Shipper's testimony.—A manufacturer of premixed road surfaces, with plants at Milroy, Newville, and Cressona, Pa., uses asphalt in the manufacture of Amiesite, a mixture of asphalt, crushed stone, and other ingredients. Until recently, all asphalt used in its plants has been transported in rail tank cars which are equipped with steam coils. The plants at Cressona and Milroy are located on rail sidings, but the one at Newville is 3 miles from the siding, and separate boiler facilities must be maintained there and a leased tank truck operated to transport the heated asphalt from the siding to the plant. Rail shipments from Baltimore require 3 to 4 days in transit, 12 to 17 hours of heating, and transportation from siding to plant. By use of applicant's service, shipments can be ordered one day and received the next at the proper temperature for immediate mixing. In addition to a saving in time by receiving the asphalt by truck, there is an estimated saving of $750 to $1,000 annually per plant, on wages, fuel, and similar items. The consignee also prefers to receive truckload quantities of 3,000 gallons, rather than in lots of 6,000 to 12,000 gallons, the capacities of rail tanks. Since it has received its supply at Newville by applicant's truck under lease to the shipper, it has disposed of the boiler facilities at the siding and no longer leases the tank truck.

The shipper has received numerous requests throughout the territory covered by this application for delivery of asphalt by heatedtank trucks, and estimates that a volume of business of not less than 10,000 to 15,000 tons per year can be developed and that a further increase in business is anticipated as the service becomes known. In view of decreased costs which would result from use of the proposed service, it is expected that more asphalt, instead of concrete, would be used in road building. The State of Virginia, which has previously used only a little premixed asphalt road material for reconstruction work, took bids on 168,000 tons of such material last year. In the past the tendency has been to locate premixed-paving plants on rail sidings, and to haul the crushed stone and other ingredients from the quarry to the plant, while the present tendency is to locate the plants in the quarries, usually not on a rail siding. In these circumstances, the plants wish to receive their asphalt hot and in tank trucks.

The shipper has found that asphalt cannot be hauled in fuel-oil trucks, nor fuel oil in asphalt trucks, since no matter how thoroughly the tanks are cleaned, if a change is made from one commodity to the other, strings of asphalt appear in the fuel oil, or water, of which fuel oil has a certain percentage, will be found in the asphalt causing it to foam under heat and throwing it off specification. The shipper feels that a market is available for its product, and it

intends to develop that market, even if it must purchase its own equipment, but if the same service were available by another carrier, it would be satisfactory.

Protestants' service.-Wentworth D. Vedder, doing business as Vedder Transportation Co., of York, Pa., a contract carrier of petroleum products, transports petroleum products generally from Baltimore to points in a portion of Pennsylvania, and operates tanks equipped with steam coils. He is willing to buy burner-type equipment, enter into a contract with the shipper herein, and provide the service proposed by applicant, if the business is offered. On June €, 1939, the Commission, division 5, in No. MC-87896, granted Vedder a permit as a contract carrier, among other things, of petroleum products, in bulk, from Baltimore to points in a described portion of eastern Pennsylvania.

E. Brooke Matlack, of Philadelphia, Pa., a contract carrier of petroleum products, has specialized in the transportation of roadbuilding materials since 1930, and has transported asphalt both heated and unheated. Five tractors with pumps and five trailers with steam coils are operated. In his experience, if the asphalt is loaded at the correct temperatures, it is generally unnecessary to apply heat for unloading at destination. The only occasions on which the application of heat has been found necessary are those when trucks have been delayed en route by break-downs or other causes, and in those cases steam is always available at destination, as the plants using asphalt must have steam to handle the asphalt after receiving it. He has investigated the heater-equipped trucks used by applicant but has not put them into use, as he feels that it is not the proper type of equipment to use as the total weight of the equipment is substantially increased, and in his opinion such equipment does not meet the safety requirements of this Commission. He would not purchase heater-equipped trucks if tendered a contract by the shipper herein. In his pending "grandfather" clause application, he claims the right to transport petroleum products throughout all the States included in this application, except West Virginia.

Petroleum Transport Co., of York, Pa., a common carrier of petroleum products, is willing to render the service proposed by applicant, and will either lease or buy heater-equipped tanks if the business is tendered it. It operates 40 tractors and 40 trailers and is financially able to purchase additional equipment as needed. In No. MC-183, Petroleum Transport Co. Common Carrier Application, 24 M. C. C. 389, the Commission, division 5, granted to this carrier certificates as a common carrier of petroleum products from Baltimore to Washington, D. C., 5 specified points in West Virginia,

points in a described portion of eastern Pennsylvania, Wilmington, Del., and points in Virginia on and north of U. S. Highway 50.

Three railroads serving points generally in the area included in this application have transported for the shipper herein large quantities of asphalt in 1938 and 1939. Rail tank cars vary in capacity from 6,000 to 12,000 gallons, and are either owned or leased by the shipper.

Relationship to shipper.-There is conflicting testimony with respect to applicant's relationship to the shipper and to the extent applicant's proposed for-hire service will be utilized, if at all. For instance, applicant testified that he is the sole distributor at Baltimore, where all the traffic originates; that orders received by the shipper are turned over to him and that he consummates the sale and makes delivery as a private carrier; and that, if the application is granted, he will continue to buy and sell to his own customers as in the past. He also testified that all of the storage tanks of the shipper at which tank trucks can be loaded, totaling one million gallons, are leased to him. Likewise, the sales engineer of the shipper testified that most of the business is sold to applicant directly, in which the shipper has no interest other than the sale to applicant, and that he knows of no shipments which would require transportation by applicant, other than applicant's own materials which he has purchased. On the other hand, the shipper introduced an exhibit indicating that it has 44 customers in this territory other than applicant, and its traffic representative testified there are other storage tanks, not leased to applicant, from which it is possible to load tank trucks, and that other trucks are in fact hauling from them at the present time. Applicant has no inventory item in his financial statement to cover the asphalt said to be bought and stored by him. In contrast to these conflicting facts is the shipper's urgent desire for the proposed service and its intention to obtain the service by purchase of its own equipment if necessary. We therefore conclude that the traffic contemplated will consist of sales to the shipper's own customers, and not those handled through applicant as representative.

a

sales

Protestants are apprehensive that, by reason of his close relationship with the shipper, applicant will be in a position to compete with them on an unequal basis giving rise to destructive competitive practices, and that such an arrangement would be contrary to the public interest. However, there is no showing here that any such competitive practices will result. See R. & R. Exp. Co. Contract Carrier Application, 7 M. C. C. 115. Further, section 218 of the act now requires that contract carriers establish and observe reasonable minimum rates and charges, and empowers us to prescribe just

and reasonable minimum rates. Thus empowered, we foresee no destructive competitive practices as envisioned by protestants which could not be remedied by us.

Private and contract hauling.-While applicant will transport both as a contract and private carrier in the same territory, the traffic will all move out-bound from Baltimore, and accordingly applicant will be unable to transport as a for-hire carrier in one direction and as a private carrier in the other thereby offsetting the cost of operation in such manner as to place other for-hire carriers at a disadvantage. In this respect the instant case differs from the facts in Geraci Contract Carrier Application, 7 M. C. C. 369, which is cited by protestants in support of their contention that the application should be denied, and the principle of that case is not here controlling. See Good Roads Co., Inc., Contract Carrier Application, 10 M. C. C. 183.

Discussion. While two of the protesting carriers offer to provide the service here proposed by purchasing heater-equipped tank trucks similar to those employed by applicant, neither of them is authorized to serve the entire territory in which the shipper desires service. Further, the record fails to disclose whether those protestants can provide personnel experienced in the transportation of asphalt and in this type of equipment, the safe operation of which is largely dependent on their experience. This type of service is not now rendered by them, nor does any of the traffic move by existing for-hire motor carriers. Accordingly, no diversion of traffic from such carriers will result from the granting of the authority sought. In our opinion the proposed operation, if maintained and conducted separately and apart from applicant's private-carrier operation, will be consistent with the public interest and the national transportation policy.

Applicant is fit and able, financially and otherwise, to perform the proposed operation.

Findings. We find that operation by applicant, in interstate or foreign commerce, as a contract carrier by motor vehicle, in heated temperature-controlled tank trucks, of petroleum asphalt of a B. (or A. P. I.) gravity of 14° or less, which requires a minimum unloading temperature of 230° F., from Baltimore, to points in Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia, and the District of Columbia within 165 miles of Baltimore, over irregular routes, will be consistent with the public interest and the national transportation policy declared in the Interstate Commerce Act; that applicant is fit, willing, and able properly to perform such service and to conform to the provisions of the act and our requirements, rules, regulations thereunder; and that a permit authorizing such operations should be granted, subject to the conditions that such operation shall

be conducted separately from applicant's other activities, that a separate accounting system therefor shall be maintained, and that applicant shall not transport property as both a public and private carrier at the same time in the same vehicle, and subject to the further condition that applicant shall not light or keep lighted open-flame burners attached to any vehicle used in the aforesaid transportation except and only when such vehicle is at rest and off of the highway.

Upon compliance by applicant with the requirements of sections 215 and 218 of the act, with our rules and regulations thereunder, and with the requirements established in Contracts of Contract Carriers, 1 M. C. C. 628, an appropriate permit subject to the conditions above indicated will be issued. An order will be entered denying the application except to the extent granted.

PATTERSON, Commissioner, dissenting:

I agree with the majority that public safety requires that the openflame burners on applicant's vehicles should not be lighted except when the vehicles are at rest off the highway. When so operated, applicant's service will not be superior to that now afforded by the protesting motor carriers. As the latter appear to have available sufficient equipment to serve adequately the one shipper proposed to be served, public convenience and necessity do not require applicant's proposed operation.

28 M. C. C.