INTERSTATE COMMERCE COMMISSION REPORTS-MOTOR CARRIER CASES

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INVESTIGATION AND SUSPENSION DOCKET No. M-1995 1 CIGARETTES AND TOBACCO BETWEEN NORTH CAROLINA POINTS AND PHILADELPHIA

Submitted November 6, 1942. Decided March 29, 1943

Rates of motor common carriers on cigarettes, tobacco, and related articles from Durham, Reidsville, and Winston-Salem, N. C., to Philadelphia, Pa., from Philadelphia to Durham and Winston-Salem, and from Reidsville to Pittsburgh, Pa., found unjust and unreasonable to the extent that they are subject to a minimum weight in excess of the capacity of a single vehicle. Reasonable truckload minimum weight prescribed for the future.

J. C. Weaver for respondent in I. and S. No. M-1995.

Edgar Watkins, Jr., for protestant in I. and S. No. M-1995 and for interested parties in support of respondents in No. MC-C-339. Lucian H. Cocke, Jr., D. Lynch Younger, and C. Y. Shafer for interested rail carriers.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND ALLDREDGE BY DIVISION 2:

Exceptions to the examiner's recommended order were filed by the Southern Motor Carriers Rate Conference, hereinafter called the southern conference, and by the rail carriers in official and southern territories.

In Investigation and Suspension Docket No. M-1995, by schedules filed to become effective April 5, 1942, The Transport Corporation of Virginia, of Blackstone, Va., hereinafter called Transport, a motor common carrier, proposed to establish a reduced commodity rate of 68 cents, minimum 36,000 pounds, on cigarettes and manufactured tobacco, with or without advertising matter, cigarette papers, or

1 This report also embraces No. MC-C-339, Tobacco Products from North Carolina to Pennsylvania.

Rates are stated in amounts per 100 pounds.

pipes, between Durham and Winston-Salem, N. C., and Philadelphia, Pa. Upon protest of the southern conference, operation of the schedules was suspended until November 5, 1942, when they became effective.

No. MC-C-339 is an investigation, instituted upon our own motion, concerning the reasonableness and lawfulness otherwise of the rates, minimum 36,000 pounds, and charges, and the rules, regulations, and practices affecting such rates and charges, maintained by motor common carriers parties to the tariffs of the southern conference, and the Middle Atlantic States Motor Carrier Conference, Inc., hereinafter called the northern conference, on cigarettes, tobacco, and related articles from Durham, Reidsville, and Winston-Salem, N. C., to Philadelphia, and from Reidsville to Pittsburgh, Pa. The two proceedings were heard together and will be determined in one report. The southern conference appeared in opposition to the proposed rate, and the southern and northern conferences defended the rates under investigation in No. MC-C-339. The rail lines oppose the rates in issue in both proceedings to the extent that they are lower than the rail rates. The articles upon which the rates in issue apply will be referred to as tobacco products.

The schedules suspended were filed March 5, 1942. The rate proposed was identical with corresponding north-bound rates maintained on that date by the conference carriers. On March 18, 1942, however, the conference rates were generally increased 6 percent, and it was alleged by the southern conference in its protest that the proposed rate would be 6 percent below the conference basis and to that extent unlawful. On May 8, 1942, Transport increased its rates 6 percent, including the proposed rate. When the period of suspension expired on November 5, 1942, the rate which became effective was the proposed rate increased 6 percent, or 72 cents. At the hearing, the conferences and rail carriers expressed no opposition to the establishment of a rate of 72 cents, minimum 36,000 pounds. The rate previously maintained by Transport was 78 cents, any quantity, not including the general increase.

The conference rates on tobacco products, minimum 36,000 pounds, are 72 cents from Durham, Reidsville, and Winston-Salem to Philadelphia, and 82 cents from Reidsville to Pittsburgh. The all-rail rates, minimum 36,000 pounds, are, from these North Carolina points to Philadelphia and New York, N. Y., 77 cents, and from Reidsville to Pittsburgh, 82 cents. The rail-water rate from the same origin points to Philadelphia is 72 cents, minimum 36,000 pounds. The motor rates to Philadelphia were established to meet rail-water competition which is not a factor at present as operations by water have been suspended. The motor carriers render a faster service between

these points than the rail carriers, and the motor rates include pick-up and delivery services not accorded under the rail rates. The rail carriers urge therefore that we should require that the motor rate to Philadelphia be no less than the all-rail rate. No tobacco-products traffic had been transported by rail at the 77-cent rate from Durham and Winston-Salem to Philadelphia for a year preceding the hearing. The conference carriers maintain a rate of 72 cents, minimum 15,000 pounds, from the North Carolina origins to New York, a more distant point to which Philadelphia would generally be intermediate.

The evidence establishes definitely that, by reason of weight restrictions of States through which this traffic moves, and the capacity of the equipment ordinarily used by motor carriers, 36,000 pounds of these products cannot be transported in a single vehicle. Loads of approximately 24,000 pounds are sometimes carried, but the normal truckload is 20,000 pounds. No cost evidence was adduced. The respondents do not contend, nor does the record establish, that they can transport a shipment of 36,000 pounds in more than one unit of equipment more economically than separate singletruckload shipments. Volume minimum weights in excess of truckload capacity are unreasonable in the absence of proof that such quantities can be transported in more than one unit of equipment at a lower cost per 100 pounds than single-truckload shipments. Rugs and Matting from East to W. T. L. Territory, 31 M. C. C. 193 and 34 M. C. C. 641. Based on a minimum of 20,000 pounds, the rate of 72 cents from Durham, Reidsville, and Winston-Salem to Philadelphia, 408, 411, and 458 miles, respectively, would yield revenues of 35.3, 35, and 31.4 cents a truck-mile, respectively, and the rate of 82 cents from Reidsville to Pittsburgh, 417 miles, would yield a revenue of 40 cents a truck-mile. These revenues appear to be reasonably compensatory.

The rail carriers contend that the establishment of motor rates on a basis the same as, or lower than, corresponding rail rates, but subject to a truckload minimum lower than the carload minimum, will result in an unfair competitive relation between the motor and rail carriers, and will unduly prefer the former and be unduly prejudicial to the latter. Under the proviso to section 216 (d) of the Interstate Commerce Act, the prohibition in that subsection, against common carriers by motor vehicle subjecting any person or description of traffic to any unjust discrimination or any undue or unreasonable prejudice or disadvantages, is inapplicable to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.

We find, in Investigation and Suspension Docket No. M-1995, that the proposed rate, as subsequently increased, is unjust and un

reasonable to the extent that it is subject to a minimum weight of 36,000 pounds; and that a truckload minimum weight of 20,000 pounds would be just and reasonable.

We find, in No. MC-C-339, that the rates under investigation are unjust and unreasonable to the extent that they are subject to a minimum of 36,000 pounds, and that a truckload minimum weight of 20,000 pounds would be just and reasonable.

An order for the future will be entered.

ALLDREDGE, Chairman, dissenting:

I dissented in Rugs and Matting from East to W. T. L. Territory, 34 M. C. C. 641, cited in support of the minimum weight prescribed, and I consider that the findings herein go further than those in that case. In the first place, I believe the report errs in considering weight restrictions of individual States and in disregarding the showing that loads of 24,000 pounds are sometimes carried. Moreover, the above case merely held that the minimum weight for the commodity there involved should not exceed the loading capacity of the equipment customarily used. I believe that the terminology employed contemplated the equipment customarily used throughout at least a rate-making territory and should not be interpreted to mean the capacity of the equipment operated by one or two carriers or between a few points. The latter application of the principle would inevitably lead to the confusing and undesirable result of a variety of minimum weights on the same traffic in the same territory and even between the same points over different routes. Assuming that the rule of the above-mentioned decision requires some reduction in the minimum weight in this instance, it is my opinion that the record does not contain sufficient evidence to enable us to determine the actual loading capacity of the equipment customarily used in handling the traffic involved.

42 M. C. C.

No. MC-2044 1

ROY C. JAMES COMMON CARRIER APPLICATION

Submitted December 8, 1942. Decided March 9, 1943

Upon further hearing:

1. Applicants, in Nos. MC-2044, MC-9145, and MC-27662, found entitled to continue operations as common carriers by motor vehicle of oil-field equipment from Houston, Tex., to oil-field locations in Texas and between Houston and oil-field locations in Louisiana, over irregular routes, by reason of operations on June 1, 1935, and continuously since that time.

2. Applicant, in No. MC-4964, found entitled to continue operation as a common carrier by motor vehicle of oil-field equipment from Houston to oil-field locations in Texas, and between Houston and oil-field locations in Oklahoma, over irregular routes, by reason of such operation on June 1, 1935, and continuously since that time.

3. Applicants, in Nos. MC-65263, MC-80730, and MC-87093 (now designated No. MC-44981 (Sub-No. 1)), found entitled to continue operations as common carriers by motor vehicle of oil-field equipment from Houston, Tex., to oil-field locations in Texas, and between oil-field locations in Texas and Louisiana except to the extent that applicant in No. MC-80730 has already been granted authority in No. MC-80730 (Sub-No. 1), over irregular routes, by reason of operations on June 1, 1935, and continuously since that time.

4. Issuance of a certificate to each applicant authorizing the respective operations described, approved upon compliance by each of them with certain conditions, and applications in all other respects denied. Prior report (embracing these), 29 M. C. C. 303.

5. Application in No. MC-4480 dismissed.

R. G. Hyett and Ray V. Gillispie for applicants.

Herbert L. Smith, Carl L. Phinney, Sam R. Sayers, Albert G. Walker, and Rollo E. Kidwell for protestants.

REPORT OF THE COMMISSION ON FURTHER HEARING

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON

BY DIVISION 5:

The applications herein considered were all filed under the "grandfather" clause of section 206 (a) or 209 (a) of the Interstate Com

1 This report also embraces No. MC-4480, J. D. Miller Common Carrier Application; No. MC-4964, Roy L. Jones Common Carrier Application; No. MC-9145, Roy E. Mays Common Carrier Application; No. MC-27662, M. A. Davis Transport, Inc., (successor to M. A. Davis) Common Carrier Application; No. MC-65263, O. F. Bright Contract Carrier Application; No. MC-80730, E. B. Snipes Common Carrier Application; No. MC-87093, H. E. Murphy Common Carrier Application; and No. MC-44981 (Sub-No. 1), Archie Lacy Common Carrier Application.