used. Tariffs for class 4 are twice as high as those for class 1. Time-based tariffs are also used, according to which payment is made by vehicle-hour and the amount is determined by the type and capacity of the vehicle.

Tariffs for air transport correspond to two main zones. The first covers areas where rail transportation is available, and the second covers remote areas, where the prime cost of shipment is higher for a variety of reasons. On the average, tariffs in the second zone are 70 percent higher than those in the first zone.

Passenger transportation tariffs are part of the overall system of retail prices for consumer products and services. For rail transport, they are differentiated according to the type of trip (longdistance or intracity), the type of train service (express or local), and the type of car (whether with padded or hard seating and whether a compartment or coach car). The lowest tariffs are for intracity commutation, covering only 20–30 percent of the cost of transportation. Reduced tariffs save the working people of the USSR more than 200 million rubles annually. Long-distance tariffs and full-fare tickets for intracity transportation ensure the required profitability of passenger travel.

In marine passenger transportation, tariffs are differentiated according to the type of ship and the class and location of the cabin. Special tariffs for tourists are widely used. Passenger tariffs for river transport are established according to approximately the same principles.

For air transport, passenger tariffs, like freight tariffs, are differentiated according to two zones. Tariffs for urban transit (subways, trolleybuses, buses, and trolley cars) are divided into uniform (single-rate) fares—3, 4, or 5 kopecks per trip regardless of distance—and zoned fares. Throughout the USSR, except for certain remote regions, a uniform taxi fare structure is in effect.

In other socialist countries, transportation tariff structures are similar to those in the USSR. In capitalist countries, various systems of transportation tariffs are used; they are based on capitalist costs of transportation and the cost of production, including profit. The weakening of the monopoly of the railroads and the strengthening of competition from motor vehicle and air transport are currently affecting the level of transportation tariffs. This is particularly true of private transportation enterprises. In several countries, such as France, the Federal Republic of Germany, and Great Britain, where transportation is a state enterprise, tariffs for large-scale transportation of many goods are set at unprofitable levels. The railroad deficit is covered by the state budget, that is, in reality, by the tax-paying workers.