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collective rate making activity. Prior to our consideration of the agreement, applicants were afforded several opportunities to amend their agreement provisions to conform to the standards established by and under section 5a of the act and to present further justification in support of the sought agreement approval. On January 12, 1977, a proposed revised agreement was filed to supplant the prior submissions of an agreement. In the circumstances, only the agreement filed January 12, 1977, will be considered and the prior presentations are deemed withdrawn.

The conference is a nonprofit organization incorporated under the laws of Arizona and domiciled in that State. The place of the principal office of the conference is not shown of record. The purpose of the agreement is to provide a means whereby the signatory member carriers may maintain interstate rates on a just and reasonable basis and eliminate any present, or prevent any potential unjustness, unreasonableness, and undue preference, prejudice, or discrimination.

Applicants believe that a section 5a agreement is not applicable to the activities contemplated, but they have submitted the proposed agreement for approval of the Commission in an over abundance of caution. Membership in the conference and the scope of the agreement is limited to common carrier interstate collective rate making activities between points and places wholly within either Arizona or Nevada. It is not the intent to establish separately interstate rates beyond single-State application, for the reasons hereinafter discussed.

A high percentage of the revenues generated by applicants under conference tariffs ensues from intrastate commerce. Both the Arizona Corporation Commission and the Nevada Public Service Commission exercise complete control over the establishment of intrastate rates within their respective jurisdictions. These State agencies determine and must approve the intrastate rates of applicants before they may become effective. Applicants take the position that it is highly impractical and possibly discriminatory for a carrier to maintain and charge different rates on like traffic between the same points dependent upon whether such traffic moves in intrastate or interstate commerce. As a consequence, the applicant carriers have adopted the practice of adjusting their interstate rates on traffic between points in Arizona, as well as within Nevada, to reflect the intrastate level of rates approved by State regulatory agencies. The only ratemaking on interstate traffic for which intrastate rates are not maintained pertains to the

performance of origin and destination services for containerized shipments of household goods within Arizona. The nature of those services is not further explained.

In view of the conclusions and findings reached hereinafter, a recital of the proposed agreement provisions and determination regarding conformity with section 5a standards is not deemed necessary.

DISCUSSION AND CONCLUSIONS

Section 5a of the act authorizes the Commission to approve, subject to certain conditions, collective rate making agreements between and among motor common carriers engaged in interstate or foreign commerce, and confers upon such carriers relief from the operation of the antitrust laws when making and carrying out the terms of the agreement if it is found that the agreement is in furtherance of the national transportation policy.

The scope of the proposed agreement regarding interstate rate making subject to the jurisdiction of the Commission is limited. to traffic moving either between points in Arizona or between points in Nevada. Under the terms of the agreement, there is no carrier rate making for movements between two or more States. Admittedly, member carrier operations and revenues are primarily intrastate in character. The carriers must obtain the approval of the regulatory agencies of Arizona or Nevada, as the case may be, prior to establishing their intrastate rates within those States. The record shows that applicants adopt the State-approved intrastate rates for application on interstate traffic as factors for constructing combinations of rates on through transportation in interchange service with nonmember carriers to and from points outside Arizona (or Nevada). In other words, the establishment of the interstate combination rate factor is dependent upon the level of the prior approved intrastate rate.

It is not clear how and in what manner the member carriers would be engaged in interstate collective rate making within the meaning of section 5a of the act so as to carry out the procedures of the agreement, including the participation by shippers in the rate making process prior to final determination. Under the practice of applicant carriers, the interstate rate level is already fixed by the intrastate level and there remains nothing further other than for the individual carriers to advise the conference tariff publishing agent to publish the intrastate rates as also having interstate application for their

respective accounts. In such a situation, it is our opinion that the processing of interstate combination rate factors in conformity with the proposed agreement procedures would be one of form and not of substance on the grounds that such rate factors are predetermined at the intrastate level and merely require the ministerial function of tariff publication. We conclude that no showing has been made that section 5a approval of an agreement is necessary or warranted and would be in furtherance of the national transportation policy in respect to the establishment of interstate combination rate factors. We come now to the agreement provisions relating to the joint or collective consideration by the member carriers of rates and charges for the performance of origin and destination services of containerized interstate shipments of household goods in Arizona for which no intrastate rates are maintained. Such services generally constitute an accessorial or terminal service by a carrier as distinguished from line-haul transportation service. Motor carriers are required under the regulatory provisions of the Interstate Commerce Act to make tariff publication of their rates and charges for origin and destination services not included in the line-haul rates and charges. However, such accessorial charges usually are by their nature local to the line performing the service on behalf of either the shipper or the line-haul carrier. As no explanation or justification is presented of a need for member carrier joint consideration of rates and charges for origin and destination services on a containerized household goods at any specified point in Arizona, we are unable to find that the agreement in this respect will be in furtherance of the national transportation policy. Unless such a finding can be made, section 5a requires that the application be denied.

We find that the agreement under consideration has not been shown to be in furtherance of the national transportation policy.

COMMISSIONER HARDIN did not participate.

It is ordered, That the application in this proceeding be, and it is hereby, denied, and the proceeding be, and is hereby, discontinued.

355 I.C.C.

No. 36221

UNITED STATES STEEL CORPORATION v. UNION PACIFIC RAILROAD COMPANY, ET AL.

Decided August 10, 1977

Assailed charges paid on five shipments of iron or steel ingots from Geneva, Utah, to Fairfield, Ala., found to have been unjust and unreasonable. Reparation awarded and proceeding discontinued.

Wayne L. Emery and Kenneth R. Pepperney for complainant. Joseph D. Anthofer and Donal Turkal for defendants.

REPORT AND ORDER OF THE COMMISSION ON RECONSIDERATION

DIVISION 2, COMMISSIONERS HARDIN, O'NEAL, AND CHRISTIAN

BY DIVISION 2:

In a decision served April 20, 1976, the Administrative Law Judge denied complainant's request for reparations and dismissed the complaint in this proceeding. Division 2 affirmed the Administrative Law Judge's initial disposition in a decision and order served November 23, 1976. However, by order served April 20, 1977, division 2 reopened this proceeding for reconsideration upon the present record. Our conclusions differ from those of the Administrative Law Judge.

This proceeding concerns 69 carloads of steel or iron ingots tendered by United States Steel Corporation (complainant or USS) in lots of 12 or more cars and forwarded from its facility in Geneva, Utah to its facility in Fairfield, Alabama, between November 14, 1973 and December 30, 1973, over the lines of the Union Pacific Railroad Company (UP), St. Louis-San Francisco Railway Company (Frisco), and Birmingham Southern Railroad Company (BS). USS paid the single-car commodity rate of $41.41 per gross ton,' minimum 123,200 pounds, pursuant to item 2740-A, TransContinental Freight Bureau, Agent, (TCFB), Tariff 2-K, I.C.C. 1852. 'Rates are stated per gross ton at the Ex Parte No. 299 level.

Although it is not clear from the record, the transcontinental rate apparently applied to these movements under maximum rate application provisions in the absence of a specific commodity rate from Geneva to Fairfield. At the time these shipments moved, complainant's mill at Fairfield was undergoing conversion from open-hearth to basic oxygen furnaces. During the conversion period, USS intended to meet Fairfield's ingot needs from other nearby mills. When those sources proved inadequate, an emergency situation developed which required complainant to make these interplant shipments from Geneva to keep the Fairfield mill operating near capacity.

The single-car transcontinental commodity rate was the only rate available from Geneva at the time the emergency developed. On November 13, 1973, the Western Trunk Line Committee proposed a multiple-car commodity rate of $31.68, minimum 123,200 pounds per car, subject to an aggregate tender of 1,792,000 pounds per shipment, to provide complainant with a rate more in line with those for interplant movements in other territories. However, it became necessary to commence the movements before the rate became effective on January 4, 1974.*

On August 27, 1974, defendants filed a special docket application seeking permission to pay USS the $46,862.58 difference between the charges based on the applicable rate and those based upon the lower multiple-car rate. The special docket application was denied on January 27, 1975. USS then filed a formal complaint on July 28, 1975, alleging that the charges assessed and collected by the defendants on the subject shipments were unjust, unreasonable, and unlawful in violation of section 1(5) of the Interstate Commerce Act. It was this complaint which the Administrative Law Judge dismissed.

DISCUSSION AND CONCLUSIONS

We note that complainant submitted a petition for reconsideration on April 29, 1977. This proceeding was reopened for reconsideration upon the present record, and no further statements were authorized. Therefore, complainant's petition for reconsideration is rejected.

Complainant has the burden of proving the applicable rate unjust and unreasonable. To meet its burden, USS compared the applicable

The rate was established in item 3522-B, Western Trunk Line Committee, Agent (WTL), Tariff 134-Q, I.C.C. A-4620.

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