INVESTIGATION AND SUSPENSION DOCKET No. M-2113 VEHICLES FROM MINNESOTA AND NORTH DAKOTA TO MONTANA AND NORTH DAKOTA POINTS

Submitted April 19, 1943. Decided August 4, 1943

Respondent's proposed truckload rates on automobiles, trucks, and trailers, by truck-away, from Fargo, N. Dak., and Duluth, Minneapolis, and St. Paul, Minn., to Ambrose and Colgan, N. Dak., found unlawful, because of lack of authority to serve such destinations, and respondent's proposed rates to certain other western North Dakota and eastern Montana points found unjust and unreasonable. Proposed schedules ordered canceled, and proceeding discontinued.

No appearance for the respondent.

R. W. Cronon, John F. Sullivan, and J. P. Plunkett for protestants. REPORT OF THE COMMISSION

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

Exceptions were filed by the protestants to the recommended order of the examiner. Our conclusions differ slightly from those recommended.

By schedules filed to become effective October 12, 1942, Northern Truck Line, Inc., of Williston, N. Dak., a motor common carrier, proposed to establish new truck-away commodity rates, minimum 4 vehicles or 10,000 pounds, whichever makes the lowest weight, on automobiles, trucks, and trailers, each weighing from 2,950 pounds, or less, to 5,000 pounds, from Fargo, N. Dak., and Duluth, Minneapolis, and St. Paul, Minn., to 18 points in western North Dakota 1 and 28 points in eastern Montana.2 Upon protest of certain rail carriers, operation of the proposed schedules was suspended until May 12, 1943. The effective date of the schedules was voluntarily postponed by the respondent until July 12, 1943, when they became effective. The respondent did not appear at the hearing. Rates will be stated in amounts per vehicle,

1

1 Alexander, Alkabo, Ambrose, Beach, Belfield, Bowman, Cartwright, Colgan, Dickinson, Fortuna, Grenora, Hanks, Kildeer, Marmarth, New England, Reeder, Watford City, and Williston.

2 Alzada, Baker, Bainville, Broadus, Brockton, Circle, Culbertson, Ekalaka, Fort Peck, Froid, Frazer, Fairview, Glasgow, Glendive, Jordan, Lambert, Medicine Lake, Miles City, Nashua, Opheim, Oswego, Plentywood, Poplar, Scobey, Sidney, Terry, Wibaux, and Wolf Point.

except as otherwise indicated, and the rail rates do not include the general increases which were effective from March 18, 1942, to May 15, 1943.

On April 15, 1943, in No. MC-63513 (Sub-No. 11), division 5 granted respondent a certificate authorizing the transportation, by the truckaway method, of automobiles, trucks, and trailers from Fargo, Duluth, Minneapolis, and St. Paul to points in North Dakota and Montana on and within the boundaries described in the margin hereof. The respondent's proposed and present rates to Ambrose and Colgan, N. Dak., are for service without the scope of its operating authority, and are therefore unlawful and should be canceled from its tariff. The respondent's rates are divided into 14 columns or weight groups. The rates in the first column apply on vehicles each weighing not over 2,950 pounds, and the rates in the fourteenth column apply on vehicles weighing not more than 5,000 pounds. The rates for the most part increase progressively with the weights. There is a range of 150 pounds between the lowest and highest weight in each column, except as follows: The first column, as noted, applies on vehicles weighing 2,950 pounds or less, the fourteenth column applies on vehicles weighing from 4,751 to 5,000 pounds, and the eighth column applies on vehicles weighing from 3,851 to 4,150 pounds. Apparently the respondent's intention was to have the weights in the eighth column range from 3,851 to 4,000 pounds, since the ninth column applies on vehicles weighing from 4,001 to 4,150 pounds, and there would be conflicting rates on vehicles in the latter range of weights. The proposed minimum of 4 vehicles, or 10,000 pounds, to all practical intents and purposes means a minimum of 10,000 pounds, since this is less than the combined weight of 4 vehicles each weighing 2,951 pounds or more. The respondent has no rates in effect at present on the vehicles between the points embraced in this proceeding, except on those weighing 2,950 pounds or less, which were not suspended and are not here in issue.

The destinations in North Dakota are divided into rate groups 2 and 4, and the destinations in Montana are divided into rate groups 6, 8, 10, and 12. To destinations in the same group, uniform rates are proposed from Duluth, Minneapolis, and St. Paul, and somewhat lower rates are proposed from Fargo.

To points and places in that part of North Dakota on and west of a line beginning at the boundary of United States and Canada and extending along U. S. Highway 85 to its junction with North Dakota Highway 25, thence along North Dakota Highway 25 to its junction with North Dakota Highway 22, thence along North Dakota Highway 22 to Reeder, and thence along an unnumbered highway to the North Dakota-South Dakota State line, and those in that part of Montana on and east of a line beginning at the Montana-Wyoming State line and extending along U. S. Highway 212 to Miles City, and thence along Montana Highway 22 to the boundary of the United States and Canada.

Appendix A hereto shows the proposed rates on automobiles weighing 3,150 pounds, which the protestants selected as a fair average weight per automobile, from Fargo, Duluth, Minneapolis, and St. Paul, to representative points in the six groups referred to; the truckload rates from St. Paul to the same points maintained by motor carriers parties to the tariffs of National Automobile Transporters Association, agent; and the comparable carload rail rates in amounts per vehicle computed from their rates stated in amounts per 100 pounds. The proposed rates are generally lower than the competitive motor and rail rates.

As illustrative of the importance of automobile traffic to the rail lines, it is shown that, in 1941, 2 rail carriers transported 442 carloads of automobiles to 25 of the considered destinations, presumably from the points from which the proposed rates would apply.

The transportation of automobiles by rail entails certain expenses to the shipper or consignee, as the case may be, in addition to the line-haul charges, which are not incurred when motor carriage is used. When automobiles are shipped by rail, they are without gasoline and oil, batteries are not installed, and sometimes the bumpers are demounted. There are some additional expenses for supplying these deficiencies at destination. The proposed rates include pick-up and delivery services, and automobiles transported by the truck-away method are said to be completely assembled and ready to be driven when they are delivered at destination. A study made some years ago indicated that the disabilities in rail, as compared with truckaway service, were equivalent to approximately $2.40 per automobile, and protestants believe the difference is greater at the present time. The rail carload rates on automobiles between the points under consideration generally are lower than the normal rail basis of first class. From Minneapolis and St. Paul to 22 representative destinations, these rail rates range from 66.2 to 81.7 percent of first class, and are said to have been established because of highway competition. Protestants state that further reductions in their rates will be necessary if the proposed rates become effective. They contend that the advantages of shipping automobiles by truck, hereinbefore referred to, are sufficient to attract the traffic to the motor carriers when motor and rail rates are on a parity. Such advantages are enhanced when the motor rates are lower than the rail rates.

If the rail carriers should meet the proposed rates, the combinations of such rail rates and the rail rates from Janesville, Wis., and Detroit, Mich., to the origins here under consideration, would break down the through rail rates from Janesville and Detroit to these destinations. For example, from Detroit to Williston, on an automobile

weighing 3,150 pounds, the rail carload rate is $86 (the equivalent of $2.73 per 100 pounds) and the combination rate would be $79.65 (the equivalent of $2.53 per 100 pounds), made up of the carload rail rate of $1.28 per 100 pounds from Detroit to St. Paul, and $1.25 per 100 pounds (equivalent to the proposed rate of $39.33), from St. Paul to Williston.

The table below shows the highway distances from Fargo, Duluth, and St. Paul to representative points and, based on these distances and the minimum of four vehicles per truckload, the revenues per loaded truck-mile under the proposed rates on vehicles weighing 3,150 pounds:

If the respondent's empty and loaded mileages are the same, its revenues per truck-mile for the representative movements shown in the foregoing table would be one-half those shown, or from 10.5 to 16.2 cents. It reasonably may be inferred, however, that the empty mileage exceeds somewhat the loaded mileage, if the former includes the empty movements from and to the carrier's terminal at Williston. Appendix B hereto shows the respondent's present truckload rates per automobile weighing 2,950 pounds or less from Minneapolis and Fargo to all destinations in the six groups, representative proposed rates per automobile weighing more than 2,950 pounds, and their equivalents in amounts per 100 pounds computed at the highest weight in each of the columns shown. It will be noted from these comparisons that the proposed rates, in amounts per 100 pounds, on the heavier automobiles are generally less than the rates proposed on the lighter automobiles. Under the proposed rates, the total charges for transporting 10,000 pounds of automobiles, from Minneapolis to group 10 Montana points, for example, would range from $142.70 on vehicles weighing 5,000 pounds each to $161.61 on vehicles weighing 2,951 pounds each. Rates productive of such anomalies are manifestly un

just and unreasonable. National Automobile Transporters Assn. v. Crawford, 41 M. C. C. 5, 8, and 9. We express no opinion as to the propriety of stating rates in amounts per vehicle, since this question, among others, is pending in docket No. 28190, New Automobiles in Interstate Commerce. Until it is determined in that proceeding, however, there appears to be no reason why motor carriers should not continue to state their rates in amounts per automobile, if they see fit to do so.

As noted, the respondent did not appear at the hearing and the record contains insufficient data upon which to determine a basis of reasonable minimum rates. It seems clear, however, that rates under which a carrier's total charges for the transportation of the same weight of automobiles between the same points progressively increases as the weight per automobile decreases, are prima facie unreasonable and require special justification.

We find that the proposed rates to Ambrose and Colgan, N. Dak., are unlawful because respondent lacks authority to serve such points, and that the proposed rates to the other destinations are unjust and unreasonable.

An order will be entered requiring cancelation of the schedules containing the proposed rates and discontinuing the proceeding.

APPENDIX A

Comparison of the respondent's proposed rates on automobiles weighing 3,150 pounds each with the truckload and carload rates of competitive motor and rail carriers

1 These rates include the increases effective in March 1942, which have not been canceled by these carriers. Rail rates are computed from rates stated in amounts per 100 pounds in effect prior to the general increases of March 1942, which have been ordered canceled.

42 M. C. C.