In an initial decision served July 16, 1974, the Administrative Law Judge concluded that applicant's proposed service would be of benefit to the public; that the service offered was not duplicative of the service of the protestants nor of any other firm; and that a grant of the proposed authority would be consistent with the public interest and the national transportation policy. All of the protestants, except Imperial, filed exceptions to the initial decision and applicant filed a reply. By report and order decided January 24, 1975, the Commission, Review Board Number 2, denied the application. The board concluded that the evidence in support of the application had not been presented in accordance with the requirements set forth in Schaeffer Extension-New York City, 106 M.C.C. 100 (1967), and was neither probative nor convincing, that the method of compensation applicant intends to utilize would result in the payment of rebates in violation of the Interstate Commerce Act and the Commission's Broker Regulations (49 CFR 1045.9); that applicant's service would interfere with the shipper-household goods carrier relationship to the detriment of the public; and that the utilization of applicant's service would unnecessarily increase the costs of the transportation of household goods. Upon consideration of applicant's petition for reconsideration, a petition to file a statement in support of applicant's petition, embracing a tendered statement, filed by the United States Department of Transportation, and the replies filed by all of the exceptants, we allowed the Department of Transportation to intervene as a party to this proceeding, accepted its proffered statement for filing, and reopened the proceeding for reconsideration on the present record by order of July 11, 1975.

The evidence, the initial decision of the Administrative Law Judge, the report and order of the review board, and the pleadings have been considered. We find the Administrative Law Judge's statement of facts in his initial decision and the review board's statement of facts in its report to be correct in all material respects and we adopt such statements as our own. Pertinent facts have been set forth in the appendix hereto.

POSITIONS OF THE PARTIES

Applicant argues that her services will benefit the small c.o.d. shippers of household goods by providing them with vital information about the right carrier to choose and by giving helpful advice about other aspects of moving. She denied that her method of

remuneration would constitute a rebate to shippers and she further contends that her service would aid rather than hinder the shippercarrier relationship.

DOT focuses on the need for applicant's service and argues that the Commission should not independently assess such need, but should instead authorize applicant's service and allow the law of the marketplace to determine if there is a demand for her service. DOT also asserts that Ms. McEvoy's operations would be of great benefit to small shippers using the services of household goods carriers. The protestants generally argue that the findings of the review board are correct and should be affirmed. They also contend that the arguments set forth in DOT's statement are completely without merit.

DISCUSSION AND CONCLUSIONS

The last time the Commission considered an application to operate as a broker of household goods transportation was in 1961. In Leonard Broker Application, 84 M.C.C. 727, division 1 denied the application finding that applicant had failed to establish that the proposed service would be consistent with the public interest and the national transporation policy. We believe that the authorization of the proposed household goods broker service at this time is likewise not in the public interest. Although we agree with the conclusions reached by the review board in this proceeding, we nevertheless wish to elaborate more extensively on certain aspects of those conclusions to explain more fully the basis for our decision. The Commission has long been aware of the many difficulties encountered by members of the moving public in dealing with household goods carriers. See Practices of Motor Common Carriers of Household Goods, 111 M.C.C. 427 (1970). In an effort to improve the performance of such carriers and to protect the public from carrier abuses, this Commission has promulgated extensive household goods regulations (Transportation of House hold Goods in Interstate or Foreign Commerce, 49 CFR 1056.1 et seq.). These regulations include a number of measures designed specifically to improve the quality of service the small c.o.d. shipper will receive from household goods carriers. The regulations, for example, (1) require household goods carriers to meet certain standards of fairness and openness when weighing a shipment of household goods (49 CFR 1056.6), (2) allow shippers to defer a portion of payment for a shipment for 15 days if the actual charges exceed by more than 10

percent the amount of the estimated charges (49 CFR 1056.8), (3). compel household goods carriers to transport shipments with reasonable dispatch and to notify shippers of delays in pickups and deliveries (49 CFR 1056.12), and (4) require the carrier to acknowledge a claim for loss or damage within a specified time, and pay, decline, or make a firm compromise settlement of such a claim within 120 days after receipt, and, failing to do so, inform the shipper of the status of the claim and the reason for the delay every 30 days thereafter (49 CFR 1056.17). The most important regulation as it relates to this proceeding is 49 CFR 1056.7, which requires household goods carriers to provide shippers with copies of the Commission publications BOp 103 Summary of Information for Shippers of Household Goods and Public Advisory No. 4 Lost or Damaged Household Goods, as well as a copy of the carrier's last annual performance report. BOp 103 is a comprehensive guide for the moving public and includes information on weighing shipments, bills of lading, vehicle-load manifests, how to reduce moving costs, packing tips, the liability of carriers, how to file claims, and information on many other aspects of moving that are of help to consumers. Public Advisory No. 4 contains additional information for shippers of household goods regarding avoidance of and recovery for loss and damage of their possessions. These two publications have proved to be of invaluable aid to the inexperienced shipper trying to make his move to a new residence as economical and problem free as possible.

Applicant purports to be able to aid small c.o.d. shippers by selecting the best or most appropriate household goods. carrier and by otherwise assisting shippers. She proposes to help shippers pack, make cost estimates, trace shipments to assure agreed delivery dates are met, make sure claims are promptly paid, and audit carrier invoices after the shipment is delivered. We believe, however, that, at best, applicant's service will be of negligible benefit to shippers and, at worst, may seriously jeopardize the effectiveness of the household goods regulations. As far as applicant's pure broker function is concerned, i.e., the selection of a carrier, it is doubtful that she can add much information to that already contained in the carriers' annual performance reports. Shippers can see for themselves which carriers have the best record for responding to consumers and can make the appropriate choice based on this information. With no carrier support for the application and no specific mention made of any carriers she would represent, we must assume that applicant would not have free hand in selecting carriers she thought best but would be limited to those

unspecified carriers willing to make use of her service and pay her the commission she would charge. Applicant's nonbrokerage advice would be largely repetitive of the information contained in BOP 103 and Public Advisory No. 4 and the information provided by household goods carriers pursuant to our household goods regulations. To the extent her information is contradictory or less complete, shippers may be either confused or poorly informed. Some of applicant's proposed services, such as tracing shipments to ensure prompt delivery and ensuring that claims are paid are based on illusory promises. How she will compel household goods carriers to deliver shipments on time and pay claims expeditiously is left to the imagination. The Commission has been required, at times, to resort to the issuance of cease and desist orders and the suspension of carriers' authority in order to compel adherence to our household goods regulations. We are unaware of any similar leverage that applicant may possess. In short, we believe that applicant's service will be of little or no benefit to shippers, but will -create additional problems by adding a “middle man" to the shippercarrier relationship. This would add to any existing confusion, not dissipate it. Were shippers to use the type service applicant proposed they might very well find themselves using carriers with poor performance records and receiving contradictory, inaccurate, or inadequate information about how to plan their move. Our approval of such a service would be contrary to the public interest and we will, therefore, deny the application.

In addition, there are other deficiencies in the application and applicant's proposal that warrant discussion: (1) Applicant avers that she would direct her operations primarily at individual c.o.d. shippers; yet she introduced no supporting testimony from such shippers at the hearing, thus calling into question whether there is any public demand for her service. (2) As a broker, applicant would not be subject to the house hold goods regulations. Thus, the Commission would have limited recourse against her if she gave shippers inaccurate or false information about moving their possessions. (3) There is also a possibility that applicant would arrange for transportation by general-commodities carriers whose certificates are not restricted against the transportation of household goods. The likelihood of this occurrence is great considering the absence of any household goods carrier support for the application. Carriers transporting a c.o.d. consumer's goods as general commodities generally have lower liability for damaged

shipments than household goods carriers. The door would be left wide open to potential abuses of the shipping public.

One final comment is necessary in response to DOT's argument that we allow the law of the marketplace to determine demand. Stated differently, DOT is simply advocating the deregulation of brokers of transportation. Whatever the possible merits of such a proposal, the Commission is obligated to follow the requirements of section 211(b) of the Interstate Commerce Act and issue broker licenses only if it is found that the applicant is fit, willing, and able to perform the service and to conform to the Commission's rules and regulations, and if the proposed service is consistent with the public interest and the national transportation policy. A license cannot be issued unless the service proposed will contribute something of value to carriers or the public. Collette Travel Service Inc. v. United States, 263 F. Supp. 302 (1966). The DOT proposal more appropriately belongs in Ex Parte No. MC-96, Entry Control of Brokers, a proceeding instituted to investigate any need for legislation to ease entry requirements for brokers.

FINDINGS

On reconsideration, we find that applicant has failed to establish that the proposed operation will be consistent with the public interest and the national transportation policy; that this decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969; and that the application should be denied. An appropriate order will be entered.

124 M.C.C.