Compare pipeline pricing to pricing by other modes, and describe how the pipelines price their services.

The major difference between pipeline and other modes of transportation is that pipelines do not use freight classification system such as the system used by rail and truck. Pipelines are able to carry a very limited number of goods. That limitation makes specialization of commodities rates unnecessary. Pipeline rates are low. Pipelines carry 20 of the ton mile capacity but account for 4 of ton mile revenue.

The nature of pipeline operations (one-way movement, limited geographic coverage of points, limited products, etc.) provides little opportunity to provide differential pricing practices. Pipelines quote rates on a per-barrel basis (one barrel equals 42 gallons). Quotes for rates are typically point-to-point or zone-to-zone. Also, minimum shipment sizes, usually called tenders, are required; these range from 500 barrels to 10,000 barrels.

THX *so* much