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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.
Lze, 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, & 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 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.
Lze, 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, (6) 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 simil. arity 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 distri. bution 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.

III

Finding 8 which approves a differential either of 15 percent under the corresponding class rates or 85 percent of first class as reasonable for assembling rates (the report is not clear as to which basis will become effective) finds no support in the report. The report states, “No question concerning the measure of the rates is involved." In my opin- . ion, the approval of the differential is tantamount to a finding as to the measure of the rates.

Section 408 provides that assembling and distribution rates and charges which differ from other rates or charges contemporaneously applicable must be justified "by a difference in the respective conditions under which such instrumentalities or services are employed or utilized.” Whether any or a particular differential is lawful based only on the physical differences in the service performed by the car. rier has not been proved in this proceeding. Findings 4, 5, and 6 are the support for the differential approved by the majority. A discussion of these findings follows.

Finding 4.–This finding, in my opinion, is unrealistic. This proceeding is a test case. When this report is issued, other carriers may be expected to establish competitive rates, and solicitation of business will follow which will necessarily result in solicitation expense.

Finding 6.—The accumulation of claims against a carrier will not be, and is not, peculiar to shippers of shipper associations receiving the benefit of the assembling or distribution rates. Freight bill auditing companies, traffic bureaus, and others perform the same service for other shippers and shipper associations. Furthermore, each claim must be separately adjusted by the carrier, and any substantial reduction in cost from the mere presentation of numerous claims by one organization on behalf of numerous shippers is not apparent.

Finding 6.—The concentration of numerous less-than-truckload shipments for delivery at one time in order to save delivery costs, is commonplace in motor-carrier operations. It is my understanding that many large receivers of less-than-truckload or less-than-carload shipments insist that this be done in order to avoid congestion of their shipping facilities, and good management on the part of the carrier would require that it arrange its delivery service so as to provide the minimum number of deliveries to a consignee or to a group of consignees at the same location.

I am authorized to state that COMMISSIONER MAHAFFIE joins in this expression.

COMMISSIONER ROGERS did not participate in the disposition of this proceeding.

581984-45— Vol. 43-- -86

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