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It is customary to allow applicant 20 percent of the total charges on a shipment which it originates and transports to its warehouse for delivery to a road-haul motor carrier. In instances where applicant performs no actual transportation, it is entitled by custom to 10 percent of the total charges for furnishing the lead or prospect, and to an additional 5 percent if it loads the road-haul carrier's truck at the shipper's residence. Although thus entitled to these commissions, applicant has generally waived them in order to promote reciprocal dealings with other motor carriers. Applicant anticipates that future demands for improved service will require closer cooperation between household-goods carriers. However, applicant has made no definite arrangements to solicit business for other motor carriers.
A brokerage license is required when the transportation service furnished is subject to the act, and when compensation is charged for the brokerage service. Applicant's arrangements for transportation by rail and water lines do not require a brokerage license, as that transportation is not subject to the act. The transportation to the rail or water line is performed by applicant as a motor carrier. Applicant's arrangements with affiliated motor carriers to complete delivery at eastern destinations are reciprocal and involve no compensation. In its arrangements with other motor carriers, applicant usually participates in the physical transportation, and even though it performs only the pick-up or delivery service, its operation appears to be that of a motor carrier under the act.
It is clear that the vast majority of applicant's operations do not require a brokerage license. The arrangements for transportation by other motor carriers under which applicant performs no part of the physical movement have generally been reciprocal and have not involved the necessary element of compensation. The balance of such transactions, wherein applicant received compensation, constitute its only brokerage operations. These brokerage operations have been very infrequent and, while applicant anticipates that they will increase in the future, it has made no definite arrangements to promote them. There is no adequate showing that a public demand exists for such operations, or that they will be consistent with the public interest or the policy declared in the act. In view of this conclusion, it is unnecessary to consider applicant's fitness and ability.
We find that applicant's operations, as above described, are in part those of a broker of transportation by motor vehicle as defined in the act, but that the granting of a license to perform such service has not been shown to be consistent with the public interest and the policy declared in section 202 (a) of the act; and that the application should be denied.
An appropriate order will be entered.
Submitted November 29, 1937.
Decided October 6, 1938
Operation by applicant as a broker of transportation by motor vehicle, of house
hold goods, between Dallas, Tex., and points in the United States, not shown to tbe consistent with the public interest and with the policy de clared in section 202 (a) of the Motor Carrier Act, 1935. License denied. Alto B. Cervin for applicant.
Herbert L. Smith, Reagan Sayers, and Carl L. Phinney for protestants.
REPORT OF THE COMMISSION
Exceptions were filed by applicant to the order recommended by the examiner to whom this matter was referred, and protestant rail carriers replied.
By application filed March 20, 1936, M. W. Kitchner, of Dallas, Tex., doing business as Associated Van Lines, seeks a license authorizing operation as a broker of transportation of household goods by motor vehicle, in interstate or foreign commerce, between Dallas and points in the United States. The Railway General Managers' Association of Texas and numerous motor carriers opposed the application.
Applicant has been operating as Associated Van Lines since March 1934 and has been engaged in the same or a similar business for approximately 12 years. He did not seasonably file his application and, therefore, his operation as a broker since February 12, 1936, has been in contravention of the Motor Carrier Act, 1935.
Applicant has office space with one A. C. Vaughn, doing business as Busy Bee Transfer & Storage Company, who operates as a common carrier of household goods. Applicant pays Vaughn rent for his office. He obtains business through personal solicitation, advertising in Dallas newspapers and in the telephone directory, correspondence, and other methods. When applicant is absent from his office, the owner or an employee of the Busy Bee Transportation & Storage Company takes his telephone calls. No other offices are maintained by applicant, but he appears to have warehouse and motor-carrier connections in other States.
The arrangement by applicant for the transportation of household goods is preceded by a written contract with the shipper. This provides, in substance, that applicant is to furnish transportation on or about a certain date, for a specified quantity of household goods, from and to certain named points, and in consideration of a specified sum.
Applicant's arrangements for the transportation of household goods are made principally with five motor carriers. Among such carriers is the aforesaid Vaughn, who receives from 50 to 60 percent of the business secured by applicant. Another motor carrier receives from 15 to 20 percent thereof, and the remainder is distributed among the other three carriers. After a contract is entered into by a shipper and by applicant, the latter arranges with a motor carrier, subject to its acceptance, for the transportation of the household goods. The carrier pays applicant 20 percent of the freight charges, based on the rate shown in its tariff on file with us. The carrier which transports the household goods generally issues its own bill of lading and collects the amount specified in the contract between the shipper and applicant. This amount sometimes exceeds the charges based on the rate published in the carrier's tariff. Applicant testified that he does not always charge the shipper more than the published tariff rate, and that when he does so the excess represents actual extra expense incurred by him in procuring the services of a motor carrier located in another city.
Representatives of carriers who have handled household goods for applicant testified that they cannot afford to employ solicitors, that applicant's services are convenient to them in that respect, and that he secures a number of small shipments destined to points in the same direction, making it possible for them to consolidate such shipments in one load, with profitable operating results. There is some evidence that applicant secured return loads for the carriers and that, through the movement of several small shipments in one truck, the shippers may have obtained better service.
The traffic secured by applicant has moved principally between Dallas and other points in Texas, on the one hand, and points in California, Indiana, Illinois, Kentucky, Louisiana, Mississippi, Missouri, Kansas, Oklahoma, North Carolina, New York, and New Jersey, on the other. To a lesser extent, he has secured shipments between points in these States not having their origin or destination in Texas. Applicant offered in evidence copies of the contracts hereinbefore described. Many of them are incomplete as to terms, and over half of them do not indicate that they were negotiated by applicant, since they are signed by other persons or bear no signature.
It appears that applicant's service has, to some extent, benefited the carriers for whom he secured business, and might continue to be beneficial to them in some respects. However, there are other circumstances of record which, in our opinion, outweigh any such possible benefits. It has been observed that applicant has negotiated traffic principally for the one carrier with whom he shares office space. This close connection with the carrier and the fact that the carrier's employees receive telephone calls for applicant which in all probability relate to his business cast doubt upon applicant's ability to exercise an independent and unrestrained selection of carriers in the public interest. No shippers testified in support of the application, and it is doubtful if any benefits would accrue to shippers commensurate with the extra charges exacted from them (allegedly for so-called extra expense), which in one instance amounted to $10 above the carrier's charge of $60.
We find that applicant has not shown that the proposed operation as a broker is or will be consistent with the public interest or the policy declared in section 202 (a) of the act, and that the application should be denied. An appropriate order will be entered.
9 M. C. O.
Ex PARTE No. MC-22
NEW ENGLAND MOTOR CARRIER RATES
Decided October 8, 1938
Bases of rates of common carriers of property by motor vehicle prescribed
in previous reports, 8 M. C. C. 287, and 8 M. C. C. 549, between points in southeastern New York and northeastern New Jersey, on the one hand, and points in Connecticut, Massachusetts, and Rhode Island, on the other, modified on further consideration.
SUPPLEMENTAL REPORT OF THE COMMISSION
DIVISION 5, COMMISSIONERS EASTMAN, LEE, AND ROGERS BY DIVISION 5:
In our previous reports herein, 8 M. C. C. 287, as subsequently modified on further consideration, 8 M. C. C. 549, we prescribed, among other things, bases of minimum reasonable class and commodity rates, with certain exceptions, for the transportation of property by common carriers by motor vehicle between points in southeastern New York and northeastern New Jersey, on the one hand, and points in Connecticut, Massachusetts, and Rhode Island, on the other. Rates between these points come within the purview of sections 1 and 2 of the New England Motor Rate Conference, hereinafter called the Conference. Since our original report, petitions have been filed by the Conference, H. C. Roulston, Incorporated, and Chas. H. Phillips Chemical Company for modification of the order with respect to rates heretofore prescribed between these points. Cilco Terminal Company, Incorporated, of Bridgeport, Conn., replied to one of the petitions of the Conference.
As we indicated in our original report, we were apprehensive that some carriers who did not participate in the deliberations of the Conference would be required, under our order, to maintain class rates on their traffic while carriers who submitted their rates to the Conference would enjoy commodity rates. The majority of the modifications sought in the petitions are for the purpose of permitting carriers who were not members of the Conference to maintain the commodity rates they formerly published. Other modifications are sought to permit the maintenance of the same commodity rates to and from intermediate as well as more distant points, to correct errors in tariff compilation, to place competing points on a parity of rates,