Daycos News

Late last month, SDDC posted an Excel spreadsheet containing the 2010 400NG baseline rates to their website. It was the first time the rates were posted by SDDC, instead of provided by AMSA, but the real difference was not who supplied the rates, but how they were supplied.

SDDC posted the rates on their website, in a publicly accessible document formatted in Excel. It is likely this method and format was chosen to make it easier to be viewed by the human eye. Previously, the 400NG had always been considered an “electronic tariff”, meaning that the baseline rates were only accessible via computer software. If you wanted to calculate a rate, you fed the shipment parameters into a computer rating engine, and the computer did the calculations. The baseline rates were there, but they were hidden from human eyes, intended to be read only for computer systems. To manually calculate the rate for any line item was virtually impossible.

Now, the baseline rates are available to everyone with an internet connection and Excel. However, this does not mean that now it will be easy to manually figure every line item on every 400NG invoice. It is important to remember that the 400NG was designed to be an electronic tariff, and it was always assumed that a computer would be making the calculations, not a human using pen and paper. Ease of calculation and clarity were not primary goals in the design of the tariff. This is apparent if you try to do the manual calculation of a 400NG invoice. While this publication of baseline rates makes it possible to manually calculate rates, it does not make it practical.

The risk that TSPs face with the publication of these rates is that PPSOs may attempt to verify line item amounts using this spreadsheet. While SDDC has long held the position that the only responsibility of PPSOs is to verify that services were performed in the quantities billed, many of the PPSOs feel that their fiduciary responsibility compels them to verify that the amount billed is correct. Since the 400NG has been an electronic tariff, it has been impossible to do this, which has led to frustration by some PPSOs.

The posting of this spreadsheet now gives the PPSO the opportunity to verify rates. However, given the complexity and design of the 400NG, it will be challenging for them to do this. Manually calculating these rates could lead to incorrect calculations, which could cause accurate invoices to be incorrectly denied. Even if a PPSO disputed a charge and asked for explanation of a discrpency, the process of walking someone through a 400NG rating calculation is difficult, cumbersome and time consuming for both parties.

In general, Daycos is supportive of the move by SDDC to make the 400NG more accessible. However, merely posting the baseline rates can only be a first step. Either clear guidance needs to be give to PPSOs about how to utilize the rates (or guidance to not utilize them), or SDDC needs to take steps to simplify the tariff, which could be a daunting task.