Some theoretical and practical problems with cost-of-service pricing have been raised. An obvious question is whether cost-of-service pricing has any relevance for establishing prices. Prices charged by transportation companies are actually one of the criteria that guide intelligent shippers in selecting the mode of transportation or carrier that is most appropriate for their shipment. When the modal choice or carrier decision is made properly, the shipper will balance the carrier's price against the carrier's service characteristics such as transit time, reliability, and loss and damage record.