FIRST ALTERNATIVE SOUGHT BASIS For the 2,533.218 pounds of meal--- [Same as in complainants' primary sought basis.] For the 2,725,732 pounds of excess moisture $25,408.17 25,049.48 [Applying to such weight a "reasonable" rate of $18.38 NT.] No charge 50,457.65 For the 425,830 pounds lost in transit Total- The $18.38 NT "reasonable" rate used by complainants in making this computation is stated to reflect the overall weighted cost of the railroads in handling the 52 carloads over the various routes of movement. [Applying to such weight the same "reasonable" rate of $18.38 NT applied to the 2,725,732 pounds of excess moisture.] Total 54,371.02 THIRD ALTERNATIVE SOUGHT BASIS Complainants set out an alternative basis in which adjustment would be made to reasonable charges of $52,243.13, arrived at by applying the above-mentioned "reasonable" rate of $18.38 NT to the total origin scale weight of 5,684,780 pounds. FOURTH ALTERNATIVE SOUGHT BASIS Complainants state that the Commission may want to order adjustment to basis of charges of $50,523, which is stated to be equivalent to defendants' out-of-pocket costs as determined by witness Corbin. FIFTH ALTERNATIVE SOUGHT BASIS Complainants state that the Commission may want to order adjustment to charges of $57,615.25, which is stated to be equivalent to defendants' out-of-pocket costs as determined by witness Corbin with a certain amount added thereto. Complainants also seek waiver of that portion of the demurrage charges assessed against them which exceeds the per diem rates for the cars used, plus a reasonable fee for administration. This claim is based upon restrictions imposed on Petrou Fisheries by the Plaquemines Parish Health Department. Complainants contend that that portion of demurrage charges which are penal in nature are unreasonable when disposition of the car is removed from the discretion of the receiver. They state that there was no opportunity to divert the cars before being placed within the parish and that, in any event, no alternative processing facilities were available. Had the health department not intervened, complainants contend that the fish meal would have been processed on an around-the-clock basis. Thus, they argue certain cars would have earned credits to offset any debits and no demurrage charges would have accrued. DEFENDANTS EVIDENCE Defendants contend that the legally applicable class 32 1/2 rate of 2.49, subject to increase Ex Parte No. 281 surcharge of 2.5 percent as applied to the total origin scale weight of the shipment is reasonable despite the distressed nature of the commodity. They point out that prior to tendering the shipment for transportation, complainants sought no agreement from the carriers to assess a reduced rate on the damaged, waterladen commodity. Shippers' reliance on the column-commodity rate which the carriers had originally quoted is unjustifiable, they assert, since there had been no suggestion that a rate other than the applicable, published rate would apply. Defendants take the position that this is not a situation where shipper's decision to salvage a commodity is made in reliance upon carriers' agreement to publish a reduced rate for transportation. Here, complainants made an independant business decision to transport the fish meal at the applicable rate and their losses after the fact do not prove the published rate to be unreasonable. Even if the applicable rate is unreasonable, however, defendants contend that complainants have not shown an adequate method for determining a reasonable rate. They take issue with complainants' assessment of the moisture content of the fish meal which is based on an assumption of a standard curve of moisture in the contents of the two barges. Defendants argue that the resulting mositure figure is erroneously high due to the inadequacy of the sample. As to the weight loss in transit, defendants argue that in using equipment which was not designed for transporting a semiliquid commodity complainants assumed the risk of loss in transit from leakage. They note that preparation of the cars was undertaken by the complainants, and conclude that the subsequent loss was their responsibility. Defendants further argue that it is impossible to know when or where during the transportation the losses occurred so that freight charges are properly computed on origin weight of the shipment. Defendants also point out that in the course of transporting this commodity they received various complaints from employees and the general public regarding the noxious odors and experienced track and equipment contamination from the leaking fish meal. At the time of the movement, the Average Agreement provisions of rule 9, item 940-K, Supplement 96 to General Car Demurrage Rules and Charges Tariff 4-I, I.C.C. H-36 were in effect. Under its provisions, there are 48 hours free time after which the next 4 days accrue debits which can be offset with subsequent credits earned on other cars during that month. Such credits arise on cars which are released before the expiration of 24 hours. Any such days which are not offset are chargeable at $10 per day. Demurrage days occurring after the first 4 debit days cannot be offset with credits but are chargeable at the rate of $20 each for the first 2 days and $30 each day thereafter. Defendants submitted a chart, annexed hereto as appendix 1, indicating the order and date of placement on each car, either actual or constructive." In all, 694 NOLC was under instructions not to place more cars at the plant than the rail siding could handle at one time, which was approximately four. Consequently, all cars except the first four cars which had been actually placed, were constructively placed upon arrival. car-days were lost in awaiting disposition of these cars. There were no credits accruing for the month of September and a total of 188 debit days, for total demurrage charges of $10,260. Defendants argue that the legally applicable demurrage charges are reasonable under the circumstances since approximately $18,000 in charges would have accrued had the health authorities not intervened." At the time of the movement an acute shortage of hopper cars existed in certain sections of the country. Of the 52 cars involved herein, 23 were hopper cars, covered by provisions of the Commission's service order No. 1043 requiring all carriers to return to owner, and exclude from loading all hopper cars owned by the named railroads, among which were defendants' Penn Central and B & O. Thus, defendants argue, extreme due diligence is required in the face of the declared emergency on these cars. The 23 hopper cars accrued 309 demurrage days while awaiting final disposition of the fish meal. In defendants' view, this resulted from lack of diligence rather than government intervention since complete processing would have also caused substantial delay. DISCUSSION AND CONCLUSIONS Since the parties agree that the class 32 1/2 rate of $2.49 plus the Ex Parte No. 281 surcharge of 2.5 percent is the legally applicable rate on the described movements, the question for resolution is whether, in light of the cirucmstances, the charges produced by application of the legal rate is unreasonable. It is clear from the record that transportation of the fish meal took place under emergency conditions which required haste. While the material ultimately was valueless, at the time of initial movement salvage seemed possible if the processing could begin at once. Transportation of the commodity at the greatly inflated weight from Canton to Empire was necessitated by the fact that Empire was the closest available processing facility. The Commission has found the applicable rate on distressed, water-soaked commodities to be unreasonable in similar emergency situations. See Emerson Carey Fibre Prod. Co. v. Chicago R. I. & P. R. Co., 185 I.C.C. 605 (1932); Hoover and Allison Co. v. Baltimore and O. R. Co., 225 I.C.C. 456 (1937); F. Burkart Mfg. Co. v. Baltimore & O. R. Co., 229 I.C.C. 557 (1938); Missouri Bag Co. v. Southern Ry. Co., 243 I.C.C. 282 (1941); and Millhurst Milling and Drying Co., Inc. v. Boston and M. R., 299 I.C.C. 674 (1957). In the Emerson Carey and Hoover and Allison cases it was clear that the shippers sought reduced rates prior to tendering the shipments for transportation but the need for haste prevented the carriers from publishing the reduced tariffs. This fact is disputed in the Burkart, Missouri Bag, and Millhurst cases, however, and appears to have been just one of the factors in the Commission's determination of unreasonableness. The need for immediate transportation to effect salvage, the inflationary effect of the water weight on total charges and the low value of the distressed commodities were also considered. In light of these factors, the characteristics of the emergency movement in question dictate that application of the class 32 1/2 rate on the weight of the entire shipment of distressed fish meal is unreasonable. "This figure is derived by using 32 hours 40 minutes as representative of the time element required to process each group of four cars and assuming a regular 5-day workweek. Thirty-two hours 40 minutes was the elapsed time from the beginning of the free time to the release of the first four cars. Defendants assail the complainants' determination of the amount of excess moisture contained in the fish meal. While the time factor in disposing of the decaying fish meal prevented extensive sampling, the analysis was adequate to determine the moisture content for the purposes of ascertaining a reasonable rate. The various bases of adjustment sought by complainants were detailed in the previous section and will not be repeated here. The Commission's determination of a reasonable rate in Emerson Carey and Hoover and Allison was aided by the carriers' subsequent publication of lowered rates which the Commission found to be reasonable. In Burkart, the Commission approved the basis upon which the defendant had agreed to pay reparations. In Missouri Bag, four carloads of damaged and watersoaked burlap bags were shipped from New Albany, Ind., to St. Louis, Mo. While the record did not definitely establish the exact number of bags shipped, or the average size or weight thereof when dry, the Commission found that the applicable rate as applied to the approximate dry weight of the bags was reasonable under the circumstances. The facts in the instant case are similar to those in Millhurst. There, 47 carloads of water-damaged grain were transported. Because the wet grain was highly susceptible to spontaneous combustion, it was necessary to ship the commodity in open-top hopper and gondola cars rather than in regularly used boxcars. The Commission found the applicable rate reasonable as applied to the actual weight of the shipment less the excess moisture content but unreasonable as applied to the weight of the excess moisture. While the particular ratio of the published rate to the reduced rate does not constitute a general formula as complainants suggest, the methodology followed by the Commission is one that can be fairly applied here. Thus, the legally applicable class 32 1/2 rate of $2.49, subject to Ex Parte No. 281 surcharge of 2.5 percent, will be applied to the dry weight of the fish meal and a reduced rate applied to the weight of the excess moisture. As no cost evidence was admitted to show the carriers' actual costs of transportation of the fish meal, the published colùmn-commodity rate of $19.57 NT plus Ex Parte No. 281 surcharge of 2.5 percent will be applied to the excess moisture portion of the material. This rate is certain to cover the carriers' costs and, in fact, compares closely with the cost analysis prepared by complainants to show the reasonableness of their formulas. The total origin track scale weight of the contents was 5,684,780 pounds. An aggregate of 425,830 pounds was lost in transit. As to this latter amount, neither the percentage of fish meal nor the percentage of excess moisture is established on the record. It is certain, however, that the defendants did transport the entire commodity for at least some portion of the trip and should be compensated for this movement. It will be assumed that the amount lost in transit exhibited the characteristics of the driest of the carloads, each containing 21 percent excess moisture. Applying the rates found to be reasonable herein, it is determined that the applicable charges for the line-haul transportation is $76,132.41, computed as follows: 355 I.C.C. For the 2,533,218 pounds of fish meal-- $64,647.72 [Applying to such weight the rate of $2.49 plus 2.5-percent surcharge] For the 2,725,732 pounds of excess moisture 2,807.50 [Applying to such weight the rate of $19.57 NT plus 2.5-percent surcharge] For the 425,830 pounds lost in transit 8,585.08 [Applying to 336,406 pounds "constructed dry fish meal" the rate of $2.49 plus 2.5-percent surcharge] [Applying to 89,424 pounds "constructed excess moisture" the rate of $19.57 NT plus 2.5-percent surcharge]- Total line-haul freight charges --- 92.11 76,132.41 As noted above, complainants contend that they should be relieved of the penalty element of the demurrage charges because the order of the Plaquemines Parish Board of Health prevented them from unloading the cars. Charges for demurrage embrace compensation for the use of the cars and tracks and a penalty designed to prevent undue detention of cars and to insure their prompt return to public service. Chrysler Corp. v. New York Central R. Co., 234 I.C.C. 755 (1939). The Commission has determined in numerous instances that penalty charges are unjust and unreasonable when the demurrage charges accrue from causes beyond the shipper's power to control. Commerce & Industry Assn., of N. Y., Inc., v. B. & O. R. Co., 272 I.C.C. 7 (1948), and Universal Carloading & Distributing Co., Inc. v. P. R. Co., 276 I.C.C. 145 (1949). In granting relief from penalty charges, the shippers have been held to a high degree of diligence by exercising prudent foresight in all the circumstances surrounding the transaction. Where the evidence disclosed that the complainant failed to exercise due diligence, or where proximate cause of the car detention was found to be of the shipper's or consignee's own making, relief has been denied. Eagle Cotton Oil Co. v. Gulf, M. & O. R. Co., 268 I.C.C. 391 (1947); Continental Can Co., Inc., v. Pennsylvania R. Co., 270 I.C.C. 42 (1948); Apex Tire & Rubber Co. v. New York, N. H. & H. R. Co.,177 I.C.C. 1 (1950); and Wells Fargo Carloading Co., Inc., v. Central R. Co., of N.J., 277 I.C.C. 797 (1950). In the instant case the proximate cause of the car detention was not the order of the Plaquemines Parish Health Department but complainants' decision to ship 52 carloads of distressed fish meal to a processing plant that could handle only 4 carloads in 32 hours 40 minutes. Fifteen cars were constructively placed on August 24, 27 on August 25, 4 on August 26, and 2 on September 5, 1972. Even if the health department had not intervened and complainants had processed the meal on an around-the-clock basis, substantial demurrage would have accrued. As no other plant was available to process the material, complainants could not have reduced the processing time to avoid demurrage charges if the order to destroy the fish meal had not been made. Therefore, once having embarked on the venture, detention of the cars was bound to occur. As a result, the evidence of record is not persuasive that the complainant exercised due diligence in avoiding detention of the cars upon which the demurrage accrued. |