INVESTIGATION AND SUSPENSION DOCKET No. M-22981 BOOTS, SHOES, AND PAINTS IN NEW ENGLAND

Submitted March 30, 1944. Decided July 27, 1944

1. Proposed changed motor common carrier rates, resulting generally in increases, on boots and shoes, and related articles, between points in New England, and between points in New England and points in eastern New York and northeastern New Jersey, found unjust and unreasonable.

2 Proposed cancelation of motor common carrier commodity rates on boot-andshoe-factory supplies between points in Massachusetts and points in Maine found just and reasonable.

3. Proposed increased motor common carrier classification-exceptions rating and rates on paints and paint materials, in glass containers, between points in New England, and between New England and eastern New York and northeastern New Jersey, found unjust and unreasonable.

4. Order entered requiring cancelation of the proposed schedules to the extent found unlawful, and discontinuing proceedings, without prejudice to the filing of new schedules in conformity with views expressed.

Ralph H. Cahouet, I. C. Bailey, Francis E. Barrett, and Oliver C. Peterson for respondents and motor-carrier associations.

J. E. Hardy for a motor carrier in support of respondents. Warren Price, Jr., Dewey C. Wayne, and Daniel Matthews for the Director of Economic Stabilization and Price Administrator.

Captain Benjamin H. Long for the Secretary of War.

A. W. Whittemore, Maxwell Field, Julius E. Muller, Robert H. 'Adams, Harold C. Brewer, Kenneth J. McAuliffe, Harvey S. Farrow, John J. A. Winzenried, and B. H. Taylor for shippers and shippers' associations.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS AITCHISON, SPLAWN, AND ALLDREDGE BY DIVISION 2:

Exceptions to the recommended order of the examiner were filed by the respondents, and the Director of Economic Stabilization and Price Administrator replied. Our conclusions differ in some respects from those recommended. These proceedings were heard on a consolidated record, and will be considered in a single report.

In the title proceeding, by schedules filed to become effective September 13, 1943, motor common carriers parties to certain tariffs of

This report also embraces I. and S. Docket No. M-2303, Boots and Shoes from New England Points to New York,

The New England Motor Rate Bureau, Inc., the New Hampshire Motor Rate Bureau, and the Maine Motor Rate Bureau, proposed changes, resulting generally in increases in the rates and minimum charges per shipment on boots and shoes, and related articles, and on boot-and-shoe-factory supplies, and increased rates and an increased classification-exceptions rating on paints and paint materials, in glass containers, between points in New England, and between points in New England and points in eastern New York and northeastern New Jersey. Upon protests of the Secretary of War, the Director of Economic Stabilization, the Price Administrator, Panther-Panco Rubber Co., Inc., New England Shoe and Leather Association, and the Auburn Shoe Manufacturers Association, operation of the schedules was suspended until April 13, 1944.

In Investigation and Suspension Docket No. M-2303, by schedules filed to become effective September 24, 1943, the Boston and Maine Transportation Company and Stone's Express Incorporated, motor common carriers, proposed similar changes in their rates on boots and shoes, and related articles, between points in New England and New York, N. Y. Upon protests of the Director of Economic Stabilization and the Price Administrator, operation of the schedules was suspended until April 24, 1944.

The respondents in both proceedings have postponed the effective dates of the suspended schedules to August 1, 1944. Rates will be stated in amounts per 100 pounds, and do not include the general increase of approximately 4 percent which was approved in Increased Common Carrier Truck Rates in New England, 43 M. C. C. 13.

The suspended schedules apply generally within the territory described in appendix A to the report in New England Motor Carrier Rates, 8 M. C. C. 287. In that proceeding, minimum reasonable class and commodity rates, and ratings, were prescribed and, generally speaking, those rates plus the general increase of March 1942, are now maintained by the respondents. On November 1, 1943, the orders previously entered in New England Motor Carrier Rates, supra, were vacated and set aside, and that proceeding was discontinued respecting all issues therein except those relating to class rates, classifications, and rules, regulations, and practices relating to the transportation of shipments of freight at class rates.

For rate-making purposes, the respondents have divided Boston, Mass., into three zones. For convenience of discussion this report does not indicate the particular zones from and to which the rates apply. In most instances, however, the class rates and the proposed commodity rates from and to Boston referred to herein are those to and from Boston zone 1, which includes the Boston postal districts of Back Bay, Charlestown, East Boston, South Boston, and a part of

Roxbury, Mass., as well as parts of Cambridge, Chelsea, Everett, and Somerville, Mass.

Boots and shoes.-The present commodity rates on boots and shoes apply on any-quantity shipments and in some instances on shipments weighing under 12,000 pounds, and the commodity descriptions generally include boots and shoes, moccasins, sandals, slippers, and rubber footwear. The proposed commodity rates would apply on any-quantity shipments, on quantities under 12,000 pounds, and in some instances on shipments from one shipper aggregating 3,000 pounds or more for delivery to one or more consignees. At the hearing, the respondents stated that they would cancel the 3,000-pound minimum and, accordingly, we will not give it further consideration. The proposed commodity descriptions would uniformly include boots and shoes, not otherwise indexed by name in the governing motor classification or rate tariffs, and boots and shoes made of rubber and canvas, felt, or wool combined. Boots and shoes and the other articles included in the present and proposed commodity descriptions will hereinafter be called shoes.

The shipping density of civilian shoes ranges from 5.2 to 15.3 pounds a cubic foot and averages 10.3 pounds a cubic foot. Shoes used by the armed forces have shipping densities ranging from 10 to 21 pounds a cubic foot and average 15.5 pounds a cubic foot. Boots and shoes, not otherwise indexed by name, and boots and shoes made of rubber or rubber and canvas, felt, or wool combined are rated third class in the governing classification. This rating is generally assigned by the respondents to articles which have shipping densities ranging from 10 to 15 pounds a cubic foot.

Truckload shipments of civilian shoes between points in the territory here considered, from one shipper to one consignee, are infrequent. One of the respondents receives from 1,700 to 3,900 pounds of shoes at one pick-up, but they consist of four to nine separate shipments ranging from 80 to 1,320 pounds. Another respondent transports shoes which average 300 pounds per shipment. In some instances full loads of shoes are received at points in Maine and New Hampshire, but they consist of less-than-truckload shipments ranging from 240 to 1,200 pounds. It appears that, on the average, shipments of civilian shoes, from one shipper to one consignee, do not exceed 1,000 pounds.

Army shoes are shipped in truckloads. The War Department ships approximately 28,000,000 pounds of shoes annually to Boston, principally from New Hampshire points and from one point each in Maine and Massachusetts. It takes the position that as its shipments are in truckloads and consist of shoes having a higher density than civilian

shoes, no increase in rates should be approved on its traffic. As previously indicated, the shipping density of civilian and army shoes ranges from 5.2 to 21 pounds a cubic foot. The present third-class rating on shoes appears to be fairly related to their average density. A lower basis of rates on this truckload traffic than on contemporaneous less-than-truckload shipments, however, would appear to be not unreasonable.

The respondents maintain three levels of third-class rates, designated columns B, C, and D. The highest, column B rates, apply on shipments weighing under 6,000 pounds; column C on shipments weighing from 6,000 to 11,999 pounds; and column D on shipments weighing 12,000 pounds and over. The third-class scales which, to the extent hereinafter indicated, are used by the respondents as bases for the proposed rates differ in some instances from their point-topoint third-class rates, because the latter are not in all cases predicated on direct highway distances.

Between points in New England the present commodity rates on shoes apply principally to Boston, and points taking the same rates, from 33 points in Maine, 29 points in New Hampshire, and 2 points in Vermont. In addition, commodity rates are maintained to a few other Massachusetts points, and to Berlin, N. H., from several points in Maine. From New England to New York City, and other points in the New York City metropolitan area, the present commodity rates apply principally from Massachusetts and New Hampshire points and, in addition, from a few points in Maine, Rhode Island, and Vermont. In some instances, the present commodity rates apply in both directions and in other instances they are applicable in one direction only. Nearly all of the present rates include pick-up and delivery services, but a few rates exclude either pick-up or delivery and in some cases both services are excluded.

The present commodity rates are considered by the respondents to be unduly low and to yield less than their cost of transporting the traffic. The proposed adjustment in the shoe rates is designed to yield revenues which are more nearly compensatory. In addition, by the proposed schedules, the respondents would cancel commodity rates between points from and to which little or none of the traffic moves, including certain export rates to New York City, and would establish commodity rates from additional Maine origins to the New York City metropolitan area. The present and proposed rates and the short-highway distances between representative points are shown in appendix A.

Some of the outstanding irregularities in the present adjustment are rates of 53 cents from Bellows Falls, Vt., and from Pittsfield,

Maine, to Boston, 108 and 216 miles, respectively; 58 cents from Old Town, Maine, to Boston, 245 miles, and 90 cents from Nashua, N. H., to New York City, 235 miles; and $1.11 from Pittsfield, N. H., and $1.01 from Old Town to New York City, 277 and 466 miles, respectively.

In support of their position that the present rates are unduly low, the respondents compare the present rates on shoes with operating costs ranging from 43.5 cents to $1.25 per 100 pounds for distances ranging from 40 to 360 miles. The submitted costs are for transporting a full load consisting of shipments weighing less than 3,750 pounds each and having a shipping density of 12.5 pounds a cubic foot. These expenses are 160 percent of the costs computed in 1938 and 1939 on shipments of general commodities weighing 20 pounds a cubic foot. They are said to include the expense incurred at the carriers' terminals, expense of pick-up and delivery and line-haul transportation, and, in addition, a return of 6 percent on the carriers' investment in motor vehicles only. The underlying data respecting the submitted costs were not made available for the record. The record does not establish that the expense incident to the transportation of general commodities is representative of the cost of transporting shoes. The proposed rates have several separate bases. From Maine, New Hampshire, and Vermont points to Boston, and points taking the same rates, the proposed any-quantity rates are the same as the thirdclass, column D, rates for distances under 90 miles; 95 percent of the third-class, column D, rates from 90 to 115 miles; 90 percent from 116 to 140 miles; 85 percent from 141 to 165 miles; and 80 percent for distances over 165 miles.

From points of origin in Maine to destinations in Massachusetts, except Boston, the proposed any-quantity rates are the same as the third-class, column D rates.

From Maine and New Hampshire to certain sections of New York City, namely, lower Manhattan, from the Battery to Fifty-ninth Street and northwestern Brooklyn, the proposed rates, which for the most part, would apply on shipments weighing under 6,000 pounds or under 12,000 pounds, are the sums of the proposed rates to Boston and from the carriers' terminals in Boston to lower Manhattan (from the Battery to Twenty-third Street).

From the carriers' terminals in Boston and Worcester, Mass., the proposed commodity rates are 69 cents, any quantity, to Manhattan (from the Battery to Twenty-third Street); and 85 cents, on shipments weighing under 12,000 pounds, to Manhattan (from Twentythird to Fifty-ninth Streets). The proposed 69-cent rate was constructed by adding 1 cent to the average of the point-to-point thirdclass, column D, rates from Boston and Worcester to lower Manhattan,