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No MC-1006041

ERIE RAILROAD COMPANY, SELF-INSURANCE

Submitted March 13, 1944. Decided July 10, 1944

1. On reconsideration, in No. MC-100604 (Sub-No. 1) and No. MC-101010 (subnumbers 1 to 7) authority granted in prior report, 28 M. C. C. 649, to selfinsure under section 215 of the Interstate Commerce Act, revoked.

2. Application in No. MC-101010 (Sub-No. 2) and MC-101010 (Sub-No. 4) for authority to self-insure under section 215 of the Interstate Commerce Act, approved.

REPORT OF THE COMMISSION ON RECONSIDERATION

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON

BY DIVISION 5:

In the prior report in No. MC-100604 and No. MC-101010 division 5 approved the application of Robert E. Woodruff and John A. Hadden, trustees of the property of Erie Railroad Company, a corporation, of Cleveland, Ohio, for authority to self-insure under the provisions of section 215 of the Interstate Commerce Act. Thereafter, pursuant to order of the District Court of the United States for the Northern District of Ohio, Eastern Division, all of the estate of Erie Railroad Company was vested in Erie Railroad Company, as reorganized.

By application filed March 13, 1944, the Erie Railroad Company seeks authority to self-insure under the provisions of section 215 of the Interstate Commerce Act. It is engaged in operations as a common carrier by motor vehicle, in interstate or foreign commerce, of general commodities between Susquehanna, Pa., and Great Bend, Pa.; between Goshen, N. Y., and Pine Island and Montgomery, N. Y., and certain intermediate points; and between Middletown, N. Y., and Pine Brush, N. Y., and certain intermediate points. These operations were formerly conducted by the trustees named above, under authority of certificates of public convenience and necessity issued in No. MC101010 (subnumbers 2 and 4). Application for the transfer of such certificates from the trustees to Erie Railroad Company has been filed with us. The railroad here seeks to be substituted, in place of such trustees, as self-insurer with respect to such operations.

1 This report also embraces No. MC-100604 (Sub-No. 1), No. MC-101010, and No. MC-101010 (subnumbers 1 to 7).

Applicant's annual report to the Commission for the year ended December 31, 1942, shows current assets of $51,623,898 and current liabilities of $29,808,936. Capital and surplus in excess of all liabilities amounts to $163,738,658. It appears that applicant possesses ample resources to meet the obligations with which it might be confronted as a self-insurer, arising out of its operations in interstate or foreign commerce as described herein, without affecting the stability or permanency of its business.

We find that the authority heretofore granted Robert E. Woodruff and John A. Hadden, trustees of the property of Erie Railroad Company, to self-insure operations conducted or proposed to be conducted under No. MC-100604 (Sub-No. 1) and No. MC-101010 (subnumbers 1 to 7), should be vacated and set aside, and that the application of the Erie Railroad Company for authority to self-insure operations conducted under No. MC-101010 (Sub-No. 2 and Sub-No. 4) should be approved.

An appropriate order will be entered.

43 M. C. C.

No. MC-72140 (SUB-No. 8)

FITTERLING TRANSPORTATION CO., INC., EXTENSION OF OPERATIONS-DETROIT-ELKHART

Submitted March 2, 1944. Decided July 11, 1944

Public convenience and necessity found to require operation by applicant as a common carrier by motor vehicle of general commodities, with certain exceptions, between Detroit, Mich., and Elkhart, Ind., over an alternate route, for operating convenience only. Issuance of a certificate approved upon compliance by applicant with certain conditions, and application in all other respects denied.

Ferdinand Born for applicant.

K. F. Clardy and Walter N. Bieneman for protestants.

REPORT OF THE COMMISSION

DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON

BY DIVISION 5:

Exceptions were filed by protestants to the order recommended by the examiner, and applicant replied. Our conclusions differ slightly from those recommended.

By application filed July 30, 1943, Fitterling Transportation Co., Inc., of South Bend, Ind., seeks a certificate of public convenience and necessity authorizing an extension of operations, in interstate or foreign commerce, as a common carrier by motor vehicle of general commodities, except dangerous explosives, livestock, household goods as defined in Practices of Motor Common Carriers of Household Goods, 17 M. C. C. 467. commodities in bulk, those of unusual value, those requiring special equipment, and those injurious or contaminating to other lading, between Detroit, Mich., and Elkhart, Ind., over U. S. Highway 112 from Detroit to the junction of U. S. Highway 112 and Michigan Highway 205, thence over Michigan Highway 205 to the junction of Michigan Highway 205 and Indiana Highway 19, thence over Indiana Highway 19 to Elkhart, and return over the same route. Pursuant to an application filed under the "grandfather" clauses of part II of the Interstate Commerce Act, a certificate was issued to applicant August 6, 1943, authorizing operations as a common carrier by motor vehicle of general and special commodities between certain points and areas in Missouri, Illinois, Indiana, Michigan, and Ohio, over regular and irregular routes. It includes authority to transport

general commodities, with certain exceptions, over several regular routes, the principal ones extending (a) between South Bend and Chicago, Ill., on the one hand, and, on the other, St. Louis, Mo., (b) between South Bend and Fort Wayne, Ind., and (c) between Fort Wayne and Detroit. The other regular routes over which applicant is authorized to operate are chiefly short-cut or alternate routes. Applicant has operated over regular routes between South Bend and Chicago, on the one hand, and, on the other, St. Louis for a number of years. These routes were extended to Fort Wayne when applicant acquired on December 31, 1940, pursuant to No. MC-FC-14361, the rights of Calvert Motor Freight, Inc., to operate over routes between South Bend and Fort Wayne, and between South Bend and Goshen, Ind. Applicant's operations were further extended to Detroit when applicant acquired on February 17, 1942, pursuant to No. MC-FC1716, the rights of the Toledo and Fort Wayne Truck Lines to operate over certain routes, including two between Fort Wayne and Detroit, one of which is by way of Toledo and the other by way of Angola, Ind., and Coldwater, Mich. The route through Toledo is over Indiana Highway 37 from Fort Wayne to the Indiana-Ohio State line, thence over Ohio Highway 2, through Hicksville, Ohio, to Toledo, (also from Hicksville over Ohio Highway 18 to Defiance. Ohio, thence over U. S. Highway 24 to Toledo), thence over U. S. Highway 24 to its junction with U. S. Highway 25, and thence over U. S. Highway 25 to Detroit. The route through Coldwater is over U. S. Highway 27 from Fort Wayne to Coldwater, and thence over U. S. Highway 112 to Detroit. Service is authorized at all intermediate points, in operations over the route through Toledo, and at the intermediate and offroute points of Garrett and Auburn, Ind., Wyandotte, Mich., and all points within 5 miles of Detroit, in operations over the route through Coldwater.

In No. MC-72140 (Sub-No. 4), on April 7, 1943, applicant was issued a certificate authorizing operation as a common carrier of general commodities, with exceptions, over certain alternate routes, one of which extends between Elkhart and Toledo over U. S. Highway 20 and business route U. S. Highway 20. This route, when combined with other authorized routes, gave applicant short routes between Elkhart and points west thereof, including Chicago, on the one hand, and Toledo, and points north thereof, including Detroit, on the other, for the handling of traffic which had previously moved over circuitous routes through Fort Wayne. In the instant proceeding, authority is sought to operate between Elkhart and Detroit over an alternate route through Coldwater which is shorter than the route through Toledo. Applicant does not seek authority to serve any points which it is not now authorized to serve in operations over its present routes.

Applicant transports a substantial volume of traffic between Elkhart and points west thereof, on the one hand, and Detroit, on the other. This traffic is moved over U. S. Highway 20 between Elkhart and Angola over U. S. Highway 27 between Angola and Coldwater, and over U. S. Highway 112 between Coldwater and Detroit, which are segments of applicant's authorized routes. Traffic has been so handled by applicant in the belief that these segments could be combined to form a through route. However, since applicant is not authorized to serve Angola, the only point common to both routes, it follows that applicant may not lawfully operate over the described combination of the two routes. Compare Powell Bros. Truck Lines, Inc.-Purchase-Bryan, 39 M. C. C. 11, affirmed in Byers Transp. Co. v. United States, 49 Fed. Supp. 828. Also see Commercial Frt. Lines, Inc., Extension-Kansas City-St. Louis, 42 M. C. C. 841.

The distance over the proposed route is 170 miles, as compared with 182 miles over the route through Angola and Coldwater, and 186 miles over the route through Toledo. The proposed route will be used chiefly for the transportation of traffic moving between Detroit, on the one hand, and South Bend and points west thereof, on the other. Applicant transports and has transported a substantial volume of freight between these points over the route previously described through Elkhart, Angola, and Coldwater. A study made by applicant, the basis of which was the week ended September 18, 1943, shows that during such period it handled slightly in excess of 200,000 pounds of freight between these points. On west-bound movements 11.3 percent of the tonnage was delivered at South Bend, 42.2 percent at Chicago, and 46.5 percent at St. Louis, while on east-bound movements 23.1 percent of the tonnage originated at South Bend, 60.6 percent at Chicago, and 16.3 percent at St. Louis. Based on the tonnage handled during the period mentioned and on an estimated operating expense of 15 cents per mile, applicant estimates that the use of the proposed route would reduce its operating costs approximately $12,000 per year. In addition, the use of the route would reduce the running time approximately 30 minutes between Detroit and Elkhart. There is no doubt that the use of the proposed route would result in operating economies and expedited service, and would promote efficiency of operation.

Applicant does not attempt to show that existing services of other carriers, of which there are a number, are inadequate. It relies solely upon the fact that it is now effectively competing with other carriers and that the use of the proposed route would enable it to reduce its operating distances between certain points, expedite the movement of shipments, and effect considerable savings in operating costs. Protestants' principal contention, on exceptions, is that applicant's operations between Chicago and Detroit over the route at present used

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