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INVESTIGATION AND SUSPENSION DOCKET No. M-1824 1

ALCOHOLIC LIQUORS AND WINES IN OFFICIAL
TERRITORY

Submitted June 27, 1942. Decided May 13, 1943

1. Proposed reduced motor common carrier classification-exception rating on alcoholic liquors and wines between points in trunk-line and a part of New England territories, on the one hand, and points in central territory, on the other, and proposed reduced commodity rates from and to certain points in these territories, found unjust and unreasonable. Suspended schedules ordered canceled, and reasonable minimum basis prescribed. 2. In No. MC-C-309, rates of respondent motor common carriers on alcoholic liquors and wines from certain points in Connecticut, Maryland, Massachusetts, New Jersey, New York, and Pennsylvania to certain points in Illinois, Iowa, Minnesota, and Ohio, and from certain points in Pennsylvania to certain points in Maryland, found unjust and unreasonable. Reasonable minimum rates and minimum weight prescribed.

J. E. Haydon, Joseph H. Edwin, and J. J. Johnson for respondents. Donald P. Kipp for protestant.

F. C. Hefferren, Kemper A. Dobbins, Horace L. Walker, and Frank H. Luther for others.

REPORT OF THE COMMISSION

DIVISION 3, COMMISSIONERS MILLER, PATTERSON, AND JOHNSON BY DIVISION 3:

Exceptions were filed by the Eastern-Central Motor Carriers Association, hereinafter called the association, and the rail carriers to the order recommended by the examiner. Our conclusions differ from those recommended.

In Investigation and Suspension Docket No. M-1824, by schedules filed to become effective September 30, 1941, and later, respondent motor common carriers, members of the association, proposed to establish a classification-exception rating of column 44, minimum 40,000 pounds, on alcoholic liquors and wines, between points in trunk-line and a part of New England territories, on the one hand, and points in central territory, on the other, and commodity rates equivalent to 44 percent of first class, minimum 40,000 pounds, except as hereinafter

1 This report also embraces No. MC-C-309, Liquors and Wines in Official and Western Trunk Line Territories.

noted, from certain eastern points to Chicago, Ill., Lawrenceburg, Ind., Detroit, Mich., and Canton, Cincinnati, Cleveland, Columbus, and Toledo, Ohio, and from Cincinnati, Lawrenceburg, and Detroit to certain points in Maryland, Pennsylvania, New Jersey, and New York, and to Washington, D. C. Upon protest of Kramer Bros. Freight Lines, Inc., hereinafter referred to as Kramer or protestant, operation of the proposed schedules was suspended until April 30, 1942, and subsequently postponed by the respondents until July 31, 1943.

No. MC-C-309 is an investigation instituted by the Commission, division 2, upon its own motion, into and concerning the reasonableness and lawfulness otherwise, of the rates and charges, and the rules, regulations, and practices affecting such rates and charges, applicable to the transportation of alcoholic liquors and wines, minima 30,000 and 40,000 pounds, from Baltimore, Md., Boston, Mass., Hartford, Conn., New Brunswick, Linden, and Trenton, N. J., New York, N. Y., and Philadelphia, Pa., and points grouped with these origins, to Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown, Ohio, Chicago, Des Moines, Iowa, and Minneapolis, Minn., and points grouped with these destinations, and from Pittsburgh, Pa., and points grouped therewith, to Baltimore, Cedarhurst, Dundalk, Relay, and St. Denis, Md., and points grouped with these destinations, maintained by Wilson Freight Forwarding Company, Inc., Liberty Motor Freight Lines, Incorporated, and other motor common carriers participating in tariff MF-I. C. C. No. 8 of the latter carrier, and in the tariffs of Agents J. A. Connors and Everett H. Russell. Since the institution of the investigation, Wilson Freight Forwarding Company, Inc., has canceled certain commodity rates on alcoholic liquors, minimum 30,000 pounds, from Pittsburgh to the Maryland points, and Liberty Motor Freight Lines, Incorporated, has canceled rates subject to a minimum of 40,000 pounds from Philadelphia and New York City to Chicago, and from Philadelphia to five Ohio points.

The proceedings were heard on a consolidated record. Appearances were entered by Yankee Lines, Inc., Motor Cargo, Inc., and the association, for respondents; the Central States Motor Freight Bureau, Inc., in support of the proposed schedules and the rates under

42 M. C. C.

investigation in docket No. MC-C-309; the rail carriers in official territory, in partial support of the proposed rates; the protestants; and Joseph A. Seagram & Sons, Inc., and affiliated and subsidiary companies, who ship these commodities, in opposition to truckload minima in excess of 20,000 pounds. Rates are stated in cents per 100 pounds, and are those in effect on February 4, 1942, the date of the hearing.

In the national motor freight classification (East), alcoholic liquors and wines are rated class F (55 percent of first class), minimum 30,000 pounds. The respondents, however, maintain an exception rating of column 50, minimum 20,000 pounds. Commodity rates, minimum 40,000 pounds, apply from Baltimore and Philadelphia to Canton, Cincinnati, Cleveland, Columbus, and Toledo, from Philadelphia and New York City to Chicago, and from New York City and Boston to Des Moines and Minneapolis. Most of these rates are 44 percent of first class, a few are on a somewhat lower level, and those to Chicago are 44 percent of first class plus 5 cents. From Peekskill, N. Y., New York City, and New Brunswick, to Canton, Cincinnati, Cleveland, and Columbus, and from New Brunswick, Linden, and New York City to Youngstown, commodity rates ranging from 41.9 to 44 percent of first class, minimum 30,000 pounds, apply. From and to these points, in many instances, commodity rates, minimum 20,000 pounds, approximately 50 percent of the corresponding firstclass rates are in force. Since these proceedings were instituted, however, Liberty Motor Freight Lines, Incorporated, has canceled rates on this basis from and to several of the named points and established in lieu thereof commodity rates, minimum 23,000 pounds, ranging from 1 to 7 cents higher than the suspended rates. As hereinbefore stated, the proposed exception rating is column 44, minimum 40,000 pounds. Cancelation of the present exception rating of column 50, minimum 20,000 pounds, is not proposed. The proposed commodity rates to Chicago are equivalent to 44 percent of first class plus 5 cents; that from Baltimore to Detroit is equivalent to 44 percent of first class plus 1 cent; and others are on the basis of 44 percent of first class, except that from Lawrenceburg to Rochester, N. Y., which is equivalent to 54 percent of first class; and are subject to a minimum of 40,000 pounds.

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Typical present and proposed rates, highway distances, and truckmile revenues are set forth in the table below:

The present commodity rate is 76 cents but it alternates with the class rate based on the exception rating of column 50. The latter is therefore applicable.

This rate would be 54 percent of first class.
Minimum 30,000 pounds.

Yankee Lines, Inc., operates between points in Pennsylvania and Maryland east of U. S. Highway 220, Phillipsburg and Trenton, N. J., points in New Jersey roughly described as south of Trenton, points in Delaware, and Washington, on the one hand, and points in Ohio, certain points in West Virginia, and those in Pennsylvania west of U. S. Highway 220, on the other. It maintains terminals at Philadelphia, Baltimore, Akron, Cleveland, and several other points. In 1940, it operated 2,210,454 loaded and empty truck-miles at an average total cost on all traffic, equally divided between truckload and less than truckload, of 21.1 cents a mile. It estimates that its cost of transporting alcoholic liquors was about 16 cents a truck-mile and that it must earn a margin of 333 percent above cost to realize a reasonable profit. It also concedes that some costs of operation have increased since 1940. This carrier has 84 vehicles, some of which have a loading capacity of 40,000 pounds of alcoholic liquors, and 3 of which have a capacity of nearly 50,000 pounds. State regulations, however, especially those of Pennsylvania, through which this traffic must be transported, limit loadings so that not more than 25,501 pounds of freight can be transported legally in the vehicles of greatest capac

ity. The following table shows the load limits under Pennsylvania regulations of the several types of vehicles utilized by this carrier, the approximate cost of operation of each type per mile, and per 100 pounds, based on a movement from Philadelphia to Cleveland:

This respondent concedes that these costs are based on averages and that the actual costs may be 10 percent higher or lower than those shown. The data on which these figures are based are not disclosed, and they do not appear to be consistent with the claimed operating cost of about 16 cents, above mentioned. The average legal load limit of its equipment is 18,165 pounds. Approximately 38 vehicles have physical carrying capacities of 40,000 pounds or more. It transports approximately 40 truckloads of alcoholic liquors weekly, and moves some of this traffic under rates subject to a minimum of 40,000 pounds. In doing so it utilizes in some cases 2 vehicles, in others 3, and in still others 4, depending upon the weight of the shipment tendered and the availability of equipment. It attempts to use equipment to the best advantage, and the availability of units at or near the shipping point is a factor in determining the number to be used in handling a given shipment. Of course, it is unable to utilize to the fullest the capacities of its larger units of equipment, because if it did so it would violate the State laws.

A contention of Yankee Lines, Inc., is that the proposed 40,000pound volume minimum would result in certain savings in operating expense as compared with the costs incurred under a truckload minimum of 20,000 pounds. In certain cities, this respondent is compelled to employ extra drivers for driving its vehicles between its terminal and the point of loading or unloading, and extra helpers to assist in the loading or unloading. The wages received by this extra labor are determined under contracts between the carrier and the labor unions. At Philadelphia, a vehicle moved from the carrier's terminal to the shipper's dock for loading is driven by a city driver who is