claim of faster service, have not favored Milwaukee's line haul; that eliminating the competing BN and UP routes by making the cost of using them prohibitive will diminish the amount of service available to shippers, contrary to the public interest. The railroads also argue that the proposal will prejudice shippers using the Port of Butte facility by charging them more for competitive domestic shipments of commodities than is paid by shippers of the same commodities who are located within the city limits of Butte and who still have the benefit of the reciprocal switching charge. Finally, the railroads argue that Milwaukee has not met its §15(8) burden of proving the proposal just and reasonable.

DISCUSSION And ConclusiONS

The review board correctly concluded that the elimination of reciprocal switching charge is equivalent, in its effect on the public, to the cancellation of a joint-through rate, therefore, must meet the requirements of section 15(3) of the act. However, the review board committed material error by failing to fully comply in its decision with section 15(3) as amended by the 4R Act.

Section 15(3) states that where a carrier proposes to eliminate a joint-through rate without the concurrence of participating carriers and without authority from the Commission, the carrier must meet the burden of proving the cancellation consistent with the public interest. The 4R Act adds the following sentence to section 15(3):

With respect to carriers by railroad, in determining whether any such cancellation or proposed cancellation involving any common carrier by railroad is consistent with the public interest, the Commission shall, to the extent applicable, (a) compare the distance traversed and the average transportation time and expense required using the through route, and the distance traversed and the average transportation time and expense required using alternative routes, between the points served by such through route, (b) consider any reduction in energy consumption which may result from such cancellation, and (c) take into account the overall impact of such cancellation on the shippers and carriers who are affected thereby.

This addition clearly states that, regardless of the burden of proof placed on the parties, the Commission is obligated to examine the available evidence and make determinations as far as is possible, on the questions of comparative distance traversed, average transportation time and expense required; possible reductions in energy consumption and impact on affected carriers and shippers. The review board nowhere indicates in its report that it examined such evidence, as is required by the amended section 15(3), and this

omission constitutes material error. We have, therefore, reopened this proceeding in order to examine the evidence in compliance with section 15(3).

The record in this case indicates origin points for shipments to Butte from which it is possible to construct the following table of mileage comparisons on the BN and Milwaukee routes. There is no evidence showing UP origin points; however, the record also indicates that the bulk of the traffic affected by the proposal moves with BN or Milwaukee.

It appears from the comparison that differences in mileages do not particularly favor one carrier over the other, since there is no origin, with the exception of Dominguez, Calif., where the difference between routes is more than 80 miles. For example, the mileages on routes from Chicago, which appears on the record to get more traffic than most of the other compared origins, differ by less than 20 miles. The greatest mileage difference, from Dominguez, Calif., favors BN. If one infers that energy use will vary with mileage, the comparisons lead to similarly inconclusive results on energy savings.

Regarding the other areas of concern in section 15(3)(b) and (c), the record contains no evidence on comparative expenses incurred on the different routes, and the only evidence concerning travel time is Milwaukee's uncontested assertion that BN's service is 1 day slower due to switching delays at Garrison, Mont. Finally, in considering $15(3)(c), Milwaukee's poor financial condition may be important to the "overall impact" of the proposed cancellation, since the revenues from the proposal would benefit Milwaukee and conceivably help preserve rail competition in the area.

An examination of all the areas set out in the amended §15(3) shows that the proposed cancellation will not result in any significant savings in distance traversed or in energy consumed. There may be some time savings on the Milwaukee's line haul, and the increased revenues from the cancellation may help Milwaukee's shaky financial position. However, shippers have favored BN's line haul in spite of the 1-day delay, which suggests that the delay may not be significant or that it is outweighed by other advantages of using BN's line haul. Moreover, it is unlikely that increased revenue from the proposed restriction would make a significant improvement in Milwaukee's financial condition. Finally, there is opposition here by shippers, and the effect of the proposal would be to decrease the number of trains serving Butte from the present five (two Milwaukee, two BN and one UP) to two.

Had the comparisons under the new section 15(3) shown a significant savings in distances traveled, time or energy consumed by using the Milwaukee's line haul, reversal of the review board might have been justified. However, Milwaukee's line haul shows no advantages in these areas. Moreover, the total impact on shippers and carriers may be adverse, given the reduction in available train service which would result. The record does not support Milwaukee's contention, in the face of shipper protest, that its line haul service is superior and would not result in diminution of service if used exclusively. Therefore, examining the evidence without regard to burden of proof, as required by the amended §15(3), does not lead to the conclusion that the review board erred in its result. In addition, the review board correctly noted that respondent must also bear the burden of showing its proposal just and reasonable under section 15(8) of the act. Since Milwaukee offered no cost evidence or rate comparisons to support the reasonableness of its proposal, we affirm the review board's conclusion that Milwaukee failed to meet its burden of proof under section 15(8) of the act.

We therefore find upon reconsideration that Milwaukee has failed to show that the proposed elimination of a reciprocal switching charge at Butte, Montana is just and reasonable, or consistent with the public interest, as required by sections 15(8) and 15(3) of the

act.

We further find that this decision is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969.

IT IS ORDERED, That the respondent herein be, and it is hereby, notified and required to cancel the tariff provision described in the order of the Commission's Suspension and Fourth Section Board entered in this proceeding on April 22, 1976, on or before 45 days from the date of service of this report and order and upon not less than 10 days' notice to this Commission under section 6 of the Interstate Commerce Act, and that this proceeding be, and it is hereby, discontinued.

NOTICE: By this report and the order served concurrently, this proceeding is rendered administratively final pursuant to section 17 of the Interstate Commerce Act, as amended, and within the meaning of section 704 of the Administrative Procedure Act.

355 1.C.C.

EX PARTE No. 230 (SUB-No. 4)

INVESTIGATION TO CONSIDER FURTHER MODIFICATION OF THE PIGGYBACK SERVICE REGULATIONS

Decided October 13, 1977

Upon notice of proposed rulemaking for liberalizing or eliminating the amount of operational circuity permitted motor and water carriers of property under certain provisions of this Commission's trailer-on-flatcar or piggyback service regulations, Practices of For-Hire Carriers of Property Participating in Trailer-onFlatcar Service, 49 CFR 1090, and upon investigation of views, arguments, and representations of the parties, the rules contained at 49 CFR 1090.5 have been deleted.

Milton Kafoglis, William Lilley III, James C. Miller III, and Roy Nierenberg for Council on Wage and Price Stability.

James E. Armstrong, Dellon E. Coker, and Wilton A. Ryder for the Department of Defense.

Donald I. Baker, Stephen H. Lachter, and Jonathan C. Rose for the United States Department of Justice.

Constance L. Abrams, Linda Heller Kamm, and William A. Kutzke for the United States Department of Transportation.

Lana R. Batts, Nelson J. Cooney, Gary Dunbar, R. P. Ebeling, Allan C. Flott, William C. Harris, Frank Hiljer, Jr., Robert L. James, J. S. McCallie, Keith G. O'Brien, Todd A. Peterman, Warren Price, Jr., Roland Rice, and Richard R. Sigmon for carrier interests.

BY THE COMMISSION:

REPORT OF THE COMMISSION

By notice and order entered October 12, 1976, this Commission, on our own motion, began a rulemaking proceeding to determine whether there continues to be a need for any circuity limitations on trailer-on-flatcar (TOFC) service and if so, what the limitations should be in light of current economic conditions.

In our report and order in Ex Parte No. 230 (Sub-No. 3), Petition for Enlargement of the Amount of Operational Circuity Reduction Permitted Motor Carriers of Property Under Certain Provisions of