basis; for this reason the study loses much of its value. A study based upon a longer period of time would not be subject to distortion by temporary conditions. Consideration must also be given to the fact that the operating loss incurred by the respondent for the 9 months ended September 30, 1943, was $23,475, and $18,152 of this was sustained during September, the period used as the basis of the cost analysis.

Revenue of 26.3 cents per vehicle-mile for volume shipments appears high when compared with that of 23.1 cents per vehicle-mile for shipments under 10,000 pounds. It can readily be accepted that under ordinary conditions the cost of transporting truckload freight is less than transporting less-than-truckload freight because of the absence of terminal handling expense, but we are reluctant to agree that volume freight will produce 3.2 cents more revenue per vehicle-mile than shipments under 10,000 pounds, when the average revenue per ton of volume traffic is $7.15 compared with $11.08 for shipments under 10,000 pounds. The analysis further shows that the cost of transporting volume shipments was 15.11 cents per vehicle-mile compared with a cost of 28.64 cents per vehicle-mile for shipments under 10,000 pounds, a difference of 13.53 cents per vehicle-mile. This difference arises from the unsound methods used by the respondent in allocating the expenses of handling the traffic.

As the foregoing indicates, we cannot accept the respondent's determination that its operating ratio on shipments of 10,000 pounds and over is 57 percent and that on shipments under 10,000 pounds it is 124 percent. The class rates of motor common carriers used in connection with the national motor-freight classification are designed to provide less-than-truckload rates properly related to truckload rates. We are not unmindful of the fact that the class rates and the national motor-freight classification are substantially the same as those designed for railroad operation, but we do not believe, and the respondent has not proved, that they are so ill-adapted to motorcarrier operations that an increase of 20 percent in rates on shipments under 10,000 pounds is necessary to provide a reasonable relation between rates on the smaller and rates on the larger shipments. The present bases of class rates were initiated by the respondent and other motor common carriers on April 1, 1936, except as modified by the general increases in rates. The bases were approved as minimum reasonable class rates in Central Territory Motor Carrier Rates, supra. Under these bases of rates, the respondent has substantially increased its investment in tangible property, the amount of service performed, and has built up a substantial reserve. Although the class rates may be in some need of correction to adapt them to motor-carrier opera

tion, we do not believe that they are so maladjusted as between lessthan-truckload and truckload rates as the respondent contends. As we have indicated in the foregoing, it is our opinion that the respondent should be permitted an increase in rates because of the increase in its cost of performing service. These increased costs affect the respondent's entire operations, and should not be borne solely by the shipper of lots less than 10,000 pounds. As stated in the foregoing, the respondent and other carriers are seeking an increase in their minimum charges per shipment, and all carriers, parties to the Bureau's tariffs, including the respondent, have filed schedules containing a general increase of 4 percent in truckload and less-than-truckload rates between points in central territory. The latter tariffs have not become effective, but are subject to protest and suspension. If the other efforts of the respondent to obtain increased revenues should not produce sufficient revenue to enable it to earn a reasonable return under honest, economical, and efficient management, it may apply for a further increase in its rates.

We find that the proposed rates are unjust and unreasonable. An order will be entered requiring the cancelation of the suspended schedules and discontinuing the proceeding, without prejudice to the filing of new schedules in conformity with the foregoing discussion.

from freight revenue. However, for purposes of this statement it is treated as an expense.
Note: Purchased collection and delivery under provisions of the uniform system of accounts is deducted

Deficit.

43 M. C. C.

141, 637 103. 2 5,931, 196

142, 150
23.1

1 35, 088 102. 6 5,695, 665 137, 477 23.8

144, 408

167, 883

103. 5 5,128, 074 129, 150

101. 3

21, 977, 088

550, 608

25.4

24.3

1942

Percent increase

$5, 155, 335

2.3

5,095, 249

4.9

60, 086

No. MC-C-367

SHERWIN-WILLIAMS COMPANY v. ADVANCE TRANSPORTATION COMPANY OF WISCONSIN ET AL.

Submitted November 25, 1943. Decided February 15, 1944

Commodity rate on paint and paint materials, between Chicago, Ill., and Milwaukee, Wis., found not unreasonable, unjustly discriminatory, or unduly prejudicial. Complaint dismissed.

John B. Sanford for complainant.

Earl Girard for defendants.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS SPLAWN, MAHAFFIE, AND ALLDREDGE BY DIVISION 2:

Exceptions were filed by complainant to the order recommended by the joint board.

By complaint filed May 22, 1943, the complainant, a corporation, alleges that the rate on paint and paint materials, in truckloads, maintained by defendants, Advance Transportation Company of Wisconsin and West Shore Transport Company, hereinafter called Advance and West Shore, respectively, for local movements between its plant in Chicago, Ill., and Milwaukee, Wis., is unreasonable, unjustly discriminatory, and unduly preferential and prejudicial. It asks us to prescribe a reasonable rate for the future and to order defendants to remove the alleged unjust discrimination and undue prejudice. West Shore filed an answer but was not represented at the hearing. Rates will be stated in amounts per 100 pounds.

Complainant's plant is approximately 5 miles south of Seventy-fifth Street in Chicago, and 11 miles southeast of Advance's Chicago terminal. The assailed rate of 18 cents, minimum 20,000 pounds, is applicable on shipments of paint and paint materials between all points in an area extending approximately 21 miles south and 23 miles southeast of Seventy-fifth Street, on the one hand, and Milwaukee, on the other. The defendants maintain a rate of 16 cents, minimum 20,000 pounds, on the same commodities between points in an area extending approximately 36 miles north of Seventy-fifth Street, on the one hand, and Milwaukee, on the other. The area accorded the rate of 16 cents, hereinafter called the north Chicago area, includes that portion of Chicago north of Seventy-fifth street and 22 other Illinois points, and that subject to the higher rate of 18 cents, hereinafter called the south Chicago

area, embraces 23 Illinois points and 19 Indiana points in addition to that portion of Chicago south of Seventy-fifth Street. Over the lines of Advance, the average distances from the north and south Chicago areas to Milwaukee are 84 and 112 miles, respectively, and the distance from complainant's plant to the destination of its shipments in Milwaukee is 109 miles.

There are a number of paint manufacturers and distributors in the north and south Chicago areas and in Milwaukee, and the movement of paint and paint materials between these Chicago areas and Milwaukee is substantial. At one time, complainant made shipments over the lines of both Advance and West Shore, but it has not used the service of Advance for over 22 years. Whether it has continued to use the service of West Shore is not disclosed. There is no evidence of any specific shipments by motor vehicle made by either complainant or its competitors.

Complainant contends that the rate assailed is unreasonable to the extent that it exceeds the 16-cent rate from the north Chicago area, and that the maintenance by defendants of a higher rate from and to its plant results in unjust discrimination against it and undue preference of its competitors located north of Seventy-fifth Street. It compares the rate assailed with the commodity rates on specified commodities, in truckloads, minimum 20,000 pounds, between Chicago and numerous points in several States, for distances ranging from 73 to over 400 miles. Except for certain rates on paint and paint materials from Chicago to St. Louis, Mo., and several points in Iowa, the compared rates are on agricultural implements and parts, feed, petroleum and petroleum products, alcoholic liquors, and malt. None of the compared rates applies between Chicago and Milwaukee, but for distances of 100 miles or less, they yield somewhat higher truck-mile revenues than the rate assailed.

Advance admits that all points within the corporate limits of Chicago are usually accorded the same rates on both out-bound and in-bound traffic. Since 1936, however, its rates from the north Chicago area to Milwaukee on numerous commodities, including paint and paint materials, have been lower than the corresponding rates from the south Chicago area, except for certain periods during which the rates were the same from both areas. It contends that its present rates between the north and south Chicago areas and Milwaukee are its actual cost of transporting truckload traffic, and that the 2-cent difference in such rates is warranted because of the difference in the average distances for which the rates apply. For the period from January 1 to June 30, 1943, Advance's average truck-mile cost of operation for an average truckload movement of 106 miles was

based

upon

34.5 cents a mile, or an average truckload cost for that distance of $36.57. Its average truckload costs computed in the same manner, for the average distances from the north Chicago and south Chicago areas to Milwaukee, 84 and 112 miles, were $28.98 and $38.64, respectively, and for the distance of 109 miles from complainant's plant to Milwaukee, its average truckload cost was $37.60. The rate assailed yields $36 a truckload of 20,000 pounds and that sought would yield $32 a truckload.

Paint and paint materials, in truckloads, are generally rated fifth class, and the fifth-class rate of 21 cents from all points in Chicago to Milwaukee would yield $42 on a truckload of 20,000 pounds. Certain rail carriers maintain rates on these commodities between Chicago and Milwaukee of 15 cents, minimum 30,000 pounds, and 12 cents, minimum 50,000 pounds, which yield carload revenues of $45 and $60, respectively. The average distance from the south Chicago area to Milwaukee is approximately 133 percent of that from the north Chicago area, while the rate assailed from the south Chicago area is but 112.5 percent of that from the north Chicago area.

It is not unlawful for motor carriers to maintain different rates from or to different zones or areas in the same city. This was recognized in the trunk-line territory minimum motor rates revision. Considering the differences in distance, the fact that the defendants maintain different rates between Milwaukee and the north and scuth Chicago areas is of no significance in the absence of evidence that the rate assailed is unreasonable, or that the difference between the rates has operated to complainant's disadvantage in marketing its products. No such evidence has been adduced.

We find that the rate assailed is not unreasonable, unjustly discriminatory, or unduly prejudicial. The complaint will be dismissed.

43 M. C. C.