In No. MC-77477, Monticue Lines, Inc., Common Carrier Application, 42 M. C. C. 839, decided May 15, 1943, division 5, on further hearing, found that respondent herein was entitled, under the "grandfather" clause of section 206 (a) of the Interstate Commerce Act, to continue operation as a common carrier by motor vehicle of sugar from Baltimore, Md., to points in specified portions of Ohio, West Virginia, and Pennsylvania. Issuance of a certificate of public convenience and necessity authorizing only that service was approved, and the application, which sought much broader authority, was denied in all other respects. The rates here under investigation are maintained by respondent for a transportation service which it has no authority to perform. They are accordingly unlawful and should be canceled.

We find that the rates under investigation are unlawful because respondent is without authority to perform the transportation for which they are maintained. An order will be entered requiring their cancelation and discontinuing the proceeding.

43 M. C. C.

No. MC-68902

RUSSELL CHRISTIAN NEWKIRK CONTRACT CARRIER APPLICATION

Decided January 11, 1944

1 On reconsideration, findings in prior report, 29 M. C. C. 814, affirmed. Applicant's operation found to be that of a common carrier.

2 Applicant found entitled to continue "grandfather" operation as a common carrier by motor vehicle of general commodities with certain exceptions between Philadelphia, Pa., on the one hand, and certain points in Hunterdon, Mercer, Middlesex, and Monmouth Counties, N. J., on the other, over irregular routes. Application denied in all other respects.

& Proceedings kept open for a period of 60 days to enable applicant, if he so elects, to file a petition asking that his certificate in No. MC-59721 be revoked; and that a permit be issued herein authorizing operation by applicant of a strict parcel delivery service as a contract carrier.

Appearances as shown in prior report.

REPORT OF THE COMMISSION ON RECONSIDERATION

BY THE COMMISSION:

This proceeding involves an application filed under the "grandfather" clauses of sections 206 (a) and 209 (a) of the Interstate Commerce Act. Briefly stated, applicant, who has a terminal at Audubon, N. J., is performing a retail-store delivery service between Philadelphia, Pa., on the one hand, and certain points in New Jersey, on the other. In the prior report herein, 29 M. C. C. 814, division 5 found such operations to be those of a common carrier by motor vehicle, and granted applicant a certificate authorizing him to continue operation as a common carrier by motor vehicle, of general commodities, with certain exceptions, between Philadelphia, Pa., on the one hand, and, on the other, Audubon and certain points in Hunterdon, Mercer, Middlesex, and Monmouth Counties, N. J., over a described regular route between Philadelphia and Audubon, and thence over irregular routes. By an order of June 14, 1941, the application in all other respects was denied.

Upon applicant's position, we reopened the proceeding for further consideration upon the record as made, and vacated and set aside the order of June 14, 1941. The only issue raised by the petition is whether applicant's described operations are those of a common or contract carrier by motor vehicle.

The pertinent facts with respect to the operations covered by the instant application will be restated briefly. Applicant has been operating continuously since 1919. On July 1, 1935, he owned and used 10 vehicles. As of the date of hearing, 14 vehicles were in service. He filed 2 applications on the theory that he was rendering 2 types of service, namely a retail-store delivery service covered by the instant application and a general commodity irregular route service, covered by the other application. The latter application sought authority between Philadelphia, and Camden, N. J., on the one hand, and, on the other, Lambertville and Asbury Park, N. J., and points in New Jersey south of a line beginning at Lambertville and extending in an easterly direction to Asbury Park. A certificate, No. MC59721, covering the latter operation was issued to him on November 26, 1940.

Since before the statutory date, applicant has engaged in a service of consolidating the handling and delivery of parcels for retail stores. This service has been performed under both written and oral contracts. Applicant has served almost every kind of retail store, and classifies the different types of retail stores that he will serve as apparel stores, department stores, food stores, jewelry stores, radio and musical instrument stores, sporting-goods stores, dental-supply houses, mail-order establishments, and optical, medical and biological service establishments. He limits this service to packages weighing 60 pounds or less and varies his charges according to the volume of traffic received from the store. Applicant's trucks call at the stores under contract every day, and he assumes responsibility for delivery of the goods to the ultimate consumer, often making as many as three "call-backs" where there is no one home on the first attempt at delivery. In some cases, his drivers leave the parcel behind the customer's door or with the next-door neighbor.

The territorial scope of the operation is not seriously questioned. Applicant, since prior to the "grandfather" date, has transported the commodities dealt in by these retail stores from Philadelphia to points in Hunterdon, Mercer. Monmouth, Ocean, Middlesex, Burlington, Atlantic, Camden, Gloucester, Salem, Cumberland, and Cape May Counties, N. J. There is no back haul, except returned, exchanged, or rejected merchandise, and fur coats for summer storage.

Applicant's claim, that his operations in this type of service are those of a contract carrier, is based on the proposition that he cannot, as a practical matter, conduct them as a common carrier, mainly because, as a common carrier, it will be necessary to issue a bill of lading for each and every package, regardless of how small. This would involve a substantial amount of time and clerical work, since

single shipper may have from 300 to 1,000 small packages daily for transportation.

Physically, the service rendered by applicant requires nothing unusual in the way of equipment, but it does require, and applicant furnishes, employees specially trained to insure courteous and proper delivery, even when the customer is not at home, of numerous small packages in a manner to encourage continued patronage for the consignor. Though the number of shippers served is greater than would generally be consistent with a contract-carrier status, applicant, nevertheless, becomes virtually a part of the retail organization of each of the shippers he serves. However, in determining applicant's true status, the service conducted under the certificate he now holds must be considered along with the parcel delivery service, because both are rendered together, and it is difficult to distinguish between them. Applicant will transport a shipment as a common carrier for the same shipper that he serves in retail-store delivery under contract, and carry it at the same time and in the same truck. For instance, if a department store, which applicant serves under contract, tenders a cedar chest weighing more than 60 pounds along with its regular parcels, the cedar chest admittedly moves in common carriage, while applicant urges that the parcels move in contract carriage. Another example is a situation where a customer will send back a fur coat for storage to the store where it was purchased, for which store applicant renders parcel delivery service. Applicant urges that that is a contract-carrier movement, but that if the customer no longer does business with that store, and sends the coat to another store with which applicant has no contract, then, according to applicant's view, the same movement becomes common carriage. Thus, it seems that the two distinctive factors, to applicant's way of thinking, are whether the package weighs over 60 pounds, and whether applicant, at the time the shipment moves, has a contract for parcel delivery service with the particular store involved.

Standing alone, parcel delivery service has many of the attributes of contract carriage. It is only when it is confused with commoncarrier service that it seems to lose all semblance of contract carriage. In Classification of Motor Carriers of Property. 2 M. C. C. 703. we recognized carriers engaged in retail-store delivery service as renderng a "specialized service." In United Parcel Service of Pa., Inc., Contr. Car. Application, 10 M. C. C. 83. 20 M. C. C. 799. and 22 M. C. C. 243. the applicant had contracts with four of the largest Philadelphia department stores and (like applicant herein) proposed to transport their merchandise to customers, and, if necessary, return unaccepted shipments. There was much less doubt as to the carrier's contract-carrier status, in that case, because it was there

proposed to take over the equipment and personnel of the delivery departments of these stores. In McGugan Contract Carrier Application, 10 M. C. C. 793, the applicant was given a permit for "department store merchandise", but here again the arrangement was for the store to turn over to the carrier its truck and entire delivery service. In these two instances, the service unquestionably is specialized, since it includes a complete delivery service, which could not so efficiently be performed by a common carrier. In the instant case, applicant has served a large variety of stores, but will enter into a contract for continuous retail delivery only when the store will provide a fair volume of packages which do not weigh in excess of 60 pounds. Applicant's service is much broader than that of either of the above-named carriers. When his service is viewed as a whole, it is obvious that the distinction which he makes between the parcel delivery service and the admitted common-carrier service is not founded on any factual difference in the character of the transportation. Applicant has no particular desire to be a contract carrier, but merely wants the type of authority that will permit him to continue successfully the parcel delivery service. Because of the detail of preparing a bill lading for each parcel and the publishing of a tariff, he believes he will not be able, as a common carrier, to compete with contract carriers for this business. In order to be attractive to the retail stores, the service must be highly flexible, and exactly as though the stores themselves were conducting their own delivery service. Were it not for the operations conducted under the certificate which applicant holds, it would be a simple matter for applicant to restrict his parcel delivery service to contract carriage similar to the type considered in United Parcel Service of Pa., Inc., Contr. Car. Application, supra.

Assuming that, as he claims, applicant has actually conducted two types of service, one as a common carrier and the other as a contract carrier, it would be necessary to determine the question of dual operations, since in each instance, the same territory and commodities are involved. If the certificate which applicant now holds were, as he suggests, limited to shipments in excess of 60 pounds, that would not remove the possibility of discrimination between shippers, and where such possibilities exist, dual operations may not be allowed, even though it is quite evident that the carrier intends no discrimination. Because of our finding herein, however, we are not called upon to determine that question. We merely point out that the circumstances would seem not to justify a finding permitting dual operations, even if we were able to find that the parcel delivery service is contract carriage.