pers, such as the issuance of through bills of lading, publication of through rates, and filing of surety bonds and policies of insurance as may be required by us; and (7), (8), that it is practically impossible under the provisions of section 408 for any persons other than forwarders to tender less-than-truckload shipments to the underlying carriers under like conditions, or conditions which closely approximate the conditions under which forwarders tender similar shipments to such carriers.

We shall, therefore, proceed to make such comment as seems warranted in connection with each of the contentions above stated.

Chicago Heights case.—(1) In the Chicago Heights case it was found that the proportional rates in issue were not in reality available to all of the shipping public, and in practical effect would operate for the special benefit of the forwarders and would not benefit the owners of the goods shipped. The situation in the instant proceeding differs from that considered in the case cited in that the assembling rates published by respondent are available to all shippers for whom respondent may render service under "like conditions" as to the forwarders, and would benefit the owners of the goods shipped.

Such appears to have been the intent of the Congress. Congressman Wolverton in explaining section 408 to the House of Representatives on August 23, 1941, after referring to the Chicago Heights case said:

your committee gave consideration to the question of permitting carriers performing assembling or distribution service to make special rates therefor less than their regular rates which could be used by forwarders and other shippers under similar circumstances. Section 408 is the result of that study. [See 77th Cong. Rec. 8426.]

Key points.-(2) The fact that key points may be concentration points as to some shipments does not preclude them from being gathering points as to other shipments. That phase of section 408 is discussed at page 11 of the House Report, where the following statement appears:

Due to the fact that in different movements of traffic, even by the same for warder, what happens to be the principal key point at one time may be a sub-key point at other times, it will not be possible to designate points between which, for the purpose of all movements, "assembling" and "distribution" rates may not be established. This sentence must operate, in practical effect, as a limitation on the availability or use of such rates in particular circumstances rather than, in an absolute sense, a limitation on the establishment of such rates between certain points.

Undue or unreasonable preference and prejudice.-(3) The fact that the assembling rates may in their application result in advantages

to certain persons or classes of persons does not of itself necessarily result in those rates being in violation of the act. These rates are open to any person who offers for shipment less-than-truckload freight at certain points served by respondent for transportation to Chicago, and there has such freight assembled with other freight and consolidated into carload lots for shipment by railroad to points west of the Mississippi River. No undue or unreasonable preference and prejudice under section 216 (d) of the act is shown.

Shippers' associations.—(4) The purpose of section 402 (c) of the the act is to exempt from regulation as a forwarder the operations of a shipper or a group or association of shippers who merely consolidate or distribute freight for themselves or for members of their group on a nonprofit basis. Section 402 (c) reads:

The provisions of this part shall not be construed to apply (1) to the operations of a shipper, or a group or association of shippers, in consolidating or distributing freight for themselves or for the members thereof on a nonprofit basis, for the purpose of securing the benefits of carload, truckload, or other volume rates, or (2) to the operations of a warehouseman or other shippers' agent, in consolidating or distributing pool cars, whose services and responsibilities to shippers in connection with such operations are confined to the terminal area in which such operations are performed.

Liability for loss or damage.-(5) The fact that forwarders assume responsibility for loss or damage to freight does not in any way lessen the responsibility of the underlying common carriers in the event a loss occurs while the freight is in the latter's possession. The Association handles such claims in a manner similar to that in which the forwarders handle their claims. It receives the claim from the member shipper who sustains the damage and files it with the proper carrier, in the same manner as do the forwarders.

Utilization of services of common carriers.-(6) The issuance of through bills of lading, publication of rates for the entire service, and filing of surety bonds and policies of insurance by forwarders are factors which primarily concern the relations between the forwarder and its customers, and do not reflect the conditions under which the instrumentalities or services of common carriers are utilized in transporting less-than-truckload or less-than-carload freight from origin to point of consolidation into carload or truckload lots.

Like conditions.-(7) As stated, section 408 of the act authorizes carriers to establish assembling rates applicable to forwarders and others who utilize the instrumentalities or services of common carriers under like conditions. The purpose is unmistakable, to permit common carriers performing assembling or distribution service to make special rates therefor less than their regular rates which would be used by forwarders and other shippers under like conditions, when such

difference in rates is justified by a difference in the respective conditions under which the instrumentalities and services of common carriers are employed or utilized in assembling and distribution operations. The physical handling of less-than-truckload freight by respondent from origin to Chicago, the consolidation point, for both forwarders and other shippers as herein described is performed under "like conditions."

Clarification of definition of "freight consolidator".-(8) While the parties understand the type of shipments coming within the provisions of respondent's tariff definition of a "freight consolidator," it is apparent that that definition is loosely constructed, too long, and not sufficiently explicit. We expect that respondent will clarify that term in its tariff promptly, and if this is not done, will give further consideration to what action, if any, is warranted.

We therefore find:

1. Transamerican has established assembling rates, charges, and classification rules and regulations applicable thereto, which apply on less-than-truckload freight, received by it at points on its line east of Chicago for movement in interstate commerce to ultimate destinations beyond Chicago. Such freight is delivered by respondent to a freight forwarder or a freight consolidator at Chicago and moved beyond by railroad in carload quantities.

2. A "freight consolidator" as defined in the tariff embraces individual shippers or a group or association of shippers.

3. Traffic of individual shippers or shippers' associations, as described herein, is being transported under these rates. The shipments are in less-than-truckload lots and originate at various points in the East and move to Chicago, the concentration point, where the freight is assembled and consolidated with other freight into carload lots for movement by railroad to points west of the Mississippi River.

4. There is no solicitation expense incurred by respondent in the handling of freight transported under these rates.

5. The cost to the carriers in handling loss and damage claims of shippers and their associations is less than on traffic not handled under these rates, as all such claims are handled through the freight consolidators instead of by the individuals for whom the shipments are consolidated.

6. Transamerican makes only one delivery a day from its dock in Chicago to the facilities of the consolidator. This results in a saving as compared with the cost to respondent of delivering a comparable quantity of local less-than-truckload shipments to many different points throughout the city.

7. The shippers and shippers' associations as described herein employ or utilize the instrumentalities or services of Transamerican in

assembling operations under conditions like those under which forwarders employ or utilize the instrumentalities or services of the same carrier in their assembling operations.

8. The difference between the class rates and the assembling rates published by Transamerican to apply from the origins of less-thantruckload shipments to Chicago is justified by differences in the respective conditions under which the instrumentalities or services of that carrier are employed or utilized.

We further find from this record that the application of assembling rates to shipments of a "freight consolidator" as defined in the proposed rule is not unreasonable, unjustly discriminatory, unduly prejudicial, or otherwise unlawful.

The investigation and suspension proceeding will be discontinued, and the complaint dismissed.

Appropriate orders will be entered.

LEE, Commissioner, concurring in the result:

I concur in the result reached in this report because I think it is in accord with the intention of Congress as expressed in section 408 of the act. Whether that section should be amended so as to bring about a different result in situations such as are here presented is, of course, a matter for Congress to determine.

SPLAWN, Commissioner, dissenting:

While there is much in this report with which I concur, I am impressed that the analysis of the issues and problems confronting the Commission in this proceeding is incomplete.

Briefly, a forwarder as defined in the act is a person which holds itself out to the general public to transport or provide transportation of property, for compensation, and which (a) provides the services in the operations of assembling and consolidating, and breaking bulk and distributing consolidated shipments, (b) assumes responsibility for the transportation of such property from point of receipt to destination, and (c) utilizes the services of a carrier or carriers subject to part I, II, or III of the act, for the transportation of the shipments. To engage in this service and secure the benefits of the act, a forwarder must prove that it is entitled to a permit, comply with the various requirements of the act, assume duties and responsibilities, and generally submit to regulation, in a manner substantially similar to that of a common carrier by motor vehicle. Section 402 (c) makes the provisions of the act inapplicable, so far as here relevant, "to the operations of a shipper, or a group or association of shippers, in consolidating or distributing freight for themselves or for the members thereof, on a nonprofit basis, for the purpose of securing the benefits of carload, truckload, or other volume rates," and section 408 permits common carriers subject to part

I, II or III of the act to establish and maintain assembling or distribution rates and charges "applicable to freight forwarders and others who employ or utilize the instrumentalities or services of such common carriers under like conditions."

I

The majority states that "The purpose of section 402 (c) of the act is to exempt from regulation as a forwarder the operations of a shipper or a group or association of shippers who merely consolidate or distribute freight for themselves or for members of their group on a nonprofit basis," and apparently assumes that this is authority for exempting the shippers and shipper associations here involved from the requirements of the act applicable to forwarders, while according the shippers the benefits provided in section 408 under the category of "others" et cetera.

It should be observed that under the majority findings the shippers will receive substantial benefits from the use of carload rates beyond Chicago on consolidated carloads of less-than-truckload shipments, and also the use of assembling rates on less-than-truckload shipments transported as such to Chicago. Section 402 (c) ensures to shippers that they will not be subject to regulation as forwarders in the exercise of a right, which shippers have previously had, to consolidate freight in order to get the benefits of carload, truckload, or other volume rates, but it makes no mention of assembling and distribution rates referred to and defined in section 408 which, obviously, are in a wholly different class.

II

Turning now to section 408 we find that the majority uses the similarity of the physical services rendered to forwarders and shippers as the sole criterion of "like conditions" and reaches the conclusion that certain shippers may receive the benefit of the assembling and distribution rates. These shippers thereby acquire an advantage over other shippers, and to some extent over forwarders who are subject to regulation and are held to certain standards and restrictions in their operations. Section 408 permits common carriers to maintain special rates, and is in the nature of an exception to a remedial statute prohibiting unjust discrimination, and must be strictly construed. In my opinion, the majority have enlarged upon the section to such an extent as to authorize unlawful discrimination between shippers. The assembling and distribution rates are "applicable to freight forwarders" and not to all traffic physically handled in the same manner. Such rates may be made available "to others * under like conditions" meaning that in addition to a similarity in the physical service they are also subject to other conditions imposed on the forwarders.

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