UNITED STATES OF AMERICA

Historical note, see vol. 11, p. 8954.

Because of their very nature, the commission has often approved lower minimum weights for motor than for rail carriers. There is no showing which is the low-cost mode of transportation for the commodity. In the circumstances, a rate parity may not be condemned merely because the advantage of more economical service in handling costs and damage claims would divert most or all of the traffic to respondents.-Tanning Extract from Newark, N.J., to New Albany, Ind., 304 I.C.C. 233 (235).

In view of motor carriers' competitive service advantage in connection with movement of the traffic, motor rate, minimum 35,000 pounds, on a parity with rail rate, minimum 40,000 pounds, would divert substantially all of the traffic to respondents; the result would no doubt be a further cut in rail rates and unnecessary dissipation of carrier revenues. Proposed rate is lower than necessary to enable respondents fairly to compete for

the traffic.-Magnesium from Ill. and Mo. to Denver, 301 I.C.C. 315 (317-8).

Since neither mode of transportation has an inherent advantage in service on the traffic, rate equality is consistent with the national transportation policy. Maintenance of a lower minimum than that maintained by rail is not a material factor in the competition for mineral pulp traffic.-Mineral Pulp to Chillicothe, Ohio, 66 M.C.C. 659 (660).

It is not the duty of any mode of transportation to maintain high rates for the sole benefit of another mode of transportation.-Carbon Black, Southwest to United States and Canada, 298 I.C.C. 721 (727)*; to require motor and rail carriers to maintain rates above what would appear to be a reasonable level, to enable a water carrier to obtain traffic, would be unfair to carriers and shippers alike and contravene the national transportation policy.-Magnesium from Velasco, Tex., to East St. Louis, Ill., 304 I.C.C. 427 (433)*.

Rail carriers may not be required to refrain from establishing rates which are reasonable and otherwise lawful under the act for the purpose of protecting the traffic of motor carrier competitors.-Paving Equipment from Chicago to Philadelphia, 299 I.C.C. 179 (180)*; Can Ends and Tinplate, St. Louis to Kansas City, Mo., 300 I.C.C. 182 (184); and contention that "under the national transportation policy the

legitimate investment of this company must be protected by the commission" rests upon an unjustifiable interpretation of that policy.-Molasses from Gulf Ports to the Middle West, 300 I.C.C. 557 (572).

At the prior rate all of the traffic was diverted to rail protestants. To refuse to permit respondent to maintain a rate and minimum on the same level as those of protestants, in the circumstances, would approach, if not actually constitute, an attempt by the commission to apportion the traffic artificially and thereby eliminate normal, healthy competition contrary to the national transportation policy.-Can Ends and Tinplate, St. Louis to Kansas City, Mo., 300 I.C.C. 182 (194); upon each prior reduction by either mode of transportation, traffic reverted to carrier which caused the reduction; motor carrier not required to refrain from establishing rate that would permit it to share in the traffic.-Tractor Treads from Adrian, Mich., to Noblesville, Ind., 301 I.C.C. 200 (202).

Respondents are not required to forego fully compensatory rates solely to protect competing carriers. If the barges are the low-cost carriers in fact, they should have no difficulty in maintaining a proper differential under the rail rate.-Tinplate from St. Louis Group to Texas, 304 I.C.C. 473 (477).

As proposed rate would result in diversion of all or practically all of the traffic from barge-rail to all-rail routes, it is lower than necessary to meet the existing competition, would constitute unfair and destructive competitive practice, in contravention of the national transportation policy.-Ingot Molds from Pa. to Alabama City, Ala., 299 I.C.C. 77 (82).

Whether a differential in costs of service between different modes of transportation is necessary to provide a fair opportunity for each to compete for certain traffic depends upon the facts in each case. If proposed t.l. rate to apply on intercoastal traffic were approved, practically all the considered traffic would be diverted from the rail car

riers.-Soap Powder from Jacksonville to Atlanta, 300 I.C.C. 763 (766).

While rail carriers urge that, in order to remain competitive, the rail rate must be lower than the motor rate, and insist that proposed rate constitutes unfair and destructive competition, inasmuch as they are not now participating in the traffic, it does not appear that establishment of proposed rate by motor carriers will result in unfair or destructive competition.-Tubing from Reading, Pa., to Atlanta, Ga., 301 I.C.C. 343 (344-5).

While the terminal-to-terminal rates are substantially below the rates of defendant's competitors, they are reasonably compensatory for the services provided; do not constitute destructive competition in contravention of the national transportation policy.-Acme Fast Freight, Inc. v. Western Freight Assn., 299 I.C.C. 315 (327)*.

When lower class rates, established to obtain or divert traffic from other carriers, are met by reduced commodity rates to regain the lost traffic, rate cutting in one of its most vicious aspects is present. Such practice contravenes the national transportation policy, and, if allowed to continue unchecked, will destroy the rate structure, to the detriment not only of participating carriers but of the shipping public, through the inferior service which inevitably would follow.Middle Atlantic Conference v. A.A.A. Trucking Corp., 302 I.C.C. 499 (512).

The commission may not require carriers subject to its jurisdiction to refrain from publishing rates which are reasonable and otherwise lawful merely to preserve the present division of traffic among competing modes of transportation. Refrigerating Machinery, Mich. to Galesburg, Ill., 304 I.C.C. 75 (78); Cans, Iron or Steel from St. Louis to Louisville, 303 I.C.C. 647 (650); Petroleum in North Pacific Coast Territory, 302 I.C.C. 219 (240)*.

To prohibit, where physical rail service is the same, all proportional rates lower than local rates and varying with primary origin or ultimate destination of the traffic, and thus to deprive uncarriers and users regulated water

thereof, where joint rail-water rates could not be prescribed, of fair opportunity to compete for the traffic, would contravene the national transportation policy. Carried to its logical conclusion, it would require extensive revisions of rates and adjustments long maintained on numerous commodities throughout the country.-Koppers Co., Inc. v. Chesapeake & O. Ry. Co., 303 I.C.C. 383 (396)*. Exemption: [Vols. 12, 13, 14, 16].— See also § 204 (e)-(f), n. 10, infra.In granting water carrier exemption from regulation on bulk petroleum transported in vessels also used to transport regulated deck loads, under § 303 (e) (2) exempting noncompetitive contract carriage, the commission was not required to consider the national transportation policy, since in § 303 (e) (2) no mention is made of the national transportation policy. Seatrain Lines, Inc. v. United States, 152 F. Supp. 619 (626-629)*.

General Services Administration: Decision of the Comptroller General, B102080, April 13, 1951, October 19, 1954, indicates inter alia that GSA as a government traffic manager is not subject to the mandates of the national transportation policy as set forth in the Interstate Commerce Act.-Reduced Rates under $22, Special Filing Rule, 299 I.C.C. 417 (419).

Incentive Rates: [Vol. 17].—Incentive rates are designed to increase the maximum use of rail cars, and reflect the rail carrier's lower cost per 100 pounds in transporting large quanties in the same car. This is in keeping with such carriers' inherent advantage, namely, the ability to transport heavier payloads in one unit. There is no like advantage in connection with motor-carrier shipments.-Alcoholic Liquors, Philadelphia to Baltimore and Washington, 69 M.C.C. 471 (473); Alcoholic Liquors from New Orleans to Peoria, 301 I.C.C. 665 (668); Id., 304 I.C.C. 65 (67); motor-carrier incentive rates, tobacco, prescribed.— Manufactured tobacco from Louisville to St. Louis, 67 M.C.C. 579 (582, 583).

The incentive method of publishing railroad rates is designed to meet a load

ing situation confronting the railroads and the same situation does not pertain to motor-carrier service. However, establishment of the same rates and minimum by motor carriers is not intended to meet a particular loading situation, and they are not incentive rates within the meaning of that term.-Cigarettes, Va. to N.Y., Pa., and New England, 300 I.C.C. 267 (272).

Proposed motor-carrier rates are intended to meet rail competition. Motorcarrier rates subject to a minimum weight in excess of the physical or legal carrying capacity of motor vehicles are not unlawful per se. They must be compensatory and no lower than necessary to meet competition. Accordingly, there is no merit in contention that motor carriers may not in the exercise of managerial discretion publish rates on the same basis as the rail incentive rates. Id., p. 272.

Inherent advantages: [Vols. 13, 14, 16, 17]. The national transportation policy is the yardstick by which the correctness of the commission's actions must be measured. While the commission possesses a wide range of discretionary authority in determining whether the public interest warrants certification of any particular proposed service, that discretion must be exercised in conformity with the declared policies of the Congress. Viewing the commission's conclusions in the light of the national transportation policy, there has been no evaluation made of the "inherent advantages" of the motor service proposed. -Schaffer Transp. Co. v. United States, 355 U.S. 83 (88–89)*.

Under the national transportation policy when a motor carrier seeks to offer service where only rail transportation is presently authorized, the inherent advantages of the proposed service are a critical factor which the commission must assess.-Id., p. 89-90.

The ability of one mode of transportation to operate with a rate lower than competing types of transportation is precisely the sort of "inherent advantage" that the Congressional policy requires the commission to recognize.-Id., p. 91.