Is Regulation Necessary for Value-of-Service Pricing?

This article presents evidence for the existence of value-of-service pricing in the never-regulated market for trucking services to haul Florida produce. Rates per truckload are found to increase by eleven to twelve cents for every one dollar increase in the average daily loss in the value of the cargo due to product deterioration, ceteris paribus. This result is at variance with the commonly held belief that value-of-service pricing in transportation is a form of price discrimination made possible by the policies of rate bureaus and regulatory agencies.