Wallace Common Carrier Application, 26 M. C. C. 827; 29 M. C. C. 828. Westwood Transp. Co., Lincoln Tunnel Extension, 12 M. C. C. 184. See Westwood Transp. Lines, Inc., Lincoln Tunnel Extension, 12 M. C. C. 184. See Lincoln Tunnel Applications. Page 307 W. H. Tompkins Co. Common Carrier Application, 42 M. C. C. 349------ 210 Worcester Storage Co. Broker Application, 30 M. C. C. 87.. Zimmerman, Lucy F., Administratrix, Extension of Operation—Michigan, 52 579 331 436 33 33 43 M. C. C. INTERSTATE COMMERCE COMMISSION REPORTS-MOTOR CARRIER CASES No. MC-15003 HENRY J. FRIEDMAN BROKER APPLICATION Submitted October 12, 1942. Decided November 3, 1943 On further hearing, continuance of operation by applicant as a broker of transportation by motor vehicle found not consistent with the public interest and the national transportation policy. Findings in prior report, 30 M. C. C. 514, denying the application, affirmed. Isadore H. Schwartz for applicant, and other appearances shown in prior report. REPORT OF THE COMMISSION ON FURTHER HEARING DIVISION 5, COMMISSIONERS LEE, ROGERS, AND PATTERSON BY DIVISION 5: Exceptions to the order recommended by the examiner on further hearing were filed by protestant, and applicant replied thereto. Our conclusions differ from those recommended. By application filed February 6, 1936, as amended, Henry J. Friedman, of Philadelphia, Pa., doing business as O. Henry & Co., seeks a license authorizing operation as a broker of transportation by motor vehicle of general commodities, except those of unusual value, and except livestock, explosives, commodities in bulk, those requiring special equipment other than refrigeration, and those injurious or contaminating to other lading, in interstate or foreign commerce. carriers in trunk-line territory oppose the application. Rail In the prior report herein, 30 M. C. C. 514, we found that applicant had failed to show that his operation in the manner described as a broker of transportation would be consistent with the public interest and the national transportation policy and entered and order denying the application. Thereafter, on petition of applicant, the prior order denying the application was vacated and set aside, and the proceeding reopened for further hearing. As stated in the prior report, applicant entered the brokerage business in 1931. Since that time he has maintained an office in Philadelphia, and by personal solicitation and advertising has regularly arranged for the transportation of general freight moving between Philadelphia and points within 10 miles thereof, on the one hand, and points in Delaware, Pennsylvania, New York, New Jersey, Massachusetts, Connecticut, Maryland, Virginia, and the District of Columbia, and the other. Applicant operates no motor-vehicle equipment and routes traffic only over the lines of duly authorized common carriers. However, he performs a comprehensive service for shippers who patronize him. He advises them with respect to the routes, rates, and packing requirements of the motor carriers which he may select for a given service, and in case of loss or damage, prepares their claim papers. He checks carriers' insurance policies to be sure the shipper is amply protected, watches c. o. d. collections to be sure that they are remitted promptly, and advises when shipments should or should not be consolidated to obtain the lowest rate. In some instances he supplies blank bills of lading to shippers. In some cases carriers are instructed to bill applicant, rather than the shipper, for their freight charges. In such instances applicant checks the rates and presents the shipper with one itemized bill covering a number of shipments, thus simplifying the shippers' handling. For all shippers, applicant apparently undertakes the responsibility of checking carriers' freight bills to ascertain whether the proper charges have been assessed. The consensus of the testimony by representatives of the seven shippers introduced at the original hearing was that the applicant relieved them of detail work incidental to the transportation of their products and was a convenience to their business. None of these shippers, however, pays applicant anything for these benefits. It is agreed by the parties that applicant's operations, so far as they relate to the services performed for shippers, are accurately described in the prior report. The evidence developed at the initial hearing, however, did not establish that applicant performs any service for motor carriers other than solicitation. The motor carriers represented at the further hearing were (1) Mike Tose and Louis Tose, doing business as Norristown Motor Freight, who operate 72 pieces of equipment and are authorized to transport general commodities from Bridgeport, Pa., and points within 20 miles thereof to New York, N. Y., and points in New Jersey within 35 miles of New York, (2) Joseph G. Whinney, Jr., doing business as Whinney's Express, operating 53 pieces of equipment, having terminals in Syracuse and Binghamton, N. Y., Philadelphia, Baltimore, Md., and Washington, D. C. (3) Wooleyhan Transport Com pany, operating about 100 vehicles, and maintaining terminals at Newark, Wilmington, Philadelphia, and Baltimore, and (4) Owl's Transportation Company, Inc., operating 16 vehicles, and maintaining service for the transportation of general commodities between Philadelphia and points within 15 miles thereof, and Cape May and Ocean City, N. J., and points within 10 miles thereof, with service on specified commodities from and to certain additional points. These carriers and 2 additional lines, Jones Motor Company and Miller Transport Company, are the carriers with which applicant now has agreements respecting compensation for brokerage service. The services of the several carriers clearly are competitive in certain respects. In general, the representatives of the carriers indicate that payment of brokerage fees to applicant for business obtained by him. is entirely satisfactory. In one instance, the carrier restricts such payments to the traffic of shippers who were not previously customers served by the carrier. Another of the carrier witnesses indicated that the business of his company had "dropped off to nothing and we surely could use this business that Mr. Friedman could get for us." Another explained that a "one-way operation is not very good, and it was possible for him to give us some loads that we could realize and make a profit on "The solicitation performed by applicant resulted in new business for a carrier which does not employ full time solicitors; enabled another carrier to transport more freight where its sales force was not large enough to take care of the amount of business, without some help; and regained an account for one carrier which does not employ solicitors. * With the exception of Norristown Motor Freight and Miller Transport Company, the carriers follow the practice of forwarding their freight bills to applicant for payment of the charges on all shipments procured by him. The two carriers last mentioned bill applicant's customers directly, and the customers make direct payment to the carriers. Other than the two methods of settling the freight charges, the services performed for each of the carriers are identical; a brokerage fee of 10 percent of the freight charges is uniformly assessed. The arrangements are oral in each instance, and have been in effect with one carrier since 1934 and with four of the others since 1939 or prior thereto. Applicant urges that the development of new business and the furnishing of solicitation services in connection with traffic of his present accounts result in economic benefits to the carriers. It is also contended that the various services to shippers are not separate and distinct functions or duties, unrelated and apart from the services he performs for and on behalf of the carriers by whom he is compensated. Services rendered in the settlement of freight charges for all of his "accounts" in lump sums in lieu of separate billing by the carriers, and the inspection and other services rendered in connection with adjustment of loss and damage claims are cited as benefits to both shipper and carrier. It is observed in this connection, however, that the practice followed in payment of the freight charges has not been adopted by all of the carriers with whom arrangements are in effect, and that the occasions on which assistance is given in the adjustment of a claim are infrequent. Comment may also be made that delegation to applicant of the right to make inspection of damage to shipments on behalf of the carrier may be of doubtful propriety. It is clear that applicant renders services of consequence to each of the shippers supporting the application. His operations, in fact, seem to meet the principal needs of the shippers so far as routing of traffic, verification of rates, payment of freight charges, and adjustment of claims are concerned. The performance of substantial services of this character clearly exceed the duties of the carriers providing the actual transportation. Manifestly, applicant is entitled to compensation for his services to the shippers who characterize the services as very satisfactory and very valuable. The record does not establish that the consideration. on the part of the shipper is in the form of permission to control the routing of the traffic involved. The circumstances as a whole, however, are such that any other conclusion does not appear to be justified. Applicant's service includes the furnishing of blank bills of lading to the shippers for use in tender of their traffic to the carriers. These blank bill of lading forms bear the instruction to the carrier to "Please send freight bills to our trans. broker, Henry J. Friedman, 5630 Woodbine Avenue, Philadelphia, Pa." Four of the carriers, with whom arrangements are maintained, observe such instruction and accept payment of their charges through applicant with a deduction by applicant of 10 percent for brokerage fees. We are of the view that the additional evidence submitted on further hearing does not warrant the conclusion that applicant performs any consequential service for the carriers other than solicitation. There is no legal obstacle to a broker's collecting reasonable compensation for his services from the carriers receiving shipments from him, provided such services redound to the benefit of the carrier or are actually part of the transportation service covered by the carrier's rates. Copes Broker Application, 27 M. C. C. 153. In addition, however, if it is apparent that an applicant renders important services which are beneficial only to shippers and which are no part of the transportation undertaken by the carriers, any acceptable plan of operation must contemplate the payment by the shippers of reasonable compensation therefor. To permit a broker, while collecting from a carrier no |