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Chicago to the railhead at Cincinnati at which point it would place its trailer on a flatcar for movement to Norfolk. The use of both the Norfolk and Western and B & O/C & O Railroads is contemplated.
Protestant Hennis conducts extensive operations, primarily east of the Mississippi River, over a system of regular and irregular routes, and, assertedly, holds appropriate authority to provide all of the proposed service. Hennis operates more than 3,000 pieces of equipment, including 557 40-foot high cube volume vans, and, as pertinent, maintains terminals at Chicago, St. Louis. and at five points in Virginia. Protestant contends that, from the standpoint of adequate and efficient service, freight forwarders are unable to meet the needs of the general shipping public and that it is not the duty of the Commission to correct the inefficiency of freight forwarder operations by authorizing an unwarranted competitive common carrier service where there is available to the general shipping public adequate service such as that held out by protestant. Protestant emphasizes that the supporting forwarders solicit the same traffic it does and are direct competitors. It argues that an essential difference in their services, however, is that the freight forwarder offers the shipping public the concession of lower rates and charges than those available under motor common carriers tariffs. Protestant concludes that applicant has failed to prove existing services to be inadequate and that the Commission's authorization of a competing service would serve to discourage, rather than encourage, the efforts of existing carriers to put forth maximum efforts to render the best possible service.
DISCUSSION AND CONCLUSIONS
Since freight forwarders assume responsibility for the movement of shipments tendered to them as common carriers, must rely on other carriers for the performance for the performance of required underlying transportation services, and cannot be parties to joint rates, they are wholly dependent on other carriers to which they tender consolidated shipments for line-haul transportation between their terminals. Therefore, freight forwarders have traditionally and
Protestant has devoted much of its efforts to a generalized attack upon the status of freight forwarders as common carriers under the Interstate Commerce Act, and their role in the transportation system. We comprehend the issues in this proceeding to be much more limited, and we do not intend to justify the existence of the freight forwarding industry. The role of that industry was recently exhaustively considered in Investigation Into Stams of Freight Forwarders, 339 L.C.C. 711 (1971). Suffice it to say that freight forwarders are recognized as common carriers by the act. See section 402(a)(5) of the act.
appropriately supported the applications of motor common carriers for new or improved operating rights. Armellini Express Lines, Inc., Ext.-F. F. Traffic, 113 M.C.C. 603, 613 (1971), affirmed Alterman Transport Lines, Inc. v. United States, 361 F. Supp. 664, 667 (1973), and Central Forwarding, Inc., Ext.-Household Goods, 107 M.C.C. 706 (1968). The supporting freight forwarders herein have amply proven a need for the availability of a carrier to transport their freight from St. Louis and Chicago to Norfolk, from Richmond to Lynchburg to Chicago, and from Lynchburg to St. Louis. Rail service, the only service now available to the forwarders from and to the considered points, has been shown to be too slow and inflexible to meet their needs; and, in these circumstances, we can reach no other conclusion than that the advantages inherent in the services. proposed by applicant are of considerable significance in the factual context of this case. Schaffer Transp. Co. v. U.S., 355 U.S. 83 (1957), and Petroleum Carrier Corp. Extension-Clay Slurry, 83 M.C.C. 379 (1960). The sole protestant here in assertedly holds authority enabling it to provide all of the required services; but protestant amply makes it clear, and we would be remiss in failing to note, that the services it holds out are competitive with those held out by the supporting freight forwarders. Nilson Extension-South Carolina, 95 M.C.C. 326 (1964). Indeed, in its declarations that it is willing and able to provide the services required by the shipping public, protestant refers not to the freight forwarders who would tender shipments to motor common carriers but rather to those members of the shipping public who would tender their shipments to freight forwarders. All things considered, we conclude it to be eminently clear that protestant has no intention of negotiating with freight. forwarders the FAK rates or, where appropriate, so-called "Section 409 agreements" required by freight forwarders to move their traffic and that protestant has thus amply demonstrated a willingness to forego the considered freight forwarder traffic. Compare Kroblin Refrigerated Xpress, Inc., Ext.-FF. Traf., 123 M.C.C. 831, 842 (1975) and Curtis, Inc., Extension-Acme to Denver, 121 M.C.C. 15, 23 (1975).
Regarding the commodities authorized to be transported herein, we must note that where general-commodity authority is sought, each of the five usual exceptions (household goods as defined by the
'Section 409 of the act generally permits forwarders and motor carriers subject to part II of the act to enter into contracts. not subject to tariff publication, for assembly and distribution services. and for transportation between concentration and break-bulk points not exceeding 450 miles in the case of truckload lots and without limitation in the case of LTL. traffic.
Commission, articles of unusual value, classes A and B explosives, commodities in bulk, and commodities requiring special equipment) is normally imposed unless a specific need has been demonstrated for such transportation. In the instant proceeding, the supporting forwarders, in referring to the considered commodities simply as general freight or as general commodities, have demonstrated no such specific need and, accordingly, the said five exceptions will be imposed in any grant of authority which may be made herein. Compare Comet Messenger & Deliv. Serv., Inc., Com. Car. Applic., 111 M.C.C. 13 (1970), and Watkins Motor Lines, Inc., Exi.-General Commodities, 113 M.C.C. 658 (1971).
Another matter requires consideration herein, viz, the proposed provision by applicant of joint intermodal TOFC service. As indicated above, two forwarders support applicant for motor carrier authority from Cincinnati to Norfolk and from Richmond to Cincinnati so as to enable applicant, on occasion, to make use of available rail TOFC service from and to the said points. The forwarders supporting this operation acknowledge that they have no traffic originating at or destined to Cincinnati, their actual interest being in the movement of traffic from St. Louis and Chicago to Norfolk and from Richmond to Chicago. (By requesting that applicant be granted authority to serve Cincinnati, the parties tacitly acknowledge their familiarity with the requirement that carriers participating in joint intermodal TOFC service interchange traffic only at common points of service. See 49 CFR 1090.4(d).) Unfortunately, applicant's proposal presents serious problems. Initially, we note that applicant is seeking motor carrier authority which it would use solely as “sham" or "straw" authority for which, when it so desired, it would substitute rail TOFC service. In other words, applicant would have us issue it authority pursuant to which it has no intention of providing service. This we cannot do.' See section 216(b) of the act and Braswell Motor Fri. Lines, Inc., Investigation. 118 M.C.C. 392 (1973). Compare also, Substituted Service, supra, at pages 364-365. Moreover, we note that, even were we to grant the sought "straw" operating authority, applicant would still not be able to render the joint intermodal service it seeks to provide, for it has failed to apply for the requisite complementary motor carrier authority from St. Louis to Cincinnati, from Chicago
As pertinent, ceruticates of public convenience and necessity require "that the holder thereof shall render reasonable conunuous and adequate service to the public in pursuance of the juthority herein granted," and provide the tailure so to do shall consutute sufficient grounds for suspension, change or revocauon
to Cincinnati, and from Cincinnati to Chicago. Finally, we must point out that as TOFC plan I contemplates the substitution of rail service for an alternative all-highway motor carrier service, applicant's proposed operations, which involve an end-to-end motor-rail or rail-motor service do not fall within the ambit of such plan. It appears to us that the TOFC service proposed by applicant is, in fact, a plan V operation for the performance of which applicant
, must hold appropriate motor carrier operating authority from St. Louis and Chicago to Cincinnati and from Cincinnati to Chicago. Again, applicant has failed to apply for such authority herein.
One final matter requires consideration. As noted above, it appears that applicant may be affiliated with one or more of the supporting freight forwarders. This Commission has found on numerous occasions that the common control of a motor common carrier and its supporting firm is a type of relationship contrary to the public interest and a proper reason for denying an application. (See, for examples, Alter Trucking and Terminal Corporation Extension, 107 M.C.C. 644 (1967), affirmed Alter Trucking and Terminal Corp. v. United States, 299 F. Supp. 819 (S.D. Towa (1969), and Cousins, Inc., Common Carrier Application, 102 M.C.C. 481 (1966).) There are two forms by which discrimination or preference may arise when there is common control between an applicant and a supporting shipper. First, the assured traffic which an applicant can obtain from an affiliate could afford it a competitive advantage over other carriers. Second, a commonly controlled carrier would be able to favor its affiliate to the detriment of other shippers, Cousins, supra. Exceptions to this general policy have been made, however, where it has been shown that there is no substantial opportunity to engage in discriminatory practices despite the relationship. Super Speed Transport, Inc., Common Carrier Application, 96 M.C.C. 335 (1964), Federal Transfer Co., Inc., Extension-Seattle, Wash., 111 M.C.C. 559 (1970), and SES Corporation Common Carrier Application, 117 M.C.C. 93 (1972). For example, authority has been granted where shippers other than the affiliated shipper support the application in full awareness of the relationship and where it appears that the importance of the other shippers' traffic, in contrast with that of the affiliate, is sufficient to overcome a natural tendency in favor of discrimination. Super Speed, supra, and Sullivan Lines, Inc., Extension-Far West, 118 M.C.C. 801 (1973). Inasmuch as applicant has failed to submit specifics regarding its affiliation with one or more of the supporting freight forwarders, we are unable to determine the extent, if any, to which a grant of authority herein would enable applicant to engage in discriminatory practices contrary to the public interest. Moreover, we are unable to determine whether and, if so, to what extent, applicant or any person or carrier affiliated with applicant has violated or is in violation of any of the provisions of section 411 of the act relative to common control or management of common carriers and freight forwarders. We are thus holding open the instant proceeding for a period of 90 days, within which time applicant should submit evidence bearing on the nature and extent of its affiliation with the supporting firms as well as with other persons or carriers. Subsequent to the submission by applicant of such evidence, further consideration will be given the said issues in accordance with applicable statutory criteria and pertinent principles as enunciated in Commission case law. In the event applicant fails to submit the required evidence within the time allotted, the application will stand denied.
We find that the present and future public convenience and necessity require operation by applicant, in interstate or foreign commerce, as a common carrier by motor vehicle, over irregular routes, of general commodities (except those of unusual value, classes A and B explosives, house hold goods as defined by the Commission, commodities in bulk, and those requiring special equipment) which are at the time moving on bills of lading of freight forwarders as defined in section 402(a)(5) of the Interstate Commerce Act, from St. Louis, Mo., and Chicago, Ill., to Norfolk, Va., from Richmond and Lynchburg, Va., to Chicago, III., and from Lynchburg, Va., to St. Louis, Mo., 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 in all other respects should be denied.
An order will be entered holding this proceeding open for 90 days from the date of service thereof in order that applicant shall submit evidence bearing on the nature and extent of its affiliation with other persons or carriers, failing which the application shall stand denied.