tions; that the transportation of dangerous explosives over the present highway system by properly qualified motor carriers under the Commission's safety regulations is not a particularly dangerous service * * *. The position of both the Commission and Mr. Burns, which positions are concurred in by the Military Traffic Management Agency, are in conflict with the position which appears on sheet 4 of the verified statement of Mr. Sam G. Tate as follows: "It is meant to imply that the movement of explosives, as found by the Interstate Commerce Commission heretofore, is a hazardous business and one that is entitled to reasonable rates to offset the additional expenses incurred in transporting such a commodity safely and efficiently." Similar disparities appear to exist in connection with the positions of Messrs. Hughes and Collinsworth as shown on pages 3 and 4 of their respective verified statements. Studies made by the Department of the Army relative to losses and accidents from rail handling of explosives establish that rail movements of this commodity likewise is not a particularly hazardous service. See appendix B attached hereto which shows pertinent data for the years 1943 through 1953. Appendix C shows similar data in connection with the movement of gasoline. Appendix D compares the percentages of loss and damages to gross revenues of explosives and other commodities for the years 1950 through 1953. Additional data on the handling of explosives has been gathered for the calendar years of 1954, 1955, and 1956. In 1954, there were no injuries or fatalities from the rail transportation of military ammunition and explosives. Three accidents occurred amounting to a total property and cargo loss of $47,205.98. Rail revenues from military ammunition and explosive traffic for the year 1954 amounted to approximately $54 million. Total losses for 1954, therefore, represent only nine-tenths of 1 percent of the revenue obtained from the rail transportation of military ammunition and explosives. This claim ratio compares most favorably with the total national rail claim ratio to revenue which was 1.168 percent for the year 1954. Information obtained from the office of Mr. H. A. Campbell, Bureau of Explosives, shows the following losses from the handling of all explosives traffic during the years 1955 and 1956. During 1955, no explosions but damages to ladings amounted to $4,009. During 1956, no explosions but damages to ladings amounted to $6,578, of which $4,585 were sustained on military traffic. The principal military loss was due to the damaging of 1 case of rockets in the amount of $4,230. The Military Traffic Management Agency is convinced that a rate of 65 percent of the first-class rate is not a reasonable rate for the movement of military traffic of ammunition and explosives via highway carriers. This agency is not prepared to state, at this time, what rate would be considered to be a reasonable rate for this traffic. An extensive study on this question was initiated during the latter part of 1955. This study is still being progressed as it is believed that every conceivable ratemaking factor must be fully explored before the Military Traffic Management Agency will be in a position to state to the motor carrier industry what rate level is considered reasonable for the transportation of ammunition and explosives. Attention in this connection is invited to the fact that over 21⁄2 years were devoted to a most extensive study of rail ammunition and explosives traffic and pertinent ratemaking factors prior to any initiation of negotiations on such traffic with the rail carriers. It is interesting to note that tariff commodiy rates published by motor carriers for the transportation of explosives traffic are in many instances well below 60 percent of the first-class motor rate. Attention in this connection is invited to appendix E which lists certain commodity rates on explosives traffic maintained for the account of a number of motor carriers. It is particularly interesting to note that these rates range from 25 percent of the motor carrier first-class rate to 78 percent of the motor carrier first-class rate with the majority of these rates reflecting 43 percent of the motor first-class rate. Not shown in appendix E are rates published on explosives, n. o. i., and fireworks, n. o. i., by Hayes Freight Lines Inc., in that company's motor freight tariff No. 89, MF I. C. C. No. 227. These rates are volume minimum rates with a minimum of 90,000 pounds. The rates from Falls Junction and Willow, Ohio, to Crane, Ind., are 100 cents per 100 pounds which rates reflect 37.1 percent of the rail Docket 28300 first-class rate of 269 cents. Similarly, the rate from Westerville, Ohio, to Crane, Ind. is 88 cents per 100 pounds which rate reflects 31.3 percent of the rail Docket 28300 first-class rate of 281 cents. The rail portion of military ammunition and explosive tonnage dropped from over 90 percent of the total in early 1950's to a low of only 37 percent during 1954. In the last paragraph of part II of his verified statement, Mr. Burns states that Interstate motor carriers are presently transporting 2 billion pounds (or 1 million tons) of ammunition and explosives annually. This appears to compare very favorably with the rail tonnage of approximately 1,400,000 tons transported during fiscal year 1956. It would, therefore, appear that the sole purpose of the munition carriers is to prevail upon the Commission to establish an unrealistic floor under military munitions rates. They hope in this way to not only regain the tonnage which has been recovered by the rail carriers but ultimately to transport practically all such traffic, without regard to the proved ability of the rail carriers to transport these commodities safely, efficiently, and profitably at the existing level of rates. In effect they request the Commission to ignore that portion of the national transportation policy which requires the preservation of the inherent advantages of the various modes of transportation. The prescription of minimum rates is a matter which should be approached with great caution. Certainly it should not be done by way of a collateral issue in a proceeding such as this. As Commissioner Freas so aptly stated at the 26th annual meeting of the Interstate Commerce Commission Practitioners: "Rate structures should be living things fully responsive to changing transportation and commercial needs. To the extent there is regulatory interference in setting minimum rate levels it should be to minimize promiscuous rate cutting. It should not, in my opinion, serve as an umbrella for the prodigal and inefficient. Neither shall it be exercised with the abandon that operates to stifle normal healthy competition which plays an important part in bringing about good service at the lowest cost consistent with maintaining in full vigor all necessary transportation agencies." STATE OF VIRGINIA, County of Arlington, 88: VERIFICATION Lt. Col. Andrew Paul Flanagan, USA, being duly sworn, deposes and says that the foregoing statement is true and correct to the best of his information, knowledge, and belief. ANDREW PAUL FLANAGAN. Subscribed and sworn to before me this 1st day of April 1957, by Lt. Col. Andrew Paul Flanagan who is known to me to be a member of the Armed Forces of the United States in active military service. JOHN C. KINNEY, (Authorized to perform the functions of a notary public by Article 136, Uniform Code of Military Justice.) CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon the parties of interest by mailing a copy thereof by first-lass mail, postage prepaid, and/or by hand-delivering same to each such party. Dated at Washington, D. C., this 1st day of April 1957. JOHN C. KINNEY, Major, JAGC, of Counsel. |