in whole or in part, when engaging in such operations, and to cease and desist from such violations as may be found to exist. If, as a result of this investigation, it should be determined that present provisions of the act are not adequate to deal with all phases of such arrangements, you should recommend to Congress, the enactment of such additional or remedial legislation, as may be required to support your findings here, to extend such jurisdiction. SUBJECT 6. GUIDING PRINCIPLE IN CONSTRUCTING RULES GOVERNING LEASING AND HAULING AGREEMENTS The Commission should require that every responsibility and obligation that rests on an operator that owns and operates his own vehicles shall apply equally to the vehicles he leases in every respect, and shall hold him strictly accountable to it, in complying with all of these rules and regulations. For economic reasons, extensive leasing of vehicles in lieu of ownership may be desirable, but the operator of such vehicles should not be permitted to evade the responsibilities which these regulations imply shall be his, nor to profit from a different type of management or responsibility for leased facilities than that which the Commission and the public have a right to expect, from operators of owned vehicles. This is particularly important with respect to hours of service, and with the Commission's safety regulations. It should be made a criminal offense to enter into a leasing or hauling agreement specifying compliance with such rules and then to willfully fail to comply in actual practice. SUBJECT 7. RULE FOR IDENTIFICATION OF LEASED VEHICLES The Commission should undertake to prescribe the actual size, makeup and placement of signs to be affixed to leased vehicles, and the failure to affix such a sign to each unit so leased, shall be considered prima facie evidence of intent to violate this provision. Since the laws of most States provide that the name of the owner and operator of every commercial vehicle shall be plainly marked thereon the Commission should seek the cooperation of State police officials in the enforcement of this rule, and whenever a police officer shall intercept a commercial vehicle not properly marked, the nearest district office of the Commission's Bureau of Motor Carriers should receive a copy of the report of such violation for the purpose of applying penalties provided in the Interstate Commerce Act. Identification of a leased vehicle in a proper manner at all times is the most important aid to enforcement of any rules prescribed in this proceeding. Regulations regarding the removal of signs temporarily affixed at the time the agreement is terminated should also be enforced. SUBJECT 8. RECORDS OF CARRIERS WITH RESPECT TO COMPLIANCE WITH SAFETY, HOURS OF SERVICE, ETC. Safety requirements should include an actual record of an actual physical inspection of the equipment before it is placed in use, showing that such inspection has taken place, what was inspected, and with what result, and should be signed by a responsible official of the lessee and placed in the lessee's files for the inspection of the Commission, upon demand. In case of an accident, involving use of a leased vehicle, the failure to have on hand an adequate record of such examination shall be prima facie evidence of intent to violate this rule. Whenever a reportable accident occurs involving the use of a leased vehicle, the Commission should demand and receive such inspection report with the accident report. On the hours of service regulations, the driver's log must be in possession of the lessee, and should be used in the same manner as the proposed inspection report, and subject to every requirement made of carriers who own and operate their equipment directly. Failure to so comply in any respect whatsoever shall also be considered prima facie evidence of intent to violate and be dealt with accordingly. In the same manner, records of physical examination of drivers who are not employees of the leasing carrier, should be required and treated, as must items, to insure full compliance with these regulations. There is nothing that the gypsy operator or the person who hires him for personal gain, in complete disregard of these responsibilities and obligations, will dislike more than this proposal and that is the exact reason why it should be adopted and enforced to the hilt. SUBJECT 9. COMPENSATION CLAUSES IN LEASING AGREEMENTS Compensation clauses based upon a fixed percentage of the revenue on the load are unlawful and should be strictly prohibited, and in no way should such compensation relate directly or indirectly to the freight charges on the shipments transported or any division or part thereof. This rule, if adopted, and enforced, will put a severe crimp in the operations of the itinerant gypsy, who, possessing no authority of his own, undertakes to guarantee the lessee a fixed expense in that manner, and to come out ahead, must necessarily dispense with compliance of safety regulations, hours of service, and inspections and examinations, and sometimes guarantees the load as well as the vehicle, under leasing arrangement which are not really that at all, but brokerage and common carrier operations combined in an unlawful manner. All compensation must be for truck hire only and based on considerations that deal only with the value of the vehicle for hire, and in no way related to the load placed upon it. SUBJECT 10. UNLAWFUL LEASING OF OPERATING AUTHORITY A rule should be adopted prohibiting trip leasing of rights between carriers for the purpose of permitting a vehicle and its driver from operating over the routes of another carrier, on payment of a so-called "by pass" allowance, also commonly known as "10 percent agreements," whereby one carrier holding such authority permits another, the single trip use of his route for such a consideration. The leasing of operating authority, requires the prior approval of the Interstate Commerce Commission and when accomplished in this manner, it is clearly contrary to the provisions of the act. In cases of this kind, there should be a requirement that every provision of every rule proposed here must be complied with, and that furthermore, the driver of the vehicle so being operated must be a bona fide employee of the carrier over whose route the vehicle is being operated. SUBJECT II. REGISTERING VEHICLES WITH THE COMMISSION Every carrier for hire should be required to furnish to the Commission, a list of his owned equipment operated under his jurisdiction at least once a year, revised annually and showing sufficient information to apprise the Commission of the identification and ownership thereof, and the use to which such vehicles are put. The Commission should also require that a copy of every leasing agreement of any kind be filed with it, by the lessee, for purposes of review to determine full compliance with these regulations. Failure to furnish copies of such agreements shall be considered prima facie evidence of intent to violate these regulations. SUBJECT 12. PAYMENT OF WAGES BY LESSEE TO DRIVER FURNISHED BY LESSOR Proposed rule 2 (h) provides that the person assigned to drive equipment under this rule shall be an employee of the carrier, and his wages shall be separate and distinct from the charges made for the use of the equipment and shall not be made part of the terms and conditions of the contract, lease, or other arrangement covering the use of the equipment. Since it is not always possible for the carrier to obtain the services of a driver employed by him to operate a leased vehicle, under conditions whereby leased vehicles are operated in peak periods or other types of emergency, and not as a regular thing, as drivers may not be available, and also because many owners of motor vehicles will not lease the vehicles unless accompanied by the privilege of driving them to the exclusion of others for protection of the equipment, and also because subterfuges are possible whereby the owner-driver can be very easily placed on the payroll of the lessee, it is suggested that this condition be recognized and permitted, and that the instrument of agreement between the parties clearly indicate who is to furnish the driver and how he shall be paid, in addition to the terms governing possession of the vehicle, without surrendering the right of jurisdiction over such driver by the lessee, or diminishing the responsibilities of the lessee in complying with the hours-of-service regulations hereunder. Except to the extent indicated in this exhibit, the witness approves the final proposals of the American Trucking Association's leasing committee and all of the proposed rules and regulations proposed by the Commission in its order and notice of proposed rule-making in this proceeding, dated January 9, 1948. (The Chair submitted the following communications favoring the passage of this proposed legislation :) Hon. PERCY PRIEST, Member of Congress, HOUSE OF REPRESENTATIVES, Washington, D. C., April 29, 1953. Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. DEAR MR. PRIEST: I attach a letter from Bolton Broiler, Inc., of Commerce, Ga., regarding the proposed ban on trip leasing. It is, in my opinion, one of the strongest cases that can be made for stopping the Interstate Commerce Commission's proposed action. I regret that I did not have Mr. Bolton's letter for you before hearings on H. R. 3203 were closed, but I trust that you can find it possible to make the letter a part of your record, and that the members of your committee will give careful thought to Mr. Bolton's comments. I believe they will prove without question the real necessity for trip leasing. There are within a 50-mile radius of Commerce, Ga., some 25 to 30 processors of poultry who would find themselves in similar, if not worse, position than Mr. Bolton describes himself. In addition to that, hundreds of farmers from the area and from southern George and Florida wold find it nearly impossible to keep a regular flow of their products going to market. I urge your committee to give serious consideration to reporting a bill favorable to trip leasing. It would mean the difference between life and death for the small-business men in Mr. Bolton's positon. Thank you for your courtesy in getting this into the record at this late date. Hon. PHIL LANDRUM. Congressman, 9th District, Georgia, Washington, D. C. BOLTON BROILER, INC., Commerce, Ga., April 27, 1953. DEAR PHIL: We are very much upset about the recent ruling by the Interstate Commerce Commission banning trip leasing. If this ruling goes into effect it will make it impossible for us to move the farmer's chickens in our area to market. As you know, the number of broilers and fryers on the farms in this area varies considerably from time to time; therefore, our trucking needs vary the same way. If, due to our inability to trip lease trucks, these chickens should start to back up on the farms, it would cause the price to break sharply and cost our farmers untold money. We are operating seven refrigerated trucks of our own hauling these chickens to Chicago, Detroit, Indianapolis, St. Paul, St. Louis, Duluth, Milwaukee, Jacksonville, Tampa, St. Petersburg, Orlando, West Palm Beach, and Miami. If trip leasing should be banned, we would have 1 of 2 alternatives, to be priced out of many markets we now serve or it would be necessary to reduce our price to farmers by one-half to 1 cent per pound for live poultry. The trip-leasing ban would increase our hauling cost of dressed poultry from $75,000 to $100,000 annually. I understand that a bill is coming before Congress, which, if enacted into law, would prohibit this ICC regulation from taking effect. I want to urge you to support this bill and to cite these facts to your friends and colleagues in Congress and urge them to support it. This will certainly be a great service to our chicken growers in Georgia. Our plant produces about 150,000 pounds of dressed poultry per week, which is a small portion of the total produced in the north Georgia area. Approximately 4 million pounds of poultry are processed in Georgia per week and a large portion of this is trucked out of the State. Last year Chicago received 18,227,501 pounds from Georgia; St. Louis, 2,658,601 pounds; Detroit, 14,856,000 pounds; Cincinnati, 1,972,797. These are only a few examples of a situation which is applicable to hundreds of cities receiving poultry grown in Georgia. Trusting that you give this favorable consideration, I remain Yours very truly, W. D. BOLTON. Hon. CHARLES A. WOLVERTON, HOUSE OF REPRESENTATIVES, Washington, D. C., April 21, 1953. Interstate and Foreign Commerce Committee, House Office Building, Washington, D. C. DEAR COLLEAGUE: Testifying before your committee today, I did not request that the Record be encumbered with the enclosed statement of the Vegetable Growers Association, but I would be glad to have you glance through it so as to fix in your mind their position. Sincerely, KARL C. KING. VEGETABLE GROWERS ASSOCIATION OF AMERICA, INC., H. R. 3203 Relative to motor truck trip leasing of agricultural exempt trucks hauling vegetables. To: Congressman Wolverton, New Jersey; chairman, House Interstate and Foreign Commerce Committee. This brief is presented by the Vegetable Growers Association of America representing the vegetable industry composed of more than 700,000 full- and part-time commercial vegetable growers. We propose to show that the present law relating to trip leasing of motor trucks and the movement of agriculturally exempt motor trucks as originally intended by congressional act, provide the Nation, and especially vegetable growers, with a very flexible, efficient, and satisfactory hauling system for transporting highly perishable fresh vegetables from producing areas to consuming centers. We wish to present the following points for consideration, and appeal to the Congress for the passage of H. R. 3203 and companion bill S. 925: 1. The original intent of the congressional act to exempt agricultural haulers should be maintained by all Government agencies unless changed by Congress. 2. A flexible food transport system is essential to survival. 3. Interruption of the present satisfactory system of transportation for fresh vegetables in this time of emergency would seriously affect grower production, the national economy, and possibly the national safety. 4. Diversion of fresh vegetables in transit is a long-established custom, which is absolutely essential for the orderly marketing of highly perishable fruits and vegetables. 5. An agricultural exempt trucker leasing his equipment for a period of 30 days completely loses his flexibility of movement, which is the most important factor in the development of orderly marketing of vegetables throughout the Nation. 6. The loss of this flexibility would hamper and in some cases even destroy markets for farm products which are supplied by direct truck transportation from the growing sections. 7. Increased motor carrier rates would necessitate securing higher prices for the commodity hauled, or reducing the rates to the grower, neither of which is good, sound economy. 8. Certificated truckers at the present cannot deliver to secondary markets for lack of ICC rights. 9. Delays which would be caused by transfer of vegetables from one carrier to another en route would cause tremendously unecessary spoilage, waste, and deterioration in quality of freshness, vitamin content, and nutritive value. 10. Transfer problems due to lack of ICC rights would place perishables at the mercy of carriers. Perishables deteriorate rapidly when delayed in transit. 11. Certificated carriers do not have sufficient equipment to move vegetables to the markets. During the peak movements, perishables would suffer greatly. 12. It is not economically practical for a certificated carrier to maintain on a standby basis the number of trucks necessary for all movements of fresh vegetables because of their heavy peaks of production controlled largely by unpredictable weather changes. 13. Regulated motor carriers are required to operate within a rigid framework, which precludes the flexibility, efficiency, and rapid type of service needed to get these perishable commodities to market in their best condition. 14. The national daily increase of some 7,500 new food consumers requires that the food-transport system be made even more flexible. Another evidence of the need for increased flexibility is the constantly increasing consumption of vegetables, now in No. 2 place in the national diet. 15. It has been determined that in case of a national emergency, agricultural exempt trucks would be an important force necessary for feeding the people. 16. To deprive growers and the consuming public of the present satisfactory system would be a tragedy. 17. Growers would be deprived of their just financial returns and the consuming public would be deprived of having the benefits of these commodities in its diet. 18. Agricultural exempt truckers should not be deprived of their efforts to secure return loads of manufactured products under the present trip-lease system. 19. It would appear that one of the chief interests of the ICC in the MC-43 division is the protection of the public through better highway safety practices. A recent survey made by the Division Transport Administration estimates that there are several hundred thousand agricultural exempt trucks devoted to hauling agricultural commodities. While the ICC is responsible for motortruck safety regulations, the survey referred to above indicates that at the present time, it is very difficult to know where these agricultural exempt trucks are located and by whom they are operated. 20. In the interest of maintaining safety and the present trip leasing system, the VGAA recommends that special consideration be given by the Congress to providing the ICC with sufficient personnel and facilities to enforce all motortruck safety regulations throughout the Nation. Anti-trip-leasing action neither represents nor serves the interests of grassroots people, or the consumer for whom the agricultural exempt trucking congressional act was intended. 21. The rights and privileges of agricultural exempt truck owners who have a considerable investment in equipment should be recognized. 22. Growers' traditional rights to make their own transport arrangements with the truckers is fundamental. 23. While shipping rates are generally established on a per unit (crate, hamper, bushel) basis from point to point, these rates almost invariably are satisfactory to the trucker and vegetable grower-shipper. The Vegetable Growers of America respectfully request the cooperation of the Congress in the passage of H. R. 3203 and S. 925 amending section 202 of the ICC Act relating to lease of motor vehicles by a motor carrier, in order that the present flexibility and efficiency of agriculturally exempt trucks hauling fresh vegetables might not be interrupted. Hon. CHARLES A. WOLVERTON, PETER A. BERNACKI, Philadelphia 23, Pa., May 13, 1953. Chairman of the House Interstate and Foreign Commerce Committee, Washington, D. C. DEAR SIR: Many thanks for your prompt telegraphic reply to my wire, and regret very much that I was unable to attend the formal hearings on the tripleasing bill. However, I will state in this letter, as briefly as possible, the legitimate truckers' side of the story. I am manager for Peter A. Bernacki, freight broker, and have been in this capacity for the past 14 years. During this period, I have had occasion to lease hundreds of the so-called "gypsies" as referred to in most of the articles I have read on this subject. To me, they are not "gypsies" at all, but rather leased operators hauling freight in one direction and require a return load. During all these years, we have represented the following truckers: Kilgo Motor Freight, Inc., of Charlotte, N. C.; Billings Transfer Corp., of Lexington, N. C.; Johnson Bros., of Elkin, N. C. A couple examples of the truck operators we have leased are as follows: Sharp Bros., of Williamstown, N. J., who haul lumber for their own lumberyard out of North Carolina, and require southbound loads. We have on numerous occasions used Winecoff Motor Lines, Inc., of Concord, N. C., who has authority to haul yarn northbound, but very few commodities back to the South. Therefore, they rely on some other motor carrier to load their trucks back. |