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transfer fee was determined by multiplying the estimated number
of transfer shipments by DHL’s average cost of handling such a
shipment, and (beginning in 1988) by adding a 2-percent markup to
average cost. Before 1987, DHL and DHLI/MNV did not employ any
method to determine the average cost per shipment or the volume
of transfer shipments. From 1987 through 1990, the cost data
used in the transfer fee formula were taken from the PLP model.
The shipment volumes used in the transfer fee formula were
not readily available when the transfer fee was instituted
because DHL did not focus on how shipments were routed. To
determine percentages of transfer shipments for 1987 and 1988,
the number of transfer shipments was estimated by counting
shipments originating in or destined for a Latin American
country, Mexico, and/or Canada, with appropriate adjustments, and
interviews with gateway managers. For 1989, the number of
transfer shipments was estimated by taking a percentage (based on
1987 and 1988 data) of international inbound shipments. Annual
transfer shipments for 1990 were estimated by sampling transfer
shipments for 1 week, calculating a daily transfer shipment
volume, and applying the percentage of daily transfer shipment
volume to total annual Western Hemisphere shipments. The same
procedure was used for 1991 as had been used in 1990, but using a
2-week sampling. A more refined transfer shipment cost
calculation was devised for 1991.
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