No. MC-94507

JOE D. HUGHES, INC., CONTRACT CARRIER

APPLICATION

Decided June 1, 1940

1. On reconsideration, findings in prior report, 7 M. C. C. 515, that a permit as a contract carrier by motor vehicle, for the purpose of stringing pipe and pipe-line material and placing and erecting pumping-station machinery and oil-tank material on and along the right-of-way of a pipe-line company, is not required by the provisions of the Motor Carrier Act, 1935, modified. 2. Described operations found to be those of a common carrier by motor vehicle. Application denied.

Appearances shown in prior report.

REPORT OF THE COMMISSION ON RECONSIDERATION

DIVISION 5, COMMISSIONERS EASTMAN, LEE, AND ROGERS

BY DIVISION 5:

In the prior report and order herein, 7 M. C. C. 515, the examiner found that a permit as a contract carrier by motor vehicle for the purpose of stringing pipe and pipe-line material and placing and erecting pumping-station machinery and oil-tank material on and along the right-of-way of a pipe-line company is not required under the provisions of the Motor Carrier Act, 1935; and that such transportation over the highways as is performed in connection with such work up to the point where the trucks of applicant leave such highway and enter the private right-of-way of the pipe-line company is subject to the requirements of the Motor Carrier Act, 1935, insofar as it is in interstate or foreign commerce. In the circumstances, the application was denied. No exceptions were filed to the recommended order, and it became effective as our order on May 24, 1938. For reasons explained below, the proceeding was reopened for reconsideration on our own motion on October 24, 1938.

Our attention has been drawn to certain conclusions in the prior report herein which do not conform to our conception of the proper interpretation of the act and which, unless corrected, would lead to misconception. Accordingly, we reopened the case for further consideration. We are satisfied both with the statement of facts and with the conclusion that the application should be denied, but we wish to restate the grounds upon which we place our order denying the application.

The services which the applicant has rendered during the “grandfather" period consist in part in the transportation of pipe and heavy machinery over the public highways and in part in stringing the pipe along the private rights-of-way of oil companies' pipe lines and the placing of heavy machinery in its position on the private rightsof-way. On this set of facts, the examiner came to the conclusion that as to that portion of the work which is performed on private rightsof-way of pipeline companies, these services are not subject to the Commission's jurisdiction. The examiner's conclusion was reached from consideration of the language of sections 206 (a), 209 (a), and 203 (a) (13) of the act. These sections all refer to transportation in interstate commerce on "any public highway" or "upon the highways". The examiner concluded that it followed that only that portion of the work contemplated by a pipe-stringing operation which is transportation performed over any public highway is subject to our jurisdiction under the act.

With this conclusion we cannot agree. It is true that sections 206 (a) and 209 (a) forbid transportation in interstate or foreign commerce on any public highway without appropriate authority issued by this Commission, but it is not true, in our opinion, that these prohibitions define the measure and limit of our jurisdiction. The services of stringing pipe and placing machinery and the equipment used therein clearly fall within the definition of the words "services" and "transportation" contained in section 203 (a) (19). That section reads as follows:

The "services" and "transportation" to which this part applies include all vehicles operated by, for, or in the interest of any motor carrier irrespective of ownership or of contract, express or implied, together with all facilities and property operated or controlled by any such carrier or carriers and used in the transportation of passengers or property in interstate or foreign commerce or in the performance of any service in connection therewith.

There is no limitation in this provision to services and transportation upon the highways. Transportation clearly includes receipt of the shipment from the consignor and its delivery to the consignee, and we find nothing in the act which confines either receipt or delivery to a point located on a highway. However, the services must be associated and connected with transportation. For example, delivery of a piece of machinery at a suitable and convenient place is clearly associated with transportation, but services in placing and adjusting machinery, after such delivery, so that it is in proper condition for operation are not transportation services.

Carried to its logical conclusion, the principle announced by the examiner would deprive us of jurisdiction over the operation of a carrier when receiving or discharging freight or passengers upon a

private terminal or within the premises of stockyards, large industrial plants, and the like. It would deprive us of jurisdiction over the operations of carriers who transport grain from the fields, ore from the mines, logs from the woods, and countless other operations which are an integral part of the operations over which we are commanded to exercise jurisdiction. The services are somewhat analogous to those of the transporter of used household goods whose unique advantage in such transportation over other methods of transportation is that the carrier enters the patron's house, packs and loads the furniture, and places it in its desired position in the premises at the point of delivery. These services are universally recognized as being connected with transportation and are covered by the householdgoods carriers' tariffs. The services are also akin in principle to those of a carrier in the performance of storage in transit, over which we have decided that we have jurisdiction, in the case of Propriety of Operating Practices-New York Warehousing, 220 I. C. C. 102.

It is our conclusion that the services described in this case, insofar as they involve delivery of the articles in question at suitable and convenient points, are services in connection with transportation over which we can and must exercise jurisdiction; that the language in sections 206 (a) and 209 (a) referring to the public highways constitutes a restriction or prohibition applicable only to the matter of operating authority and does not in anywise limit our jurisdiction generally over such operations; and that such operations are subject to the other provisions of the act and to our regulations governing transportation. For example, our insurance rules and requirements apply fully to services performed off the highways as well as upon them; our safety rules apply to vehicles operated in connection with transportation conducted under our certificates and permits whether the vehicles are on or off the highways; and our accounting rules will apply to these operations as well as those conducted upon the highways. In all respects, such services rendered in connection with transportation in interstate or foreign commerce are by us deemed to be a part of that transportation and subject to our jurisdiction to the extent necessary to perform fully our duties of regulation.

It is our opinion that the application should be denied upon the ground that the service in question is common carriage rather than contract carriage, a fact which clearly appears in the record. As stated in the report of the examiner, the applicant has applications on file seeking authority for the performance of the transportation here in question as a common carrier by motor vehicle. The granting of a certificate as a common carrier would, as the examiner points out, provide the applicant with authority to conduct the operations

in question, and under the circumstances there is no occasion for the issue of a contract carrier's permit.

The prior report will be deemed to be modified so as to include the views herein expressed. Since the effective order denying the application has not been vacated or set aside, no additional order is required.

LEE, Commissioner, dissenting:

I agree that the operation of trucks by motor carriers of property on private premises in the loading, or unloading, in the usual manner of shipments to be transported, or which have been transported, over highways in interstate or foreign commerce is a "service in connec tion" with such highway transportation and is subject to our jurisdiction by reason of section 203 (a) (19) of the Motor Carrier Act. However, in the pipe-stringing operations here considered, the manner of the delivery of the pipe is quite different from that usually followed by carriers by motor vehicle in effecting delivery of goods transported by them. The pipe is deposited end-to-end along the open ditch on the private right-of-way. Such delivery requires movement of the trucks along the right-of-way for considerable distances through fields, pastures, woods, and marshlands and over hills, and, at times, the distances the shipments are moved along the right-of-way may exceed the distances covered in their transportation over the highway.

While the pipe-stringing operation on the right-of-way is closely related to the highway transportation of the pipe, it is, so far as the Motor Carrier Act is concerned, a separate operation and not incidental to the highway transportation. That this is true would be readily apparent if the pipe stringing were performed by the contractor constructing the pipe line and the highway carrier's obligations covered only transportation of the pipe to the right-of-way and unloading each truckload in a single pile. The fact that the highway carrier performs both the transportation over the highway and the pipe stringing in a continuous operation does not change the character of the pipe stringing and make it a "service in connection with" the transportation over the highway.

The fallacy of attempting to treat the pipe stringing as a "service in connection with" the highway transportation probably will be more readily apparent if we consider an analogous operation, which is more commonplace. The act gives us jurisdiction over the transportation to market by farmers of their agricultural commodities as to safety requirements. A farmer, having sold a load of ear corn for delivery in town, proceeds with his truck into his field; drives up and down the field for several hours gathering the corn from the stalks; and, im

mediately after completion of the gathering of a load, drives the truck onto the highway and on to town, 15 miles away, crossing a State line while on the highway. That we have jurisdiction over the farmer's truck, as to safety requirements, while it is being used on the highway in transporting the corn, is apparent, but I think it equally clear that we have nothing to do with the truck while it is being used in gathering the corn.

Consequently, I am of the opinion that we have no jurisdiction over the pipe stringing. In view of the fact that the transportation of the pipe over the highway and the pipe stringing are parts of a continuous operation, an arbitrary separation of the two parts is necessary, and the point where the truck leaves the highway and enters the private right-of-way seems to be the logical breaking point.

Also, assuming that the pipe stringing is a part of the highway transportation, and, as such, subject to regulation under the act, I am of the opinion that the entire transportation service is a contractcarrier operation and that a permit is the proper form of authority therefor. Owing to differences in weather conditions and in the terrain over which rights-of-way extend, the cost to the carrier of performing the pipe-stringing portion of the service is subject to wide. fluctuations, and, consequently, it does not appear to be possible for a common carrier to publish a tariff containing fixed charges for the service. It is a highly specialized service, performed under widely varying conditions, and, consequently, the appropriate form for the agreement between the shipper and the carrier for its performance is the "special and individual contract" of the contract carrier.

23 M. C. C.