Applicant desires to institute a contract-carrier service for an oil company which would involve the distribution of liquid petroleum products from its refinery at Roxana to its bulk stations located at four Missouri points, namely, Bowling Green, St. Louis, Truesdale, and Union, and return. The equipment to be used would consist of a tractor and a tank semitrailer. The tank would be divided into two compartments, one with a capacity of approximately 3,100 gallons, and the other about 500 gallons. The small compartment would be used to handle slow-selling products in bulk, such as kerosene, thus avoiding the expense incident to the shipment of such commodities in drums. Applicant's representative testified that an agreement had been reached between applicant and the oil company relative to the institution of service in the event the application is approved. The proposed contract, however, was not submitted in evidence.

Transportation facilities available at present are provided by rail carriers operating in the considered territory. The oil company also operates two tank units between Roxana and St. Louis, but apparently prefers to use applicant's proposed service instead of extending its private-carrier operations. The record indicates that a contract carrier by motor vehicle, the Union Service Company, is now authorized to transport petroleum products from Wood River, Ill., to St. Louis and Troy, but that this carrier now is serving a competing oil company. The latter point is not involved in the application as amended, and this carrier did not contest the instant application.

A representative for the oil company to be served testified that the applicant's proposed service for the movement of its petroleum products would be advantageous to its operations. In this connection, the advantages specified by him are similar to those noted in House Contract Carrier Application, 1 M. C. C. 725, wherein the transportation involved was of a comparable character. In that case we pointed out that there are certain inherent advantages in the transportation of petroleum by motor carriers over their transportation by other agencies. For example, jobbers of petroleum products may receive those products in smaller quantities by motor carriers than by rail. This enables them to reduce the amount of stock which they must keep on hand and thereby limit their investment and increase their turnover. We also there stated that there was no valid basis for denying the considered applications in the absence of evidence that the continuation or institution of operations by apthence over U. S. Highway 61 to Bowling Green, Mo.; and (e) from Roxana over Illinois Highway 159 to the junction of U. S. Highway 67, thence over U. S. Highway 67 to the junction of U. S. Highway 66, and thence over U. S. Highway 66 to the junction of U. S. Highway 50, and thence over U. S. Highway 50 to Union. Return over these routes, with no service to intermediate points.

plicants as contract carriers of petroleum products from and to the points there involved would adversely affect other carriers by motor vehicle now lawfully engaged in transportation of like traffic from or to such points, or that applicants are not fit, willing, and able to provide transportation as contract carriers.

Applicant is a large, established operator with many years of experience in the motor-carrier business, and there is no question as to its qualifications, financially or otherwise, to conduct the proposed service. The only question is whether the proposed operation will be consistent with the public interest and the declared policy of the Motor Carrier Act, 1935. As has been seen, there is a demand by a shipper for the proposed service, and no motor carrier is here contending that it is in a position to render that service. The only transportation services available to such shipper from and to the points under consideration are those of several rail carriers, and they presented detailed evidence concerning the nature and extent of their services. In recommending denial of the application, much reliance was placed by the joint board upon the alleged adequacy of the rail service. But in this connection it should be observed that the policy declared in section 202 (a) of the act clearly contemplates the existence of transportation by highway as well as by rail, and we have held frequently that the fact that a community has adequate rail service is not a bar to the granting of authority to accord it motor-carrier service. For example, in granting a certificate to transport petroleum products in Bowles Common Carrier Application, 1 M. C. C. 589, we said:

Interveners point out that the growth of motor-carrier transportation, and consequent diversion of traffic from the rails to the highways, has contributed to large traffic losses by rail carriers, a diminution of their revenues, and an impairment of the value of their securities. They contend that the public convenience and necessity do not require the proposed services and that the grant of a certificate to applicant would be inconsistent with the policy of Congress declared in section 202 (a) of the act. One of the bases for this contention is that all of the origins and all of the destinations, except Elkhorn, now have adequate service by rail. We are advised by statute that it is the policy of Congress to foster and preserve in full vigor both rail and water transportation, but we are also directed in section 202 (a) to regulate transportation by motor carriers in such manner as to recognize and preserve its inherent advantages. There are certain inherent advantages in the transportation of petroleum products by motor vehicle. Among these are the reductions in amount of gasoline and other petroleum products which jobbers must keep on hand in storage tanks, and the elimination of the expense of trucking rail shipments of such products at destinations from tank cars to those jobbers who do not have storage facilities adjacent to the rail carriers' tracks. That a particular point has adequate rail service is not sufficient reason for denial of a certificate; shippers and consignees of petroleum products are entitled to adequate service by motor vehicle as well as by rail.

We find that applicant is fit, willing, and able properly to perform the duties of a contract carrier by motor vehicle and to conform to the provisions of the act and our rules, regulations, and requirements thereunder; that operation by applicant as a contract carrier by motor vehicle, in interstate or foreign commerce, of liquid petroleum products in tank trucks, between Roxana, on the one hand, and St. Louis, Union, Truesdale, and Bowling Green, on the other, over the regular routes specified above, with no service from or to intermediate points, will be consistent with the public interest and the policy declared in section 202 (a) of the act; and that a permit therefor should be granted.

An appropriate permit will be issued upon compliance by applicant with the requirements of sections 215 and 218 of the act, with our rules and regulations thereunder, and with the requirements estab lished in Contracts of Contract Carriers, 1 M. C. C. 628.

9 M. C. C.

No. MC-77958

PORTLAND VAN & STORAGE COMPANY BROKER
APPLICATION

Submitted February 5, 1938. Decided October 6, 1938

Operation by applicant as a broker of transportation of household goods and office equipment found not consistent with the public interest and with the policy declared in section 202 (a) of the Motor Carrier Act, 1935. License denied.

John M. Hickson for applicant.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS EASTMAN, LEE, AND ROGERS

BY DIVISION 5:

No exceptions were filed to the recommended order of joint board No. 172, to which the matter was referred, but we stayed the order. Our conclusions differ somewhat from those recommended.

By application filed February 12, 1936, Portland Van & Storage Company, a corporation, of Portland, Oreg., seeks a license authorizing operation as a broker of transportation of household goods and office furniture and equipment, in interstate or foreign commerce, between Portland and points throughout the United States. No one opposed the application.

Applicant has been engaged in the moving, transfer, and storage business since 1910. It transports household goods and office equipment in its own vehicles between Portland and points in California, Idaho, Oregon, and Washington, and performs a pick-up and delivery service at Portland in connection with shipments which move by rail or water lines. These motor-carrier operations are the subject of another proceeding. Applicant also holds itself out to the general public to procure, furnish, or arrange for the transportation of household goods and office equipment by rail, water, or motor carriers, and seeks authority as a broker to perform this service.

Applicant's principal arrangements for transportation involve the packing and consolidation of shipments of household goods at its warehouse for forwarding by railroad in a pool car or lift vans to final destination, or to a break-bulk point, such as Chicago. A pool car consists of several shipments which have been pooled together to form a carload shipment. Lift vans are metal van bodies equipped with a hoist arrangement for loading on railroad flat

cars. Applicant has 10 lift vans, which are also used for occasional shipments by water lines to Atlantic seaboard points. Applicant originates the majority of its consolidated shipments but receives similar shipments from other motor carriers and pays them a commission for furnishing this business. These consolidated shipments are hauled to the railroad station in Portland and shipped by applicant on a railroad bill of lading to a freight forwarder in Chicago, or to an affiliated member of the National Furniture Warehousemen's Association at destination. Applicant ararnges, without charge to the consignee, for its affiliate to complete delivery from the railroad station to the consignee's residence. Although entitled to collect a commission from the delivering motor carrier for furnishing this business, applicant prefers to waive this compensation in order to promote similar reciprocal transactions.

Applicant gives a receipt to the shipper which provides that it shall ship the goods as the agent of the shipper, and that it shall not be responsible for any loss or damage in transit beyond the amount which may be collected from the railroad. This receipt also provides that the goods are secondhand, that they may be released at a value of $10 per 100 pounds, and that the shipper shall be responsible for any additional railroad charges resulting from their improper classification.

Applicant charges rates covering the entire service from Portland to the railroad station at destination. These rates are published in a tariff and apply to practically all railroad points east of the Rocky Mountains. They are termed "consolidated carload" rates and are set between the lower level of carload rates and the higher level of less-than-carload rates, as charged by the railroads. The shipper saves the difference between applicant's rates and the higher lessthan-carload rates, which he would pay for an individual shipment by railroad. Applicant obtains the benefit of the lower carload rates by consolidating several shipments into a carload. The railroads do not participate in applicant's tariff, and applicant's relation to them is that of a shipper.

Applicant's arrangements for transportation by other motor carriers have been infrequent and confined to carriers operating on the Pacific coast. These arrangements usually involve physical transportation by applicant between its warehouse and the shipper's residence but occasionally the entire movement is conducted by other motor carriers. This has happened when applicant's facilities were otherwise engaged, or when the size of the shipment offered, or the distance involved, made the trip unattractive to it, and particularly if such shipment would provide a return load for another available motor carrier.