cargo is a reasonable indicator of urgency, as the interest
costs associated with shipping delays vary directly with value.
To supply prompt, readily available service necessitates the
existence of excess capacity ready to load on demand. Relative
queue lengths (i.e., amounts of excess capacity) are regulated
because carriers will join longer queues only if the costs
associated with the additional expected wait are less than or
equal to the premium over the rates being offered at shorter
queues. Therefore, shipper/receivers requiring prompt service
must pay more to compensate carriers for the additional costs
associated with longer waits. As there is nothing in this
explanation which is at variance with the operation of competi-
tive markets, value-of-service pricing should be found in un-
regulated, as well as regulated markets.


 Unfortunately it is rarely, if ever, possible to observe
such queues. These queues normally would not take the form of
lines outside a shippers' gates. Rather, vehicles would be
parked at their terminals, truck stops, or the operators'
homes. The researcher, then, must rely on indirect evidence of
this phenomenon. Both the insurance cost and the expedited
service arguments are based on the premise that value-of-
service price structures arise due to underlying cost differen-
tials between transport services for low and high valued car-
goes. If value-of-service price structures can be shown to
exist in unregulated, competitively structured markets, then
cost differences between transport of low and high valued car-
goes would be indicated. This follows because in a competitive
market sellers cannot discriminate between buyers on the basis
of differences in their demand elasticities. Therefore, simi-
lar charges would be expected across buyers for similar ser-
vices. Price differentials from buyer to buyer would be indi-
cative, then, of differences in the services delivered, rather
than of an exercising of market power on the part of the sell-
er.