37 FR 23908, Nov. 10, 1972, Part 1005: Principles and Practices for the Investigation and Voluntary Disposition of Loss and Damage Claims for Processing Salvage, second paragraph of $1005.3 and §1005.4(c) revised, effective Oct. 16, 1972.

Liability of Carriers

30. In general.--Plan I TOFC operations are valid through-route and joint-rate arrangements between connecting carriers and it necessarily follows that the respective liabilities of the participating carriers are to be governed by §§ 20(11) and 20(12). Under § 20(11), the initial carrier is liable to the shipper for all damage or loss, whether caused by it or not, on the theory that in accepting the shipment under the through joint rate it becomes a principal and all its connecting carriers agents for the transportation; and § 20(12) provides a "right over" in order to insure that the ultimate burden falls upon the carrier responsible for the loss. Nor can the Commission accept as seriously made the contentions of the freight forwarders to the effect that a railroad cannot assume responsibility to an unknown shipper. Prior to enactment of part IV, shippers by freight forwarder had for many years been allowed to sue the underlying carriers for loss or damage occasioned by the latter.--Substituted Service--Piggyback, 322 I.C.C. 301(346)*.

In meat packer's action to recover for damage to fresh hams shipped under a rail bill of lading containing notation that goods were received in "apparent good order," such recital in the bill of lading establishes a prima facie case that the goods were delivered to carrier in good condition when, upon delivery to carrier, contents of the shipment are open to visible inspection; however, where merchandise is sealed in a trailer, and the contents are not open and visible, plaintiff must establish by direct evidence that its goods were delivered to the carrier in good order. Therefore, when plaintiff loaded the loose hams on racks on top of each other, about five or six layers high, inside a "piggyback" trailer which was delivered sealed to the railroad, and contents of trailer were not open and visible to the carrier, the "apparent good order" bill of lading notation did not meet shipper's burden of showing that the hams were delivered to the railroad in good condition. Judgment for defendant.--Blue Bird Food Products Co. v. Baltimore & O. R. Co., 329 F. Supp. 1116(1117-8).

$20 (12) RECOVERY BY INITIAL CARRIER FROM CONNECTING CARRIER

1. Recovery over by initial carrier.--Plan I TOFC operations are valid through-route and joint-rate arrangements between connecting carriers * * *. See §20(11), n. 30, above.

$203(a)(19). "SERVICES" AND "TRANSPORTATION"

2. Transportation defined.--Applicant seeks authority to transport liquid gilsonite sealer and its proposed service includes a spreading service performed from the same vehicle which performs the line-haul movement. Prot

estants contend that we cannot consider the spreading service, in passing upon the application, because it is a nontransportation service unrelated to the over-the-road transportation. Under §203(a)(19) of the act the term transportation has a broader meaning than the mere carriage of persons and goods from place to place, since it embraces a variety of connected services as well. Thus, it includes services performed at origin points while a line-haul movement is in progress; and services performed at destination points, after a line-haul movement has been completed. Services which are necessary and incidental to the line-haul transportation come within the definition of transportation and services contemplated by §203 (a) (19) of the act. It is clear on this record that spreading the sealer on the surface is the most feasible means of accomplishing the delivery of this commodity. We see no reason to force shipper to make private arrangements for any other methods of delivery when applicant seeks to fulfill shipper's requirements by expeditiously providing the complete service shown to be needed.--W. S. Hatch Extension--11 States, 108 M.C.C. 853(860,862). (but see dissent).

The fact that protestants have chosen not to perform this spreading service does not prevent it from being a transportation service, for under the act it is clear that transportation services can include those services which carriers are not legally obligated to perform as part of the line-haul movement. This does not mean, however, that we will certificate every applicant who proposes to render any additional service beyong the line-haul movement, for we are aware that some applicants might devise schemes to offer novel and unneeded services as a means of gaining entry into the business of for-hire motor transportation. Accordingly, before we will certificate an applicant proposing extra services beyond the linehaul transportation, we will satisfy ourselves that those services are neoessary and incidental to the line-haul operation. The determination of what is a necessary and incidental service can vary with the facts of each particular case, so that we will be obliged to scrutinize each application on its own merits.--Id., 861.

§203(b) VEHICLES EXCEPTED FROM OPERATION OF LAW

2. Construction and interpretation.-In enacting P. L. 90-433 referring to $203 (b5) of part II of the act dealing with the exemption from economic regulation accorded motor vehicles controlled and operated by agricultural cooperative associations or federations, and although the Congressional amendment does not confer specific authority on the commission to prescribe rules and regulations to implement the amendment, Congress recognized that proper administration of the amendment would require promulgation by the commission of implementing rules and regulations. Thus the legislative history of P. L. 90-433 obligates us to establish reasonable and necessary rules and regulations designed to implement its requirements.Implementation of Public Law 90-433--Agricultural Cooperative Transportation Exemption, 108 M.C.C. 799 (804).

40. Transportation incidental to aircraft transportation.--Applica performs collection, delivery and transfer services within the Philadelphia

air terminal on behalf of an air freight forwarder. Approximately 5 percent of the traffic collected by applicant which is indeterminable at the time of collection and which is turned over to the forwarder does not move from the Philadelphia Airport by air, but is transshipped by motor vehicle in applicant's service pursuant to its certified authority. This application was filed for operating authority for this small portion of traffic handled by applicant with an accompanying motion to dismiss on the ground that the proposed operation is exempt from economic regulation pursuant to §203(b) (7a) of the act. The Commission found that as long as applicant believed in good faith that the motor segment of the total service involved is but a part of a continuous motor-air movement, then the cover of the partial exemption is maintained.--Application dismissed.--Airline Freight, Inc., Extension--Philadelphia Air Terminal Area, 108 M.C.C. 197(199,201).

Section 203(b) (7a) permits substitution of motor-for-air transportation only in situations resulting from emergency conditions. Thus, only emergency situations or conditions resulting from causes beyond the control of the direct air carrier, and not those stemming from causes beyond the control of the air forwarder or motor carrier can bring substituted motor-for-air service within the ambit of the partial exemption. Therefore, overbɔoking of space by the direct or indirect air carrier does not create the type of "emergency" situation contemplated by the regulations. To determine otherwise would open the door to practices whereby an air freight forwarder might knowingly tender to an air carrier traffic in excess of the latter's space capacity, and then claim the benefits of the partial exemption to have the traffic move in unregulated surface transportation. This situation would be virtually unpoliceable, and the possibility of abuse far outweighs any benefits to be gained from a contrary construction.--Id., p. 202, 203.

45. Operation by or for agricultural cooperative associations.-Pursuant to the enactment of P. L. 90-433 amending §203 (b5) of the act dealing with the exemption from economic regulation accorded motor vehiélès controlled and operated by an agricultural cooperative association or federation of such associations, the commission promulgated the following regulations to implement the Congressional enactment: $220 of the act was amended by the addition of subsection (g) which specifically authorized the commission to inspect the books and records pertaining to motor vehicle transportation of certain cooperatives and federations; computation of tonnage in nonfarm-nonmember transportation allowed to be transported in any fiscal year by a cooperative association or federation of cooperative associations; overall limitation of nonmember transportation for compensation in any fiscal year; notice to the commission of intent to perform nonmember transportation; time for filing and information required; form BOP 102 prescribed for use by those filing such notice.--Implementation of P. L. 90-433--Agric. Coop. Exemption, 108 M.C.C. 799 (803,848,849).

This proceeding was instituted to prescribe regulations that will provide useful guidelines for those who seek in good faith to operate pursuant to the exemption from economic regulation which $203 (b5) of the

act, as amended by P. L. 90-433, effective July 26, 1968, accords to motor vehicles controlled and operated by an agricultural cooperative association or by a federation of such associations. These regulations are not allinclusive and are not intended to displace established administrative and judicial precedent respecting pseudo-cooperatives or the meaning of the statutory phrase "motor vehicles controlled and operated by" appearing in §203 (b5). These are matters which may in the future properly be made the subject of supplemental rulemaking processes the need therefore later appear.--Id., p. 826.

55. Transportation under common control, management, etc.-See also Illinois-Calif. Express-Purchase--Ariz.-Utah Express, at 95(2), n. 45.

60. Commercial zones.

Municipality: Applicant seeks a determination by the commission that the Tri-City Regional Port District, Madison County, Ill. either constitutes a municipality which has a commercial zone, or is an unincorporated urban community such that carriers authorized to serve the District may also serve adjacent territory or establish a terminal area including points outside of and adjacent to the District, i.e., St. Louis, Mo.-East St. Louis, Ill. commercial zone as defined by the commission. The District was created by the General Assembly of the State of Illinois, and it was designated as a political subdivision, body politic and municipal corporation for the purpose of promoting industrial, commercial and transportation activities and has powers commensurate with these goals. However, the District does not have the usual powers or privileges normally attributable to local government of a bona-fide municipality. Therefore, the District is not a municipality of the character contemplated by §203 (b)(8) of the act and, accordingly, does not have an adjacent commercial zone.--Truck Transport, Inc., Petition for Declaratory Order, 108 M.C.C. 183(185, 187).

The District is controlled by a corporate entity, but is not self-governed like the usual unincorporated urban communities. Therefore, the Tri-City Regional Port District is not a "municipality" or an "unincorporated urban community", and authority to provide service from said District cannot be construed as authority to provide service from an area surrounding the District either as a commercial zone or as a terminal area. The authority to provide service from the District is territorial, encompassing all points within the District, but such authority cannot be construed to serve points which are beyond the defined limits of the District, even though such points are so adjacent to a municipality located in the District as to be within the commercial zone of such municipality.--Id., p. 188, 189.

An unincorporated urban community has been construed by the Commission to mean those settlements or aggregations of homes and businesses which, although unincorporated and without local governments or definite

corporate limits, nevertheless are similar from a transportation standpoint, to the cities, towns, villages and boroughs which are contemplated by the term "municipality." Within such communities and within the adjcent "terminal areas" contemplated by $202 (e) transportation by motor vehicle in bona fide collection, delivery and transfer service incidental to line-haul transportation is performed.--Id., p. 188.

$204 (b). CLASSIFICATION OF MOTOR CARRIERS

7. Classification of carriers; commodity basis.--Although liquid gilsonite asphalt sealer is not listed in the appendix to the report in the Description case, 61 MCC 209, on further hearing liquid gilsonite asphalt sealer was found to be a petroleum product because the manner of processing, other than handling in solid form and dewatering, and the refining technique used in processing gilsonite industrially is identical to that used for petroleum and the refining of gilsonite by the usual petroleum refinery processes produces similar refinery fractions. Thus, carriers authorized to transport "petroleum products" may transport liquid gilsonite asphalt sealer.--W. S. Hatch Co. Extension--11 States, 108 M.C.C. 853 (858,859)*.

$204(c). INVESTIGATION OF COMPLAINTS; ORDERS

52. Complaints.--Supporting shipper, a manufacturer of chemicals and fertilizers, supported 26 applicants for authority to transport chemicals and fertilizers. Shipper now supports applicant because it alleges that many of the authorized carriers do not have proper equipment available to transport its commodities. A shipper that supports a successful applicant should not be foreclosed from obtaining adequate transportation services elsewhere if it can show that the carrier granted authority has not produced the expected service and that a need still exists. However, the fact a shipper successfully supports the granting of authority to as many as 26 carriers and still does not obtain service to its satisfaction, raises a question as to the efficacy of our application procedures. While we are not pursuaded that the shipper has a need for additional motor carrier service, we will direct our field staff to investigate the unsubstantiated allegations of the shipper with a view to determining whether a formal investigation proceeding should be instituted, and whether there has been a trifling with our application procedures.--Umthun Trucking Co., Extension-Colorado, 108 M.C.C. 669(674,675)*.

251. Entry of order.--The examiner found that respondent has been conducting unauthorized transportation of new store fixtures under its household goods authority in violation of $206(a) of the act, and recommended the entry of a cease and desist order contingent and effective upon any subsequent denial of the application for and the termination of temporary authority operations corresponding to those found to be unauthorized under the presently held authority of respondent. After notice and hearing in an investigation proceeding, upon finding that a motor carrier has not complied with the