SECTION 5a APPLICATION NO. 58 MACHINERY HAULERS ASSOCIATION-AGREEMENT Decided November 3, 1977 Proposed amended ratemaking agreement found not to comport with essential standards of section 5a of the Interstate Commerce Act. Proceeding held open for a designated period to afford applicants an opportunity to present an agreement in conformity with the conclusions reached here. Charles W. Singer for applicants. REPORT AND ORDER OF THE COMMISSION DIVISION 2, COMMISSIONERS MURPHY, MACFARLAND, AND CLAPP BY DIVISION 2: This proceeding involves amendments to a section 5a agreement approved in 1958. In a prior report, 302 I.C.C. 741 (1958), the Commission, division 2, approved an agreement under section 5a of the Interstate Commerce Act between and among applicant motor common carrier members of Machinery Haulers Association (association), pertaining to the organization and procedures for the joint consideration, initiation, and establishment of rates and related matters applicable to the transportation of machinery and related articles between points in the United States. The agreement consists of the bylaws of the association and an instrument designated as an agreement for execution by the carrier members (articles of agreement). By application filed April 9, 1976, the association, for and on behalf of itself and its member machinery haulers, seeks approval of amendments to the agreement primarily to broaden the commodity scope for virtual nationwide application, redefine the carrier membership eligibility to comport with the broadened scope, and to make other organizational and procedural changes. Objections to the broadened scope were filed by various motor carrier rate bureaus.' Oral hearing was held. At the hearing, applicants restrictively amended the proposed scope of the agreement and all of the protestants withdrew their opposition. The revised commodity and territorial scope is reproduced in appendix A. Subsequent to hearing and prior to the issuance of an initial decision, the Administrative Law Judge permitted applicants to modify certain of the amendments not pertaining to the broadened scope. In his initial decision the Administrative Law Judge approved, with certain exceptions, the proposed amendments, as revised, but withheld entry of an order for a period of 3 months to afford applicants an opportunity to file an application for further modification of the agreement to comport with the regulations promulgated by the Commission in Rate Bureau Investigation, 351 I.C.C. 437 (1976). By supplemental application filed December 27, 1976, applicants propose numerous further amendments in the articles of agreement and bylaws of the association, including changes in various amendments approved by the Administrative Law Judge. Appropriate service of the supplemental application was made by applicants and notice was given by publication in the Federal Register, to which no objections were filed. The proposed amendments substantially change the present agreement so as to constitute a new agreement for approval. Under these circumstances, we undertake to review the articles of agreement and bylaws of the association in their entirety to determine whether they conform with the current standards established by and under section 5a of the act. Applicants are irregular-route, specialized motor common carriers of various kinds of machinery, such as, agricultural and farm machinery, road and construction machinery, tractors, selfpropelled vehicles, and other machinery articles, including articles requiring special equipment or special handling because of size or weight. Based on the evidence, these movements originate at specified machinery manufacturer plantsites or named origins and other facilities of the manufacturers generally in the midwestern farm belt States. A few carrier members provide transportation from a single origin to all points in the United States. Some of these 'Central States Motor Freight Bureau, Inc., Middle Atlantic Conference, Niagara Frontier Tariff Bureau, Inc., Middlewest Motor Freight Bureau, Pacific Inland Tariff Bureau, Inc., and Southern Motor Carriers Rate Conference, Inc. carriers also perform return movements of materials, equipment, and supplies used in the manufacture of the outbound machinery. Consistent with the authorized irregular-route transportation of machinery articles, these specialized carriers required a forum to discuss collectively rates and other matters common to their operations (which differ from the operations of regular-route general-commodity carriers) and approval of the present section 5a machinery hauling agreement was granted in the prior report. Since 1958 when the agreement was originally approved, the machinery manufacturers have progressively expanded their product lines until today they are major shippers of a number of types of agricultural, industrial, and construction machinery and equipment as well as a broad line of lawn and outdoor leisure products, such as snowmobiles and other articles. The commodity authorities of the carrier members have been expanded to include the additional product lines either specifically or by generic-type descriptions embracing all products dealt in by the manufacturers and their dealers. Applicants are also authorized to transport various other different commodities in radial as well as nonradial service because of the compatibility of the machinery hauling equipment for such movements or return movements. These nonmachinery movements involve lumber, various wood products, and specific and generic descriptions of building and construction materials among others. Evidence was adduced that some competition exists on this nonmachinery traffic with specialized nonmachinery carriers at a limited number of points. To establish rate uniformity at the competing points, certain carriers of building materials and other commodities urge that shippers support the broadening of the commodity and territorial scope of the agreement as set forth in part B of appendix A. In addition, certain applicant member carriers have a variety of other operating authorities, including restrictive movements of general commodities. Although applicants purport to show that the sum total of their combined operating authorities with that of prospective member nonmachinery carriers encompasses the proposed broadened commodity and territorial scope described in appendix A, there is no evidentiary showing of broadened collective rate making to the extent sought. For example, the fact that certain carriers have authority to transport lumber from southern points and others from South Dakota and other western points does not establish a need for the sought broad, and literally nationwide, territorial collective ratemaking on lumber within the meaning of section 5a of the act. Additionally, no need appears for the commodity description (3) reading: "machinery and related articles" shown in part A of appendix A and it should be deleted. These commodities appear to be adequately embraced in generic description (1) reading: "agricultural, industrial, and construction machinery and equipment" as supplemented by descriptions (5) covering equipment for use in connection with description (1), and (6) covering attachments, parts, and accessories for the commodities described in (1). Also, the last phrase of part A reading: “and related articles" is not clear in the context and also should be deleted because descriptions (1) through (6), with the exception of description (3), appear to adequately cover the range of machinery articles transported by applicants. Moreover, we do not subscribe to the interpretation in the initial decision of the Administrative Law Judge that Steel Carriers' Tariff Assn., Inc.-Agreement, 335 I.C.C. 655 (1968), is not controlling in this proceeding for the Steel Carriers' reason that the proceeding involved the scope of tariff publication. Such a distinction is one of form and not of substance. Section 5a of the act pertains to agreements among carriers to engage in collective rate making under immunity from the operation of the antitrust laws, and not tariff publication. Tariff publication of motor common carriers is governed by the regulatory provisions of section 217 of the act and the Commission's tariff publishing regulations for which no section 5a relief is necessary. Under the terms of the Steel Carriers' agreement, the scope of member carrier collective rate making on iron and steel articles was coextensive and restricted to the scope of the rate bureau's tariff publication authority set forth in the agreement. Broadened territorial tariff publication scope was sought to permit the broadening of the member carrier collective ratemaking activity under the section 5a agreement. As stated in the Steel Carriers' case, supra, pp. 658-659, applicants there sought to extend the territorial scope of the agreement to cover large areas in which none, one, or only a few (which might not offer service between the same points) of the signatory member carriers had authority to operate. It was concluded that "[O]bviously, there can be no collective ratemaking activity where there is no authority to perform transportation service, and it is not shown why relief from the operation of the antitrust laws is needed where only one or a few carriers have authority" id at 659. A similar conclusion is warranted in this proceeding regarding the proposed revised broadened agreement commodity and territorial scope because of the different and varied scope of the individual operating authorities of applicant member machinery haulers and that of the prospective member nonmachinery carriers for which no evidentiary showing has been made that two or more carriers will be engaged in collective rate making to the broad extent sought pursuant to all traffic covered in appendix A. This aspect requires further clarification and justification. The stated objective and purpose of the broadened agreement is to provide a forum for collective activity relating to the extended operations of applicant machinery carriers covering transportation of nonmachinery traffic and in which other competing carriers engaged in like traffic from and to the same points will also participate upon becoming members of the association. Consistent with such objective, we are inclined to the view that the scope of collective rate making activity on this nonmachinery traffic should be territorially restricted to the operational scope of the underlying machinery carriers. Such conditions are deemed necessary to avoid unduly broadening the scope of this agreement to involve matters not within the framework of or related to the specialized operations of the machinery carriers and for which no justification has been shown. Further, the term "related articles" when used in conjunction with a generic description, such as, machinery, or building materials, among others, must be restricted to those articles embraced within such generic descriptions as determined by the Commission in Descriptions in Motor Carrier Certificates, 61 M.C.C. 209, and in other subsequent proceedings. The term "related articles" does not include articles which the member carriers may be authorized to transport which are not within the scope of a particular generic commodity description as the testimony at the hearing indicates. The applicant carrier members are admonished to refrain from this practice which is beyond the scope of the agreement approved by the Commission. There are numerous deficiencies and inconsistencies both in the articles of agreement for execution by the signatory member carriers and in the bylaws, and between these instruments. Some inconsistencies appear to stem from the failure of applicants to make collateral changes in other provisions consistent with the revisions proposed. A prime example is failure to amend article I, section 1, of the bylaws regarding membership eligibility to coincide |