FTC Staff Comment Before the New Jersey Division of Consumer Affairs Concerning Proposed Rules Implementing the Public Movers and Warehousemen Licensing Act

Fedenl! Trade Commission
-----_..------
· " .....- -.	", I ~ .•_:
"~" -
----_._--.... -_._---- 	--_. -,-_.--
o {fi Cl' of the Regional Director
2G Fedenll Pla7.a, -22nd Fl.
New York, New York J027R
(212) 264-120{)
TESTIMONY 	OF
MICHAEL JOEL BLOOM
REGIONAL DIRECTOR
COMMiSSiON 	AUTHoRiZED
V890004
NEW YORK REGIONAL-OFFICE 	OF
THE 	FEDERAL TRAOE-- COMMISSION
BEFORE TIm
~~ JERSEY 	DIVISION OF CONSUMER AFPAIRS
NOVEMBER 	22, 	1988
This 	testimony 	presents 	the 	views 	of 	the 	New 	York 	Regional
Office 	and 	the 	Bureau 	of 	Competition 	of 	the 	Federal 	Trade
Commission. 	The 	views 	expressed 	are 	not 	necessarily 	those 	of
the 	Commission 	or 	of 	any 	individual 	Commissioner.

- My 	name 	io 	11icha~1 Joel 	Bloom. 	I 	am 	the 	Regional 	Director
of 	the 	New 	York 	Regional 	Office 	of 	the 	Federal 	Trade 	Commission.
I 	appreciate 	the 	opportunity 	to 	testify 	today 	on 	the 	proposed
rules 	implementing 	the 	Public 	Movers 	and 	WarehouBemen 	Licensing
Act.
The 	testimony 	I 	will 	present 	is 	that 	of 	the 	staff 	of 	the 	New
York 	Regional 	Office 	and 	the-Bureau 	of 	Competition of 	the 	Federal
Trado 	Commission. 	The 	views 	I 	express 	are 	not 	necessarily 	those
of 	the 	Commission 	or 	of 	any 	individual 	Commissioner.
Our 	comments 	pertain 	primarily 	to 	provisions 	of 	the 	rules
calling 	for 	the 	semiannual 	filing 	of 	tariffs 	containing 	the
rates 	that 	public 	movers 	will 	charge 	for 	their 	services. 	we
applaud 	the 	stated 	objective 	of 	the 	rules 	to 	"assure 	the
informed 	and 	competitive 	delivery 	of 	moving 	and 	warehousing
services."l 	However, 	we 	believe 	that 	the 	rules, 	if 	revised 	in
certain 	respects, 	might 	better 	accomplish 	this 	laudable 	gaLl.
Accordingly t 	we 	wish 	to 	point 	out. 	certain 	administrative·
reforms 	that, 	if 	adopted, 	would 	allow 	consumers 	to 	receive 	the
benefits 	of 	additional 	price 	and 	service 	competition 	among
movers. 	For 	example, 	we 	believe 	that 	consumers 	would 	benefit 	if
movers 	were 	p~rmitted 	to 	change 	their 	tariff 	rates 	more
1 	See 	the 	"Social 	Impact" 	statement 	set 	forth 	in 	the
preamble 	to 	the 	proposed 	rules.
3/tkccmt •rrcg 	112188 	12:01

frequently 	than 	twice 	per year. 	Con6umers 	would 	also 	benefit 	if
movers 	were 	allowed 	to 	offer 	promotional 	pricing, 	including
binding 	estimatee 	and 	demand-sensitive 	discounts.
I. 	Introducfjon
Before.· addressing 	these 	issues 	specifically, 	I 	would 	like
to 	make 	50me 	introductory 	remarks.
The 	Federal 	Trade 	Commission 	is 	charged 	by 	Congress 	with
preventing 	unfair 	methods 	of 	competition 	and 	unfair 	or 	deceptive
acts 	or 	practices 	in 	or 	affecting 	interstate 	cownerce. 2 	Pursuant
to 	this 	mandate, 	the 	Commission 	seeks 	to 	serve 	the 	public
interest 	by; 	among 	other 	things, 	protecting 	the 	marketplace 	from
unreasonable 	restraints 	of 	trade. 	Consistent 	with 	these
purposes, 	the 	staff 	of 	the 	Commission 	have 	provided 	comments 	to
federal, 	state, 	and 	local 	legislative 	and 	administrative 	bodies
to 	advocate 	competition-based 	approaches 	to 	various 	policy
issues. 	The 	Commission 	has 	had 	considerable 	experience 	in
evaluating 	competitiv~ 	problems 	and 	issues 	in 	the 	moving
industry, 	including 	issues 	relating 	to 	the 	formulation 	of
tariffs 	and 	Btate 	regulation. 	This 	experience 	is 	derived 	both
from 	FTC 	enforcement 	initiatives 3 	and 	from 	industry 	studies 	and
2 	15 	U.S.C. 	§ 	45 	et 	seq.
3 	In 	Mas~~cbueetts 	Furniture 	& 	Piano 	Moyerp 	ASS/Dr 	the
Commission 	found 	that 	the 	ratemaking 	activities 	of 	a 	movers r
trade 	association 	reflected 	an 	agreement 	among 	competitors 	to 	set
3 jtkcant. neg 	2 	112188 	12tOl

analyses 	by 	FTC 	staff. 4 	Accordingly, 	in 	response 	to 	your 	public
notice 	inviting 	comment, 	the 	9 tat f 	of 	the 	NeVT 	York 	Regional
Office 	and 	the 	Bureau 	of 	Competition 	offers 	those 	remarks 	on 	the
proposed 	rules 	governing 	the 	public 	moving 	industry 	in 	New
Jersey.
II. 	a~ck~round
By 	way 	of 	background{ 	I 	wish 	to 	note 	Borne 	of 	the 	regulatory
history 	of 	the 	moving 	industry 	in 	New 	Jersey. 	As 	you 	know r 	Nev.'
Jersey 	has 	generally 	permitted 	competition 	in 	intr~8tate trucking
without 	price 	regulation 	or 	restriction 	on 	entry. 	However ( 	New
Jersey 	has 	regulated 	one 	category 	of 	trucking 	- 	the 	public 	moving
of 	household 	goods( 	office 	goods, 	and 	special 	commodities. 	Prior
to 	1981, 	the 	Public 	Utilities 	Act 	empowered 	the 	Board 	of 	Public
Utilities 	to 	U[f)ix 	just 	and 	reasonable.
movers. S
. 	rates ff 	for 	public
prices 	or 	price 	ranges 	and 	constituted 	a 	~ 	Qe 	violation 	of 	the
antitrust 	laws. 	102 	F.T.C. 	1176 	(1983L 	rey'd 	on 	oth~r 	grounds {
773 	F. 	2d 	391 	(1st 	Cir," 	1985).
4~, 	~( 	Diane 	S. 	Owen, 	"Deregulation 	in 	the 	Trucking
Industry," 	Bureau 	of 	Economics, 	Federal 	Trade 	Commission, 	May
1988. 	This 	FTC 	Staff 	Report 	found 	that 	federal 	deregulation 	of
contract 	trucking 	of 	general 	freight 	has 	led 	to 	substantially
lower 	costs 	and 	more 	efficient, 	reliable, 	and 	innovative 	service.
The 	Report 	states 	that 	"[ 0 ]verall 	shippers 	and 	carriers
have 	coped 	well 	and 	shown 	innovative 	skill 	in 	dealing 	with 	the
increased 	complexity 	of 	the 	trucd.ng 	market 	after 	deregulation,
bringing 	into 	question 	the 	need 	for 	r~te bureaus 	to 	simplify 	and
stabilize 	rates."
5 	N.J.Stat.Ann. 	§ 	48:2-21(b).
3/t.kr::cmt.rrcg 	3 	112188 	12 ;01

j--'.Ut:·
In 	1981{ 	this 	public 	utility 	form 	of 	regulation 	was
supplanted 	by 	the 	New 	Jersey 	Public 	Movers 	and 	Warehousemen
Licensing 	Act:.. 6 	The 	Act 	allows 	relatively 	eal3Y entry 	and 	enC:tbleD
movers 	to 	determine 	their 	own 	rates 	and 	to 	change 	them 	by 	filing
new 	tariffs. 	This 	considerable 	relaxation 	of 	regulatory
constraints 	represents 	substantial 	progress 	toward 	providing
consumers 	with 	the 	benefits 	of 	a 	marketplace 	unencumbered 	by
impediments 	to 	price 	and 	service 	competition. 	However, 	the 	Act
has, 	in 	certain 	respects{ 	been 	interpreted 	in 	a 	manner 	that 	may
prevent 	consumers 	from 	enjoying 	the 	benefits 	of 	6ompetition.
These 	interpretations, 	which 	I 	will 	discuss 	specifically { 	are
reflected 	in 	the 	rules 	now 	proposed 	to 	implement 	the 	Act.
III. 	EequlatiQos 	BestraininQ 	Moye~s' 	PricinQ 	Flexibilit~
A. 	The 	Prohibition 	of 	Demand-Sensitive 	Rates 	and 	Binding
Estimates 	Is 	Contrary 	to 	the 	In~erest6 of 	Consumers
The 	Act 	provides 	that 	public 	movers 	must 	file 	tariffs 	with
the 	sta~ 	and 	may 	charge 	only 	the 	"compensation" 	specified 	in
them, 	except 	tha.t 	discounts 	and 	rebates 	to 	persons 	62 	years 	or
older 	are 	expressly 	permitted.? 	This 	provision, 	which 	requires
6 	N.J.Stat.Ann. 	§ 	45:1~D-l 	et 	.5e~ 	(hereafter 	"the 	Act").
7 	N.J.Stat.Ann. 	§ 	45:14D-14(b). 	In 	addition 	to 	appart':ntly
sanctioning 	the 	provision 	of 	off-tariff 	discounts 	to 	persons 	6~
o~ 	older, 	th~ 	statute 	seems 	implicitly 	to 	authorize 	the 	granting
of 	selective 	price 	reductions 	provided 	that 	they 	are 	not 	"undue
or 	unreasonable." 	("It 	shall 	be 	unlawful 	fOr 	any 	mover 	or
3/tkcant.rrcg 	4 	112188 	12: 01

=..-.-.	. '-':"
essentially 	that 	filed 	tariffs 	notify 	the 	public 	of 	the
compehsation 	to 	be 	charged, 	has 	been 	intarpretHd 	by 	the 	Ne\-r
Jergey 	Advisory 	Board 	of 	Public 	Mpvers 	and 	Warehouaemen 	to
preclude 	various 	forms 	of 	promot.ional 	'Llhis
interpretation 	seems 	t.o 	be 	based 	on 	the 	beli~f 	that 	p8rmitting
such 	promotional 	pricing 	would 	render 	the 	tariffD 	too 	imprecise
to 	satisfy 	the 	statutory 	requirement 	that 	the 	compensation 	to 	be
charged 	be 	specified. 	Further, 	New 	Jersey's 	regulatory
authorities 	have 	not 	permitted movers 	to 	specify 	in 	their 	tariffs
rates 	that 	vary 	depending 	upon 	Borne 	predictable 	factor, 	5uch 	8S
anticipated 	demand. 	Thus, 	for 	example, 	a 	mover 	could 	not 	offer
lower 	rates 	during 	a 	month 	of 	low 	demand, 	such 	as 	February, 	even
if 	the 	mover 	were 	expressly 	to 	set 	forth 	the 	lower 	rate 	in 	its
filed 	tariff. 8
The 	AdviBOry 	Board 	also 	has 	banned 	the 	use 	of 	binding
estimates. 	This 	prohibition 	applies 	even 	if 	the 	tariff 	were 	to
provide 	that 	the 	binding 	estimate 	cannot 	be 	higher 	thon 	the
warehouseman 	to 	make, 	give, 	or 	CaUBE: 	Ilny 	undue 	or 	unreasonable
preference 	or 	advantage 	to 	any 	p~rticular person ... or 	to 	sGbject
any 	particular 	person ... to 	any 	undue 	or 	unreasonable 	prejudice 	or
disadvantage.") 	N.J.Stat.Ann. 	§ 	45:14D-13.
8 	Discounts 	corresponding 	to 	seasonal 	ch~ngeB 	in 	demand 	are
referred 	to 	in 	the 	moving 	industry 	a8 	useasonal 	discounts." 	The
current 	system, 	which 	allows 	new 	rates 	to 	become 	effective 	on 	May
1 	and 	November 	1, 	permits 	some 	rate 	flexibility 	that 	rn&y
correspond 	to 	limited 	88:30nal 	change-:'- 	Ln 	demand. 	S,:;miannual
rate 	changes, 	hcwever f 	cannot 	reflect 	seasonal 	demand 	changes
that 	occur 	more 	frequently 	than 	twice 	~ year.
3!tkcant .neg 	5 	112188 	12 t 01

ch8rg~ 	to 	the 	customer 	that 	otherwise 	would 	result
application 	of 	the 	filed 	rates.
from
As 	I 	mentioned 	C:1 	moment 	ago, 	the 	propozcd 	rules 	Cl.ppear 	-to
codify _these 	interpretations i 9· 	they 	do 	not 	adopt 	the 	kind 	of
flexible 	regulatory 	regime 	that 	we 	believe 	would 	be 	more 	attunect
to 	the 	overall 	purpose 	of 	the 	Act 	- 	to 	foster 	price 	and 	service
competition.
The 	proposed 	rules 	require 	that 	movere 	provide 	consumers
with 	estimates 	through 	completion 	of 	an 	"estimated 	cost 	of
services/l 	form, 	a 	sample 	copy 	of 	which 	accompanies 	the 	rules. 	As
the 	rules 	state, 	the 	estimate 	is 	to 	be 	given 	/las 	an 	educated
predictor 	of 	the 	cost 	for 	the 	services 	to 	be 	rendered. /l fO 	The
availability 	of 	such 	an 	/leducated 	predictor" 	is 	importent 	insofar
as 	it 	enables 	consumers 	to 	avoid 	a 	difficult 	and 	sometimes
fruitless 	effort 	to 	compare 	the 	total 	cost 	of 	moving 	services
offered 	by 	two 	or 	more 	movers 	who 	may 	U6e 	different 	and 	not
directly 	comparable 	-- 	c06ting 	methods. 11 	Therefore, 	we 	support
9 	N.J.Admin.Code 	13:44D-3.1(e), 	printed 	in 	20 	N.J. 	Reg. 	2364
( Sent. 	19 / 	1988).
10 	N.J.Admin.Cod3 	13144D-4.1(a)(2).
11 	For 	example ( 	a 	review 	of 	filed 	t.ariffs 	indicates 	that
movers 	may 	assess 	differing 	charges 	for 	scores 	of 	it.ema 	ranging
from 	packing 	materials 	of 	ve:c':-:::ms 	shapes 	and 	sizes, 	to 	packing
services / 	to 	special 	carryi;lg 	charges 	for 	unusually 	heavy 	or
cumbersome 	items, 	to 	appliance 	d i.sconnection 	and 	re-connection,
to 	the 	van, 	driver, 	and 	helper6. 	One 	mover 	may 	seek 	higher
cha~ges 	than 	another 	for 	some 	items 	and 	lower 	chargeo 	chan 	that
same 	other 	~8ver 	for 	other 	items, 	making 	comparison 	by 	the
3/tkccmt •w;;g 	6 	112188 	12:01

1C;::?:
the 	notion 	that 	estimates 	should 	be 	clearly 	presented 	to
consumers 	to 	enable 	them 	to 	anticipate 	their 	costs. 	Indeed, 	we
believe 	that, 	to 	the 	p.xtent 	permitted 	by 	statute, 	the 	rulee
should 	go 	further 	to 	allow 	movers 	to 	provide 	corU'iUmer8 	with
binding estimates.
The 	availability 	of 	binding 	estimates 	l1nd 	demand-sensitive
discounts, 	such 	as 	seasonal 	discounts, 	could 	stimulate
competition 	among 	movers 	and 	provide 	substantial 	benefits 	to
consumers. 	Prohibiting 	these 	options 	may 	deprive 	60rne 	consumers
of 	a 	price 	advantage 	for 	purchasing 	services 	during 	periodB 	of
the 	year 	when 	the 	cost 	of 	providing 	thoBe 	services 	is 	lowi 	deny
consumers 	the 	valuable 	up-front 	price 	information 	and 	bargaining
power 	that 	comes 	with 	binding 	estimates; 	and 	increase 	the 	riBka
consumers 	must 	bear 	with 	respect 	to 	movers' 	under-estimation 	of
poundage 	or 	cubic 	feet 	of 	goods 	to 	be 	moved. 12
consumer 	of 	likely 	total 	costs 	cumbersome 	and 	uncertain.
Furt'ler, 	the 	essential 	method 	of 	calculating 	significant 	costs
may 	vary 	from 	mover-to 	mover. 	Some 	movers 	may 	charge 	for
transportation 	on 	an 	hourly 	basis 	whereas 	others 	may 	use 	a 	weight
and 	mileage 	basis. 	The 	use 	of 	different 	costing 	methods 	may
greatly 	increase 	the 	difficulty 	and 	reduce 	the 	reliability 	of
consumer 	projection 	and 	comparison 	of 	movers' 	total 	charges.
12 	The 	cost 	of 	a 	typical 	move 	will 	depend 	upon 	events 	that
cannot 	be 	predicted 	with 	certainty. 	For 	instance, 	the 	weight 	of
a 	particular 	load 	can 	only 	be 	es timated 	until 	it 	is 	placed 	on 	a
scale. 	The 	prohibition 	of 	binding 	es~imateB forces 	the 	cug~orner
to 	bear 	the 	ri~k 	associated 	with 	unpredictable 	contingencies
even 	when 	the 	mover 	might 	better 	be 	ab.~.e 	to 	assume 	the 	rie}~,
either 	because 	it 	is 	les8 	riSK 	averse 	than 	the 	customer 	or
because 	it 	can 	do 	so 	more 	efficiently 	(for 	example, 	by 	spreading
its 	risks 	among 	its 	customers).
7 	1~ 	188 	12 t 01

11 ," :;;.: 1.... -1 Sc:E;
It 	is 	also 	important 	to 	note 	that 	the 	prohibition 	of 	binding
estimates 	may, 	ironically, 	create 	a 	COfiBumer 	protection 	problem
by 	e ncourag inc; 	some 	movere 	to 	offer 	decept lve 	"lo",~ball"
estimates 	knowing 	that 	they 	will 	not 	be 	bound. 	'rhis 	io
particularly 	paradoxical 	in 	view 	of 	the 	pro-consumer 	objectives
of 	both 	the 	Act 	and 	the 	rules.
The 	statutory 	requirement 	that "movers 	adhere 	to 	published
tariffs 	- 	a 	requirement 	that 	may 	have 	been 	del3igned 	to 	provide
consumers 	of 	moving 	services 	with 	notice 	of 	the 	prices 	they 	will
pay 	may 	not 	require 	the 	regulatory 	prohibition 	of 	demand-
sensitive 	discounts, 	or 	even 	of 	binding 	estimates. 	A 	mover
could 	specify 	rates 	in 	its 	filed 	tariffs 	that 	vary 	depending 	upon
anticipated 	changes 	in 	demand. 	Similarly, 	the 	fact 	that 	a 	mOver
has 	chosen 	to 	use 	binding 	estimates 	could 	be 	clearly 	communicated
in 	its 	filed 	te.riff. 	permitting 	these 	practices 	might 	well
satisfy 	the 	requirements 	of 	the 	statute.
'1'0 	the 	extent 	that 	the 	Division 	of 	Consumer 	Affairs 	believes
that 	the 	restrictions 	on 	these 	fO~8 of 	pricing 	are 	not 	compelled
by 	the 	Act, 	we 	recommend 	that 	it 	consider 	modifying 	its 	rules 	to
allow 	this 	pricing 	flexibility. 	If, 	however I 	the 	Division 	of
Consumer 	Affairs 	believes 	~hat 	these 	or 	any 	of 	the 	o~her
rest~'ictions 	discussed 	in" these 	comments 	are 	compelled 	by 	the
Act, 	we 	respectfully 	suggeBt 	that 	the 	Division 	may 	wish 	to 	call
the 	noted 	anticompetiti.ve 	effects 	to 	t.he 	attention 	of 	the 	New
3/tkcant. rrcg 	8 	112188 	12101

JBrsey 	legislature 	for 	itD 	consideration 	of 	appropriate
amendments.
B. 	Requirements
Competition
for 	Semiannual 	Tariff 	Filing 	Restrain
The 	Act 	contains 	another 	provision 	that 	has 	been 	inter-
preted 	by 	regulatory 	officials 	in 	a 	manner 	that 	inhibits
competition.
tariffs
The 	.Act 	provides 	that 	movers 	'/shall 	file 	their
• 	semiannually. ,,13 	The 	ru.le6 	require 	every 	mover 	to
file 	"a 	tariff 	or 	tariffs" 	no 	later 	than 	April 	1 	and 	no 	later
than 	October 	1 	of 	each 	year;14 	these 	tariffs 	become 	effective 	on
I
l1ay 	1 	and 	November 	1 r 	re6pecti vely. 15 	Hence r 	a 	mover 	cannot
deviate 	from 	the 	rates 	contained 	in 	its 	t~riff 	for 	six 	months
after 	the 	rates 	become 	effective I 	even 	if 	the 	mover 	i8 	losing
customers 	to 	other 	movers 	who 	filed 	lower 	rates. 	?urther I 	a
mover 	cannot 	institute. a 	price 	change 	more 	quickly 	than 	thirty
days 	after 	providing 	notice 	of 	the 	change. 16
13
14
15
N.J.Stat.Ann. 	§ 	45:14D-14(a).
N.J.Admin.Code 	13:44D-3.1(a).
N.J.Admin.Code 	13:44D-3.1(b).
16 	Because 	a 	mover 	must 	file 	a 	tariff 	at 	leae;t 	one 	month
before 	it 	becomes 	effective 	and 	tariffs 	remain 	in 	effect 	for 	six
months r 	a 	mover 	must 	commit 	itself 	to 	rates 	for 	at 	least 	seven
months.
3/tkccmt .neg 	9 	112188 	12: 01

-,,- .'	.....-)~
These 	constraints 	on 	the 	frequency 	of 	tariff 	revieions
prevent 	moverB 	from 	adjusting 	price8 	rapidly 	in 	response 	to
changes 	in 	demand 	and 	encourage 	movers 	to 	use 	i'l 	r 1sk-averse
pricing 	strategy. 	For 	example, 	a 	mover 	probably 	would 	be
disinclined 	to 	file 	low 	prices 	that 	would 	be 	effective 	for 	six
months 	for 	fear 	of 	under-estimating 	what 	its 	coste 	will 	be
several 	months 	later, 	especially 	when 	it 	cannot 	precisely
anticipate 	its 	future 	costs. 	In 	addition, 	if 	tariff 	requirements
increase 	the 	risks 	of 	doing 	business, 	some 	firms 	maybe 	deterred
from 	entering 	the 	moving 	industry. 	These 	constraints 	also
deprive 	movers 	of 	the 	constant 	stream 	of 	competitive 	pricing
information 	that 	operates 	in 	unregulated 	markets 	to 	inform
sellers 	of 	changes 	in 	supply 	and 	demand 	conditions. 	As 	a 	result,
consumers 	are 	denied 	the 	benefit 	of 	a 	market 	in 	which 	pricee>
closely 	track 	costs 	and 	in 	which 	the 	supply 	of 	moving 	services 	is
produced 	efficiently 	to 	satisfy 	demand.
In 	addition, 	the 	requirement 	is 	likely 	to 	induce 	movers 	to
file 	their 	tariffs 	essentially 	simultaneously, 	on 	or 	about 	April
1 	and 	October 	1 	of 	each 	year, 	and 	could 	thereby 	facilitate
anticompetitive 	rate 	agreements 	among 	movers. 	Requiring
suppliers 	to 	adhere 	to 	filed 	price 	schedules 	can 	encourage
collusive 	behavior 	by 	enabling 	a 	cartel 	to 	police 	a 	price-fixing
agreement 	more 	easily. 	To 	the 	extent 	that 	some 	fi::-m/3 	may 	be
tempted 	to 	engage 	in 	cJllusive 	pricing, 	a 	~egulatory 	requirement
3/t.kcant .rrcg 	10 	112188 	12: 01

.-, .-,'	
..- . ~- ,~.
that 	encourages 	simultaneous 	tiling 	may 	inc:r.eage 	the 	danger 	of
anticompetitive 	price 	coordination.
IV. 	~~latiQn8
Unnece~sary:
Inhibiting 	Prjce 	CQm~etit5..Qn 	b'!J!
The 	requirements 	that 	I 	have 	discus6ed, 	individually 	and 	in
combination; 	create 	a 	pricing 	rigidity 	that 	iB 	likely 	to 	distort
the 	marketplace 	in 	a 	variety 	of 	waye. 	In 	particular, 	the
effective 	proscription 	of 	rates 	responsive 	to 	demand 	impairs 	the
ability 	of 	movers 	to 	use 	their 	facilities 	efficiently 	and
thereby 	increa6es 	the 	total- cost 	of 	moving 	services.
we 	believe 	that 	these 	costly 	regulatory 	constraints 	on 	the
public 	moving 	industry 	are 	not 	justified. 	Indeed, 	the 	relaxation
in 	1981 	of 	formal 	price 	and 	entry 	restrictions 	apparently
reflects 	a 	realization 	that 	the 	market 	could 	function
competitively 	And 	that 	the 	industry 	did 	not 	warrant 	public
utility 	regulation. 	This 	same 	ins1.ght 	should 	suggest 	thot 	the
:::-emaining 	constraints 	arE: 	unnecessary 	and 	in 	fact
counterproductive.
3/tkcant.rrcg 	11 	112188 	12 t 01

..
v. 	£ummary 	and 	Conclu~iona
In 	summary, 	we 	pelieve 	that 	thf{ frequency 	\>rith which 	a 	mover
may 	revise 	its 	rates 	should 	not 	be 	limited, 	so 	long 	as 	consumers
can obtain· correct 	information 	about 	applicable 	c.harges, 	and 	that
·conf3umers - should 	not 	be 	de·prived :0£· the 	full 	benaftts 	of 	mover
. pricing 	. flexibility, 	including" the 	availability 	of 	binding
estimates· 	And 	published 	demand-sensitive 	discounta, 	such 	as
. 	."
5eaBonaldisc6urits~
The 	Division 	of. Consumer 	Affairs 	may.\<>'ant 	to. consider, 	in
conjunction 	with 	its 	promulgation 	of 	new 	rules, 	regulatory
reforms 	that 	would 	allow 	each 	mover 	to 	change 	its 	prices 	more
frequently 	than 	semiannually 	and 	implement 	its 	revised 	rates
more 	quickly. 	This 	type 	of 	system, 	sometimes 	called 	/I file 	and
go, /I 	would 	increase 	considerably 	the 	pricing 	flexibil i ty 	of 	New
Jersey 	movers 	and 	would 	thereby 	eliminate 	many 	of 	the
deficiencies 	of 	the 	current 	scheme. 	These 	reforms, 	which 	would
allow 	such 	promotional 	pricing 	as 	demand-sensitive 	discounting,
combined 	with 	measures. that 	would 	allow 	movers 	to 	offer 	binding
estimates, 	would 	go 	a 	long 	way 	toward 	fully 	realizing 	the 	pro-
competitive 	and 	pro-consumer 	objectives 	of 	both 	the 	Act 	and 	the
rules.
I 	hope 	you 	find 	these 	comments 	of 	assistance. 	Please 	let me
know 	if 	I 	can 	provide 	any 	additional 	information 	or 	analysi~.
3/tkcarrt .m::::g 	12 	112188 	12:01