INVESTIGATION AND SUSPENSION DOCKET No. M-11171 ALL FREIGHT BETWEEN MIDWESTERN STATES AND

CALIFORNIA-UTAH

Submitted March 3, 1941. Decided August 13, 1943

1. In I. and S. Docket No. M-1117, proposed motor common carrier all-commodity less-than-truckload rates, with certain exceptions, between Chicago, Ill., St. Louis and Kansas City, Mo., and Omaha, Nebr., and Los Angeles and San Francisco, Calif., and between Chicago, Kansas City, and St. Louis, and Salt Lake City, Utah, found just and reasonable. Proceeding discontinued. 2. In No. MC-C-180, proceeding discontinued as to motor common carrier rates, minimum 18,000 pounds, on all commodities, with certain exceptions, from Chicago, Milwaukee, Wis., and St. Louis to Los Angeles and Salt Lake City, because these rates have been canceled.

3. In No. MC-C-197, motor common carrier rates, minimum 30,000 pounds, on all commodities, with certain exceptions, from Chicago to Portland, Oreg., and Seattle, Spokane, and Tacoma, Wash., found just and reasonable. ceeding discontinued.

D. C. Stone and John M. Hickson for respondents.

Pro

Dana T. Smith, Stanfield Johnson, L. N. Bradshaw, Conrad Olson, H. C. Barron, J. P. Plunkett, V. P. Brown, and Thomas H. Maguire for protestants and others.

REPORT OF THE COMMISSION

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

By schedules filed to become effective June 25, 1940, the motor common carriers, parties to the tariff of Agent D. C. Stone, proposed to establish new commodity rates on all kinds of freight, with certain exceptions,2 on (1) less than truckloads between Chicago, Ill., Kansas City and St. Louis, Mo., and Omaha, Nebr., and Los Angeles and San Francisco, Calif., of $3.50; and between Chicago, Kansas City, and St. Louis, and Salt Lake City, Utah, of $2.75; and (2) rates, minimum 18,000 pounds, from Chicago, Milwaukee, Wis., and St. Louis to Los

3

1 This report also embraces No. MC-C-180, All Freight Rates from Midwest to Los Angeles and Salt Lake City; and No. MC-C-197, All Freight Rates from Chicago to the Pacific Northwest.

The exceptions are articles more than 18 feet long, 7 feet 6 inches wide, or 8 feet high; automobiles; trucks; fresh cream and milk; explosives, and other dangerous articles other than fireworks; household goods, livestock; perishable freight; fresh fruit; fresh vegetables; live pigeons; live poultry; and shipments in bulk.

Rates are stated in amounts per 100 pounds, and do not include the general increases of March 1942.

Angeles of $2.75; from Chicago and Milwaukee to Salt Lake City of $2.05; and from St. Louis to Salt Lake City of $2.01. By schedules filed to become effective September 3, 1940, the Consolidated Freightways, Inc., a motor common carrier, and other motor common carriers parties to its tariff, proposed to establish new commodity rates, minimum 30,000 pounds, on freight, consisting of any articles rated first, second, third, or fourth class, with certain exceptions, from Chicago to Portland, Oreg., and Seattle, Spokane, and Tacoma, Wash., of $2.75. All of these rates were protested by the transcontinental rail carriers.

In the title proceding, we suspended the operation of the proposed schedules containing the less-than-truckload rates until December 22, 1940, and the effective date of the schedules was voluntarily postponed until September 14, 1942, when they became effective.

In No. MC-C-180, we permitted the rates, minimum 18,000 pounds, and charges to become effective on June 25, 1940, and, upon our own motion, we instituted an investigation concerning their reasonableness and lawfulness otherwise, and the rules, regulations, and practices affecting such rates and charges. The respondents canceled these rates on December 10, 1941, and they will not be further considered. The proceeding will be discontinued.

In No. MC-C-197, we permitted the rates, minimum 30,000 pounds, to become effective on September 3, 1940, and, upon our own motion, we instituted an investigation concerning their reasonableness and lawfulness otherwise, and the rules, regulations, and practices affecting such rates. These proceedings were heard separately, but they present related issues and will be disposed of in one report.

Investigation and Suspension Docket No. M-1117.-On May 14, 1940, the rail carriers established rates, minimum 30,000 pounds, on all kinds of freight, with certain exceptions, from transcontinental groups D to N, inclusive, which include, among others, Chicago, Kansas City, Omaha, and St. Louis, to Pacific coast terminals, Seattle to San Diego, Calif., inclusive, of $2.75; and $2.05 from Chicago and $2.01 from St. Louis to Salt Lake City. In All Freight to Pacific Coast, 238 I. C. C. 327 and 248 I. C. C. 73, the Commission found that these rates were not shown to be unlawful. Immediately after the rail rates became effective, certain forwarders established less-than-carload rates of $3.50 to the Pacific coast terminals and $2.75 to Salt Lake City. The rates here in issue are designed to be competitive with such forwarder rates. The respondents, since 1937, have maintained lessthan-truckload transcontinental rates designed to be competitive with the rates of the forwarders. Such motor forwarder-competitive rates, for example, between Chicago and Los Angeles, San Francisco, and Salt Lake City are as follows:

1 Effective Aug. 22, 1940, rate-basis 1 rates between Chicagoland Salt Lake City were reduced to $1.85*

These motor forwarder-competitive rates apply on thousands of articles, each of which is specifically named and assigned one of the five commodity rate bases. The ratings in the national motor freight classification govern as to these rates. The proposed rates alternate with the motor forwarder-competitive rates and apply only when they result in a lower charge than the latter. The proposed rates may be compared with the respondents' less-than-truckload rates, classes 1 to 4, inclusive, for example, between Chicago, and Los Angeles, San Francisco, and Salt Lake City, which are shown in the following table:

Apparently some time in 1940, 159,291 pounds of less-than-truckload shipments from Chicago to Salt Lake City and Pacific coast points were transported in 10 trucks at the motor forwarder-competitive rates ranging from $2.15 to $3.50, and the average rate was $2.46. At the hearing, the witness agreed to furnish copies of the manifests covering these shipments, which would show, among other things, the ratings, rates, and charges. The copies of the manifests submitted, however, do not contain such data, and they are of little help in determining the characteristics of the traffic in these respects.

It is fairly inferable, from the thousands of articles on which the motor forwarder-competitive rates apply, that a substantial amount of the respondents' less-than-truckload traffic between the considered points moves under such rates. It appears unlikely that the respondents can expect to transport any volume of traffic at either class rates or forwarder-competitive rates which are substantially higher than the forwarder rates. The proposed rates fill in the gap in the respondents' basis of rates, which, since 1937, have been designed to be competitive with the rates of the forwarders. The proposed rates

appear to be relatively reasonable from the standpoint of the respondents' other forwarder-competitive rates hereinbefore discussed.

No. MC-C-197.-The Consolidated Freightways and its connections in the transportation of traffic from Chicago to the Pacific Northwest substitute rail service from Chicago, and Minneapolis, Minn., to Marmarth, N. Dak. The rail service used is the Chicago Great Western Railway Company from Chicago to Minneapolis; and the Chicago, Milwaukee, St. Paul and Pacific Railroad Company from Chicago or Minneapolis to Marmarth.

The rail carriers contend that the substituted service is unlawful because the rail routes do not parallel the highway routes of the Consolidated Freightways. No question is raised, however, as to the respondents' authority to operate between the points of origin and destinations here involved. The rail carriers also refer to Substituted Freight Service, 232 I. C. C. 683, in which the Commission condemned as unlawful certain services rendered by the predecessor of Consolidated Freightways. There is no showing, however, that the substituted service now being performed by the respondents does not conform to the conditions set forth in Substituted Freight Service, supra.

The motor all-commodity rate of $2.75, minimum 30,000 pounds, from Chicago to the Pacific Northwest is the same as the rail all-commodity rate. The motor rate, however, is restricted to articles rated from first class to fourth class, inclusive, with certain exceptions, and applies only on 30,000 pounds of such articles as have a shipping density of not more than 1,500 cubic feet, or an average of 20 pounds a cubic foot. Consolidated Freightways' vehicles have capacities averaging more than 1,500 cubic feet. The density of transcontinental traffic transported by the rail carriers under their all-commodity rates does not exceed 9.75 pounds a cubic foot. Consolidated Freightways, up to the time of the hearing, had not transported any traffic under the all-commodity rate of $2.75, and, accordingly, it had no information concerning the transportation characteristics of the articles that may move at that rate. It is unlikely, however, that there would be offered for motor transportation at the all-commodity rate a substantial volume of traffic which would weigh at least 20 pounds a cubic foot. Articles of that density would usually move upon motor specific commodity rates which are generally lower than $2.75. Consolidated Freightways, however, apparently is of the opinion that some traffic would be attracted to the motor lines by the rate under investigation,

The exceptions are articles more than 22 feet long, 6 feet wide, or 6 feet high; single articles weighing over 5 tons; liquid acids; automobiles; berries; fresh cream and milk; explosives; freight requiring refrigeration; furniture; household goods; livestock; nursery stock; live poultry; and raw, spun, and thrown silk.

and that, without such a rate, it has no hope of obtaining a share of the traffic.

Based on the highway distance from Chicago to Seattle of approximately 2,089 miles and the 30,000-pound minimum, the rate of $2.75 would yield 39.5 cents a truck-mile, which appears to be reasonably compensatory. We conclude that the rate of $2.75 is just and reasonable.

Findings. We find, in Investigation and Suspension Docket No. M-1117, that the proposed rates are just and reasonable, and the proceeding will be discontinued.

In No. MC-C-180, the proceeding will be discontinued because the rates under investigation were canceled.

We find, in No. MC-C-197, that the rate under investigation is just and reasonable, and the proceeding will be discontinued.

An appropriate order will be entered.

ALLDREDGE, Chairman, concurring:

The so-called all-freight rates do not, in my opinion, conform to proper classification principles, and the less-than-truckload rates considered in I. and S. No. M-1117 are even more objectionable in this respect than are the truckload rates considered in No. MC-C-197. I concur in the report out of deference to the action of a majority of the Commission in All Freight to Pacific Coast, 248 I. C. C. 73, in which I dissented, and because it would be unfair to respondents to deny them the privilege of maintaining rates competitive with those of freight forwarders and other carriers.

42 M. C. C.