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APPENDIX

Pertinent facts

Applicant is a former employee of an agent for Allied Van Lines, Inc., and is thoroughly familiar with the transportation of household goods. She proposes to conduct brokerage operations arranging for the transportation of household goods, aiming her service primarily for the benefit of the small c.o.d. shipper. Besides arranging for the appropriate household goods carrier, applicant asserts that she will assist shippers by (1) aiding in packing and loading, (2) making estimates of the cost of the transportation service, (3) tracing shipments to ensure that agreed delivery dates are adhered to, (4) making sure that claims are promptly paid, and (5) making post shipment audits of carriers' invoices. As compensation for her brokerage service, applicant would receive 10 percent of the cost of the move from the carriers. Although applicant did not specify any carriers with which she anticipates a working arrangement, she maintains that there are an ample number of household goods carriers operating in New York whose services she can solicit.

Two shippers support the application. American Express Company's traffic manager testified that approximately 250 employees of American Express moved their residences in 1973. American Express paid for these moves and arranged for transportation of furniture and personal effects. The witness stated that his office was understaffed and lacked the time and expertise necessary to select the needed carriers. He believed that the brokerage service offered by applicant would be of invaluable assistance in arranging for the transportation required by American Express. The witness had sought applicant's advice in the past and he felt that she can help alleviate some of the problems he has encountered.

Scholes Management Systems International is an executive recruitment and management consulting firm. As part of its function it helps arrange for the transportation of executives of companies that use its services. It gave an example of one client corporation that intended to move its offices and the families of 175 of its employees. Scholes was consulted about the logistics involved in such a move. It stated that applicant's brokerage service would be utilized to assist in arranging transportation and other related matters.

Protestants are all common carriers of household goods operating throughout the continental United States and/or Alaska. None of them expressed any interest in using applicant's service.

124 M.C.C.

No. MC-133327 (SUB-No. 2)

MELBURN TRUCK LINES (TORONTO) CO., LTD.,

COMMON CARRIER APPLICATION

Decided December 1, 1975

1. On reconsideration, findings in prior decision and order (not printed) decided

February 22, 1973, and prior order (not printed) decided June 29, 1973, modified in part. Proposed operations by applicant, as a common carrier by motor vehicle, over irregular routes, of truckload shipments of imported bananas from named United States seaports to ports of entry on the international boundary line between the United States and Canada located in New York, found shown to be part of a continuous through movement in foreign commerce between a place in one foreign country and a place in another foreign country under the definition in section 203(a)(11) and such transportation, therefore, found not shown to be interstate or foreign commerce subject to economic regulation under part II of

the Interstate Commerce Act. Application in that respect dismissed. 2. No. MC-129815 (Sub-No. 1), Keith Brinkerhoff Contract Carrier Application (not

printed), and other cases of similar import, to the extent inconsistent with the

discussion and decision reached herein, overruled. 3. Public convenience and necessity found not shown to require operation by

applicant as a common carrier by motor vehicle, over irregular routes, of bananas from nine named cities to ports of entry on the international boundary line between the United States and Canada located in New York. Application in such respects denied.

William K. Ince and James D. Williams, Jr., for applicant.

Herbert M. Canter, William J. Hirsch, Robert D. Gunderman, Raymond A. Richards, and S. Michael Richards for protestants.

REPORT OF THE COMMISSION ON RECONSIDERATION

DIVISION I, ACTING AS AN APPELLATE DIVISION, COMMISSIONERS

MURPHY, GRESHAM, AND O'NEAL

MURPHY, Commissioner:

By application filed May 6, 1970, Melburn Truck Lines (Toronto) Co., Ltd., of Toronto, Ontario, Canada, seeks a certificate of public convenience and necessity authorizing operation, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of bananas from Wilmington, Del., Miami and

Tampa, Fla., Baltimore, Md., Fall River, Mass., Newark and Weehawken, N.J., New York, N.Y., and Charleston, S.C., to ports of entry on the international boundary line between the United States and Canada located in New York. Fruitbelt Produce Trucking Limited, Key Express, Inc., and Zavitz Brothers, Ltd., three Canadian-based motor common carriers, oppose the granting of the application.

The matter was initially assigned to Review Board Number 3 for disposition under the modified procedure. In its report and order entered February 2, 1971, the board concluded that the evidence of record did not set forth sufficient, precise operating information regarding billing and other essentials for it to determine whether the exemption in section 203(a)(11) of the Interstate Commerce Act applied to applicant's operation. Therefore, the board found that specific operating authority is required in order for applicant to provide the involved service. The board then granted authority for the transportation of bananas, in foreign commerce only, from Wilmington, Del., Miami and Tampa, Fla., Fall River, Mass., and Charleston, S.C., to ports of entry on the international boundary between the United States and Canada in New York.

In view of the board's statement that the available information from the applicant and shippers did not establish the applicability of the noted exemption, applicant on April 9, 1971, filed a petition to reopen the proceeding to present new evidence in the form of

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'The "exemption" under consideration in this proceeding is sometimes referred to as the “land bridge" exemption, and results from the definition of foreign commerce set forth in section 203(a)(11) of the act which does not subject carriers engaged in certain foreign commerce transportation to the economic regulation provisions of part II of the act. Because the scope of this Commission's jurisdiction under part II of the act over foreign commerce transportation is the main issue under consideration in this proceeding, the entire text of the statutory definition of foreign commerce will be set forth here.

Section 203(a)(11) of the act reads:

The term “foreign commerce" means commerce, whether such commerce moves wholly by motor vehicle or partly by motor vehicle and partly by rail, express, or water, (A) between any place in the United States and any place in a foreign country, or between places in the United States through a foreign country; or (B) between any place in the United States and any place in a Territory or possession of the United States insofar as such transportation takes place within the United States. The term “foreign commerce" also includes transportation between places in a foreign country, or between a place in one foreign country and a place in another foreign country, insofar as such transportation takes place within the United States, but only for purposes of the application, to carriers engaged in such transportation, of the following provisions of this part: Section 215 (which relates to insurance for the protection of the public), section 221 (which relates to designation of an agent for service of process), and those provisions of section 204 which relate to qualifications and maximum hours of service of employees and safety of operation and equipment.

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additional verified statements by various shippers of bananas. On July 28, 1971, Appellate Division 1 reopened the proceeding for oral hearing. At the hearing applicant stated that the evidence it intended to present would be limited to the “exemption” issue, and that it had no intention of offering any evidence on the matter of a need for the considered service. The Administrative Law Judge? reminded applicant that the hearing was not restricted to evidence bearing on the "exemption" issue alone, and that probative

, evidence could be offered by applicant, if desired, concerning a need for the service. Applicant, however, chose to limit the scope of its presentation. In his report the Administrative Law Judge, just as the review board before him, concluded (for reasons to be more fully discussed later in this report) that applicant's activities were not within the scope of the exemption provided by section 203(a)(11).

The Administrative Law Judge went on to consider certain verified statements of supporting shippers which were submitted at an earlier stage of the proceeding, but found them to be inadequate as far as supplying essential particulars which could be regarded as a basis for justifying a grant of authority. He found insufficient detail concerning estimated or actual traffic volumes, frequency of movements, specific points in Canada to which the traffic has moved or will be expected to move in the future, and the extent to which existing motor carrier service had been tried and found unsatisfactory. The Administrative Law Judge concluded that applicant had not sustained its burden of proof to justify a grant of any authority, and he recommended that the application be denied in its entirety.

Applicant filed exceptions to the report and recommended order, and protestants replied. By decision and order Review Board No. 3, on February 22, 1973, affirmed and adopted the findings and recommendation of the Administrative Law Judge. Thereafter applicant filed a petition for reconsideration in which it continued to assert that its operations were included within the stated exemption of section 203(a)(11). Applicant's petition was denied by

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'Al the time of the hearing the title was Hearing Examiner.

The Administrative Law Judge indicated that to meet the criteria of section 203(a)(11) a shipload of bananas must be preconsigned prior to the time that the ship carrying the bananas docks at a United States pori. He stated: “To be preconsigned, the individual boxes of bananas must be designated to a specific consignee." However, the Administrative Law Judge subsequently equated preconsignment with "pre sold" when he indicated that most of the traffic involved here was preconsigned, since shippers generally sell most of the bananas before the ships dock

an order of Appellate Division 1, on June 29, 1973. However, the restatement of the facts which appeared in the Appellate Division's order denying applicant's petition prompted protestant Zavitz to file a petition for reconsideration. Upon consideration of the record, protestant's petition and applicant's reply thereto, and for good cause shown, Division 1, Acting as an Appellate Division, by order entered January 28, 1974, reopened this proceeding for reconsideration on the present record.

The evidence, the review board's report, the report and recommended order of the Administrative Law Judge, the decision and order, previous orders by Appellate Division 1, and all pleadings filed herein by the parties have been considered. In order to bring this proceeding into proper perspective and to establish the continuity of the issues involved, significant facts, contentions of the parties at various stages of the proceeding, and appropriate intermediate conclusions of law will be restated throughout this report.

THE APPLICANT

Applicant is a Canadian-based motor common carrier engaged in the transportation of exempt commodities between points in the United States, on the one hand, and, on the other, points in Ontario, Canada. It holds no permanent operating authority from this Commission. Applicant's past operations have included the. movement of bananas under color of right from ports on the east coast of the United States to points in Ontario. Applicant estimates that it transports from 600 to 800 truckloads of bananas annually from the nine ports involved herein to points in Ontario. It applied for the authority sought herein after a Commission representative examined applicant's records and suggested that authority from this Commission was required for the transportation in question. For a short period of time applicant operated under temporary authority granted by this Commission, but such temporary authority has expired.

At the time it applied for the authority sought herein, and continuously throughout the proceeding, applicant contends that the involved transportation is not subject to economic regulation by this Commission. Its operations have been performed in the belief that the exemption from economic regulation resulting from the

'The order found that most of the bananas involved in this proceeding were preconsigned, and, therefore, their transportation was exempt.

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