INTERSTATE COMMERCE COMMISSION

REPORTS

No. FF-202 (SUB-No. 1)

ACE FORWARDERS, INC., FREIGHT FORWARDER APPLICATION

Decided April 9, 1951

Upon reconsideration, findings in prior report, 265 I. C. C. 709, reversed, and service by applicant as a freight forwarder of commodities generally from New York, N. Y., and adjacent counties in New York and New Jersey to Pittsburgh, Pa., and adjacent counties in Pennsylvania, West Virginia, and Ohio found consistent with the public interest and the national transportation policy. Permit issued.

Appearances as shown in prior report.

REPORT OF THE COMMISSION ON RECONSIDERATION

BY THE COMMISSION:

In the prior report, 265 I. C. C. 709, division 4 found that the proposed operations of Ace Forwarders, Inc., of Pittsburgh, Pa., in the forwarding of commodities generally, in interstate commerce, from points in Bronx, Kings, New York, Queens, Richmond, Westchester, Nassau, and Suffolk Counties, N. Y., and Bergen, Hudson, Passaic, Essex, Union, Morris, Middlesex, Monmouth, and Somerset Counties, N. J., to points in Allegheny, Westmoreland, Beaver, Washington, Butler, Fayette, Lawrence, and Armstrong Counties, Pa., Preston, Marion, Wetzel, Marshall, Ohio, Monongalia, Brooke, and Hancock Counties, W. Va., and Jefferson and Belmont Counties, Ohio, would not be consistent with the public interest and the national transportation policy, and entered an order denying the application. Upon petition of applicant, we reopened the proceeding for reconsideration. The facts are set forth in the prior report and will be restated only to the extent necessary to a proper understanding of the issues.

Applicant, a new corporation, was organized for the purpose of performing the service proposed in this proceeding. If the forwarder

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permit sought is granted, it will have $9,000 with which to institute service. More capital can be obtained if needed. In the proposed operations applicant would utilize rail carriers in the movement of consolidated shipments from New York, N. Y., to Pittsburgh. At those points it would maintain terminals where consolidation and break-bulk would be effected. Applicant's president, who has had some transportation experience, would be in charge of the operation and act as manager of the Pittsburgh terminal. Another officer who has had considerable experience in distributing forwarder traffic in Pittsburgh would also participate in the management of the operation. A person having experience in the freight-forwarder business would be employed to manage the terminal at New York. Applicant proposes to provide service to meet the needs of small shippers and receivers, some of whom have not been solicited by forwarder representatives. It expects that 12 million pounds of traffic will be available for its service annually. Eleven witnesses, testifying in behalf of receivers of a wide variety of commodities in the destination territory, are of the view that additional forwarder service would be beneficial, and they would use the new service when offered. Together these consignees would have available for applicant's operation about 252,000 pounds monthly.

Protestants Pittsburgh Stores Fast Freight, Acme Fast Freight, Inc., and National Carloading Corporation contend that applicant is not ready and able properly to perform the service proposed. They assert that "The long-term effect of applicant's inexperience, if the application should be granted, must inevitably be an inefficiently con

ducted operation, submarginal in character * *" and consequently it is not ready or able to meet the requirements necessary to perform a forwarder service in the public interest. When Pittsburgh Stores started operating in 1938, there were four other forwarders in actual operation from New York to Pittsburgh. Today there are only two, namely, Pittsburgh Stores, which gives daily service by means of rail and motor carriers, and Acme (a Nation-wide forwarder), which moves three or four rail carloads weekly. At the time of the hearing National had suspended its service from New York to Pittsburgh for an indefinite period. Applicant sees no reason why it cannot be successful when there are but two competitors now operating, inasmuch as Pittsburgh Stores prospered when four forwarders were actively engaged in the same service. Freight-forwarder permits have been issued for new operations where the officers of the applicant have shown no previous forwarder experience. See Canned Goods For

285 I. C. C.

warding Corp. F. F. Application, 265 I. C. C. 572, wherein the applicant was granted a permit covering operation from the Pacific Northwest to points throughout the United States. Applicant here has one officer with many years of transportation experience, and other experienced help will be obtained. We are satisfied that applicant is ready and able to conduct this comparatively limited operation.

Protestants, in addition, fear that their services may be curtailed through loss of business to a new competitor entering the forwarder field. Pittsburgh Stores operates in the same territory which applicant seeks to serve, and from a number of New England States. The average annual tonnage of this protestant during the past 10 years is close to 14 million pounds, some of which originated at points outside the scope of this application. One partner of Pittsburgh Stores expressed the view that he thought his company could hold what business it has if this application is granted; and that the amount of tonnage available for forwarder service from New York to Pittsburgh is practically limitless, depending greatly upon the ability of the organization to attract new business by rendering adequate and satisfactory service. In contrast to the latter, another partner of Pittsburgh Stores said applicant could get enough tonnage to provide reasonably adequate service only by taking it away from protestants. Acme and National argued on brief that "it is demonstrable that of the 19,000,000 pounds of freight which now move in forwarder service from New York to Pittsburgh, 15,500,000 pounds are definitely not available to this applicant." They also said "It is therefore apparent that even if the application is granted, Ace Forwarders is not likely to obtain any share of this important segment of traffic which is so essential to the efficient operation of Pittsburgh Stores Fast Freight." The prospective inroads on protestants' business do not, therefore, appear to be serious.

Pittsburgh Stores, in 1949, consolidated and forwarded 12,481,000 pounds of property, 7,235,118 pounds of which were for account of seven department store consignees in Pittsburgh. For two of such patrons it forwarded an aggregate of 5,051,456 pounds of merchandise. This would indicate that Pittsburgh Stores, to a large extent, specializes in providing forwarder service for the movement of department store merchandise, and that, as alleged by applicant, it has catered principally to large shippers. As hereinbefore indicated, applicant proposes to provide forwarder service for small shippers and receivers, some of whom have not been solicited by representatives of existing forwarders.

On reconsideration, we find that service by applicant as a freight forwarder, in interstate commerce, of commodities generally from and to points covered by the application will be consistent with the public interest and the national transportation policy, and that applicant is ready, able, and willing properly to perform such service.

A permit and order will be issued and the order of division 4, to the extent it denied this application, will be vacated and set aside. CROSS, Commissioner, dissenting:

Nine freight forwarders now hold permits authorizing service from and to the areas covered by this application. The record shows that existing forwarder facilities are being utilized only to a limited extent. In my opinion the evidence does not warrant a finding that the authorization of additional forwarder service would be consistent with the public interest and the national transportation policy.

I am authorized to state that COMMISSIONERS PATTERSON and KNUDSON join in this expression.

285 I. C. C.

No. W-406 (SUB-No. 1)

OHIO BARGE LINE, INC., EXTENSION-PIG TIN

Submitted April 26, 1951. Decided May 16, 1951

Extension of operation by applicant as a contract carrier by water to include transportation of pig tin between ports and points it is at present authorized to serve, found to be consistent with the public interest and the national transportation policy. Third amended permit and order issued.

Thomas J. Lynch for applicant.

W. A. Kernan for interveners.

Ed White for protestants.

REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MAHAFFIE, ROGERS, AND MITCHELL BY DIVISION 4:

Exceptions to the report proposed by the examiners were filed by protestants, and applicant replied. Exceptions and requested findings not discussed in this report, nor reflected in our findings or conclusions, have been given consideration and found not justified.

By application filed April 25, 1950, under the provisions of section 309 (g) of the Interstate Commerce Act, Ohio Barge Line, Inc., of Pittsburgh, Pa., seeks a revised permit authorizing extension of its operations as a contract carrier by non-self-propelled vessels with the use of separate towing vessels to include the transportation of pig tin between ports and points it is at present authorized to serve. A hearing was held. Railroads in western trunk-line and southwestern territories oppose the application.

Applicant, a wholly owned subsidiary of the United States Steel Corporation, was organized and incorporated in 1940 for the purpose of affording transportation by water to that company and its affiliated companies for the movement of their property along the Mississippi River system and the Gulf Intracoastal Waterway. It is successor in interest to the Carnegie Illinois Steel Corporation, another subsidiary, which from 1922 to 1940 performed tug and barge transportation for the parent company and affiliates. Applicant's corporate

1 This report also embraces, for the purpose of giving effect to the determination herein, No. W-406, Ohio Barge Line, Inc., Contract Carrier Application.