APPENDIX 2 Approved protective service contracts between railroads and independent companies which furnish protective service (These contracts are approved subject to conditions set forth in report and order) No. 340571 NEW ENGLAND MOTOR RATE BUREAU, INC. v. Decided December 18, 1963 1. In No. 34057 and No. 34057 (Sub-No. 1), assailed rates on cleaning, scouring, or washing compounds, drugs and drug store supplies, and foodstuffs between certain points in Massachusetts, New Jersey, New York, and Rhode Island found unjust and unreasonable in certain instances, and not shown to be unjust and unreasonable in others. Assailed less-than-truckload weight brackets and truckload minimum weights found not shown to be unjust and unreasonable. 2. In No. 34090, proposed commodity rates on foodstuffs from Newark, N. J., and points grouped therewith, to Saylesville, R. I., found not shown to be just and reasonable. 3. Rates found unlawful ordered canceled and proceedings discontinued. Ronald S. Woodberry and Herman Matthei for complainant. George A. Olsen for defendants and respondent. John J. C. Martin for intervener in support of defendants. REPORT AND ORDER OF THE COMMISSION DIVISION 2, COMMISSIONERS FREAS, WEBB, AND BUSH WEBB, Commissioner: The modified procedure was followed. Exceptions to the examiner's recommended report and order were filed by the complainants, and the defendants replied. Our findings and conclusions differ in part from those recommended. Exceptions and requested findings not specifically discussed in this report nor reflected in our findings and conclusions have been considered and found not justified. These proceedings are related and will be disposed of in one report. This report embraces also No. 34057 (Sub-No. 1), the New England Motor Rate Bureau, Inc., v. New York & Worcester Express, Inc., et al., and No. 34090, Foodstuffs, New Jersey to Saylesville, R. I. Stone's Express, Inc., a defendant in the title proceeding has on file a local and joint tariff of commodity rates, 2 applicable on cleaning, scouring, or washing compounds, drug and drugstore supplies, and foodstuffs between certain points in Massachusetts, New Jersey, New York, and Rhode Island, in its MF-I.C.C. No. 49, which became effective on March 21, 1962, and its supplements Nos. 1 and 3, effective April 2 and May 2, 1962, respectively. All Freight Transportation Company, Inc., and Wings Express, Inc., are shown in the above tariff as carriers participating and concurring in the joint rates provided therein. By complaint filed April 27, 1962, the New England Motor Rate Bureau, Inc., hereinafter called the bureau or complainant, alleges that those rates are unjust and unreasonable because they are unduly depressed and in general noncompensatory, that the continuance of the less-than-truckload weight breakdowns, the truckload minimum weights, and the rate levels complained of result in unfair or destructive competitive practices in contravention of the national transportation policy. The complainant seeks an order requiring the defendants to maintain rates, charges, weight breakdowns, and truckload minimum weights which are not lower than those in the complainant's tariff, MC-I.C.C. No. A-196, on the corresponding traffic. In No. 34057 (Sub-No. 1), a similar complaint, also filed on April 27, 1962, alleges that the local and joint commodity rates of defendants Essex Express, Inc., Therouz Brothers, Inc., New York & Worcester Express, Inc., and Worcester & Taunton Express Company, Inc., applying on foodstuffs between points in Massachusetts, New Jersey, New York, and Rhode Island, as described in their tariffs, MF-I.C.C. No. 33, effective March 21, 1962, and supplement No. 1 thereto, effective May 2, 1962, are unlawful in the same respects as alleged in the title proceeding. Similar relief is requested. In No. 34090, by schedules filed to become effective on June 23, 1962, New York & Worcester Express, Inc., proposed to establish a commodity rate on footstuffs of 55 cents, minimum 28,000 pounds, from Newark, N. J., and points grouped therewith, to Saylesville, R. I. Upon protest of the bureau, an investigation was instituted by order of the Commission, dated June 22, 1962, without suspending the protested rate. It has been stipulated by the parties that whatever determination is made in Nos. 34057 2 Rates and costs are stated per 100 pounds. and 34057 (Sub-No. 1) in connection with the rates and truckload minimum weights from group 3 points, which include Newark to Providence, R. I., will also apply to No. 34090 and be appropriate for application from group 3 points to Saylesville, R. I. In view thereof, the examiner, having found the assailed rates in Nos. 34057 and 34057 (Sub-No. 1) not shown to be unlawful, found the rate in No. 34090 lawful. As stated, the rates in issue apply for joint and local hauls of foodstuffs and related articles, drugs and drugstore supplies, and cleaning, washing, and scouring compounds. These commodities are generally classified fifth class. Commodity rates, weight breakdowns, and truckload minimum weights, all based on fifthclass rates, have been accorded these articles for many years. The class 5 weight brackets stemmed basically from the decision in Ex Parte No. MC-22, Motor Carrier Rates in New England, 47 M.C.C. 657 (1948). This structure subsequently was revised upward in 1952, and to its present level on April 22, 1961. This was followed by a general class-rate increase, effective August 14, 1961. Until March 21, 1962, the defendants participated in the rates published in the bureau's tariff MF-I.C.C. No. A-196. Effective on this date, the defendants, by independent action, published the tariff containing the rates in issue. This had the effect of restoring the truckload minimum weights and rates in connection therewith that were in effect prior to the general revision of these commodity rates in 1961 and 1962 (described below). Except for the rates in issue, which apply between points in Connecticut, Massachusetts, and Rhode Island, on the one hand, and points in New York and New Jersey, on the other, the defendants have continued to participate in the complainant's revised commodity rates and weight breakdowns which became effective on April 16, 1962, and which conform closely to the pattern of the class rates. There are two issues in these proceedings: Whether the rates are compensatory, and whether the use by the defendants of less-than-truckload and truckload weight breakdowns which are unrelated to the normally applicable class rates, as revised by the complainant, are just and reasonable. The following table compares the weight breakdowns of the Bureau for class 5 related commodity rates on April 16, 1962, and those in effect prior to that date which are presently maintained by the defendants: In addition to deviating from the present weight breakdowns and revised rates in connection therewith, the defendants' tariff makes no provision for a minimum charge per shipment. For example, a shipment of 100 pounds or less from New York to Boston, subject to a minimum charge of 490 cents under complainant's tariff, is subject to a rate of the defendants of 171 cents. Eight witnesses, representing motor carrier members of the bureau, express great concern as to the detrimental and destructive effect which continued maintenance of the rates here in issue will have on the commodity rate structure in general. It is inevitable, they say, that to preserve competitive market relationships, shippers of similar commodities will demand that the motor carrier industry as a whole grant them comparable rates. They also express fear that the disintegration of the rate structure will not end there, and that shippers of other commodities will clamor for equal treatment. In support of its contention that the rates in question are not compensatory, the complainant submitted eight cost exhibits. These were discussed by the hearing examiner and need not be repeated here, except to the extent required to deal with the complainant's exceptions to the examiner's report. Pertinent excerpts from the examiner's report are reproduced in appendix A hereto. No cost evidence was submitted by the defendants in rebuttal. The defendants assert that the rates and weight breakdowns presently maintained by them are compensatory and not unduly low or destructively competitive. Retention of defendant's existing rates and weights is supported by the National Small Shipment Traffic Conference, intervener. The defendants also contend that the complainant cannot complain about this level of less-than-truckload and truckload rates, when, in its own tariffs, the complainant is publishing less-than-truckload commodity rates unrelated to the present scale of class rates. |