SEARS, ROEBUCK & CO. (John C. Allen) Ownership of another carrier by a freight forwarder, as proposed in H. R. 9771, is not per se objectionable, but it is feared that difficulties will develop unless it is explicitly provided that rates applicable to a forwarder using the service of an owned carrier will be available to all shippers, consolidators, or other freight forwarders, under otherwise like conditions. It is doubted that ownership of a common carrier by a forwarder could exist without unduly restraining competition (R. 1458-1459). SOUTHERN TRAFFIC LEAGUE (C. B. Culpepper) H. R. 9771 is illogically conceived. Freight forwarders, while having a technical common-carrier status, are nothing more than shippers in their relation to the transporting agencies. They now propose to further develop a monopoly in the transportation of small shipments of freight. If they controlled a railroad, they could determine that their plant would not permit the handling of shipper-association freight and could thereby hamper, and finally eliminate, the valuable type of service (R. 1231–1232). (A substantially similar statement was presented by the witness in behalf of the Atlanta Freight Bureau (R. 1239).) Additional opponents H. R. 9771: Bureau of the Budget, Percy Rappaport (R. 37). Traffic Managers Conference of Southern California, L. C. Wolfe (R. 1002). BROTHERHOOD OF RAILWAY CLERKS (Carl H. Bier) One of the controls which for many years has been imposed on common carriers is a limitation on the number in the field. As a result of the ease with which permits can be obtained, the number of forwarders in any given area has continued to increase, followed by curtailed service to many parts of the country and the displacement of employees. It is not in the public interest to grant licenses indiscriminately, and those provisions should be tightened up as soon as possible. The law does not now permit the Commission to reject an application because of adequate and efficient service already available, and the available traffic is being sliced too thin (R. 1466-1467). FREIGHT FORWARDERS INSTITUTE (Giles Morrow) H. R. 9772 is proposed to amend section 410 of the present act, changing the requirements for obtaining freight-forwarder permits. In general, the standards required for obtaining freight-forwarder operating rights are the same as those required under part II of the act, governing the issuance of permits to contract carriers by motor vehicle. The bill would eliminate subsection (b) of section 410 which provides that the Commission shall not deny authority to engage in the proposed service solely on the ground that such service will be in competition with service performed by any other freight forwarder. The Commission for some time has been recommending and advocating the changing of section 410 so as to require the obtaining of certificates of public convenience and necessity by freight forwarders, instead of permits to engage in forwarder service. Freight forwarders have been regulated as common carriers, and are subjected to all of the restrictions and burdens normally imposed by regulation on common carriers. It is, therefore, both unjust and unrealistic to withhold from forwarders the normal protection from uneconomic and wasteful competition which regulation affords other carriers. Whatever the reasons may have been for initially adopting a "freedom of entry" policy with regard to freight forwarder operating rights, no reasons for such a policy exist today. The advantages and economies of freight forwarders' service stem largely from the ability of the industry to concentrate and consolidate traffic. When the available traffic is dispersed among too many companies, there is an adverse effect upon the overall service and important economies are lost (R. 1186-1189). INTERSTATE COMMERCE COMMISSION (Anthony F. Arpaia) H. R. 9772 would amend section 410 by changing the requirements for obtaining a freight forwarder permit. It would eliminate 410 (d), which restricts the Commission's authority to deny an application, and redesignate the remaining subsections. The act of December 20, 1950, designated freight forwarders as common carriers. The Commission, in its 69th annual report recommended that since freight forwarders are classified as common carriers, they should be required to secure certificates of public convenience and necessity. The ease with which permits may be obtained under the present section 410 (d) could result in general impairment of the efficiency of forwarder service and harm the general public. While it appears that the elimination of section 410 (d) is desirable so as to remove the restriction on the Commission's authority to deny applications, it is believed that the act should be further amended so as to give effect to the aforementioned annual report recommendation. However, the Commission has no objection to enactment of H. R. 9772 (R. 293-294). WESTERN FREIGHT ASSOCIATION (Carl E. Anderson) The proposal to allow the Commission to consider whether a new forwarder service will be in competition with service already existing is approved. There is a limit to the amount of business available to forwarders anywhere, and the more forwarders there are in the field to divide the business the more difficult it becomes for any of them to give adequate service (R. 1425). AIRCRAFT INDUSTRIES ASSOCIATION (Harry R. Brashear) H. R. 9772 would eliminate from the Interstate Commerce Act section 410 (d) which forbids the Commission to deny authority to enter into freight forwarder operations, solely on the ground that the proposed service would be competitive with existing freight forwarders. The objective of this bill is definitely and clearly opposed to the free enterprise principle (R. 1324). EASTERN RAILROADS (Fred Carpi) H. R. 9772, a proposal to eliminate section 410 (d) of the Interstate Commerce Act must be viewed against the background of the original legislation embodied in part IV which, while recognizing that freight forwarders bore a common carrier responsibility to their own patrons, definitely regarded them as shippers in their relation to the common carriers whose services they employed at the published rates of such carriers. Forwarders also were treated in such original legislation as not entitled to any rate advantages over any other shipper availing itself of such carrier services. Since freight forwarders were so regarded there was no reason to prevent any responsible person from engaging in the business. As they customarily provided no facilities of physical transportation on which the shipping public might be expected to pay a fair return, there was no reason to require a certificate of convenience and necessity as a prerequisite to their operation as in the case of railroads, or motor or water common carriers. Also reflected in the original legislation, was the fact that certain of the freight forwarders were controlled by or affiliated with certain railroads. Other railroads had not acquired forwarders, which had been held to be shippers. However, they desired the right to establish a forwarder if that should appear necessary or desirable. In this they were affected in part by the fact that freight forwarders, having the right of shippers to transfer their traffic to another railroad or transport agency, could deprive a railroad of a forwarder service previously maintained over its lines. In view of this situation the eastern railroads oppose this bill unless amended so as to fully preserve their present right freely to establish a new forwarder operation as now permitted by subsections (c) and (d) of section 410. This could be done by restricting the scope of subsection (d) so as to apply only to common carriers subject to part I of the Interstate Commerce Act. The forwarder has the shipper's advantage of being able at any time to withdraw its traffic from one carrier and to give it to another. Physical facilities provided by the railroad may cease to be used and the railroad be injured in its business. It is therefore of prime importance to the railroads that they shall not be denied opportunity to establish a new forwarder operation to fill the vacuum (R. 1214-1216). MEMPHIS FREIGHT BUREAU (C. A. Mitchell) With reference to the statement of witness Morrow for the Freight Forwarders Institute, in connection with this bill, that the 1955 tonnage of freight forwarders was below that of 1943, it should be noted that 1943 was a peak wartime year when rails and trucks also handled more tonnage than in 1955. The earning sof forwarders in 1955 were more than double the earnings in 1943. Revenue in the former year increased 112.5 percent over 1943. In addition, since 1943, forwarders have greatly curtailed their short-haul services (R. 1262-1263). NATIONAL INDUSTRIAL TRAFFIC LEAGUE (William H. Ott) The proposed elimination of section 410 (d) would give the Commission authority to deny an application to operate as a forwarder solely on the ground that it would be in competition with another forwarder. Such a change would not be consistent with the position of forwarders under the act and should not be made. Because of the wide territorial coverage of the permits now in effect, it would be almost impossible to secure the issue of any new authority. The public interest is best served by limited entry into the business of actual transportation; contrariwise, it is best served by relative freedom of entry into business which acts as an intermediary between actual carriers and the shipping public. In 1953, 65 percent of the gross revenue of 61 class A forwarders was received by the 4 largest. This degree of concentration demonstrates the desirability of maintaining freedom of entry for new operators (R. 946-947). R. H. MACY & CO. (E. J. Derenthal) H. R. 9772, eliminating section 410 (d) which prevents the denial of forwarder-operating authority solely on the basis of competition with existing services, is protested. Coupled with the proposal to restrict shippers associations, an association would not be in a position to apply for a permit as a forwarder to continue operations. (R. 1037). SEARS, ROEBUCK & CO. (John C. Allen) The effect of H. R. 9772 is to restrict entry into the freight-forwarding field, contrary to the public interest. The Commission has said that overcrowding in the field could result from the ease with which permits may be obtained, but it is not shown that it has actually happened. Statistics indicate a concentration of business in the hands of three companies. This bill is not consistent with the dynamic competition theory (R. 1457). SOUTHERN TRAFFIC LEAGUE (C. B. Culpepper) H. R. 9772 would tend to preserve and increase the power of the so-called Big Three in the freight-forwarding field. No new forwarder could get into business. Furthermore, when considered in connection with the proposal in the omnibus bills regarding shipper association, the bill would be the funeral march of the nonprofit cooperative shipper groups (R. 1232). (A substantially similar statement was presented by the witness on behalf of the Atlanta Freight Bureau (R. 1240-1241). Additional opponents H. R. 9772: Bureau of the Budget, Percy Rappaport (R. 38). Dal-Worth Shippers' Association and Houston Merchant Shippers' Association, Joe G. Fender (R. 1106). National Retail Dry Goods Association, Robert H. Smith (R. 1007). Traffic Managers Conference of Southern California, L. C. Wolfe (R. 1002). AMERICAN FEDERATION OF THE PHYSICALLY HANDICAPPED (Paul A. Strachan) Present laws respecting transportation of severely handicapped persons are unjust and discriminatory of the blind. About 275,000 blind ride at about half fare, but approximately 9 million severely handicapped who should have equal claim to the benefit, do not. The Senate has passed the bill and if the House does also, it would be followed by petitions to agencies regulating common carriers urging their approval. The legislation is permissive, because past law started that way, and must be approved by the individual transporting agency. It is the purpose of the bill to include persons temporarily handicapped if they require an attendant (R. 1478-1480). (Marianne Yambor) The ultimate desire of every physically handicapped person is to attain independence. A step forward would be to extend to them the same privileges as are enjoyed by the blind under section 22 of the act. Often the severely handicapped are obliged to forego the conveniences of travel by public conveyance because of double expense. Traveling is important to such persons, and they should be extended the privileges proposed, with amendment to cover all common carriers as contained in the Senate bill (R. 1480-1481). DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (Herold C. Hunt) There appears to be considerable justification for affording severely disabled individuals who require an attendant the same privilege of |