SECTION 5a APPLICATION NO. 83

ALASKA CARRIERS ASSOCIATION, INC.-AGREEMENT

Decided October 2, 1963

Approval, except as indicated, of agreements between and among common carriers by motor vehicle, members of and participants in tariffs published by Alaska Carriers Association, Inc., relating to the joint consideration, initiation, or change of rates, exceptions to classifications, ratings, rules, regulations, or practices governing the transportation of property, in interstate or foreign commerce, between points in the State of Alaska, found not prohibited by paragraph (4), (5), or (6) of section 5a of the Interstate Commerce Act, and by reason of the furtherance of the national transportation policy declared in the act, the relief provided in paragraph (9) of section 5a should apply with respect to the making and carrying out of such agreements when amended as indicated. Proceeding held open for a designated period to afford applicants opportunity to submit an agreement in conformity with the conclusions reached.

Edward R. Sanders for applicants.

REPORT OF THE COMMISSION

DIVISION 2, COMMISSIONERS FREAS, WEBB, AND BUSH

BY DIVISION 2:

By application filed July 1, 1963, under the provisions of section 5a of the Interstate Commerce Act, 55 motor common carriers, members of Alaska Carriers Association, Inc., hereinafter called the association, seek approval of agreements between and among themselves and others relating to the joint consideration, initiation, or change of rates, exceptions to classifications, ratings, rules, regulations, or practices governing the transportation of property, in intrastate, interstate, or foreign commerce, between points in the State of Alaska and the Provinces of Canada.

The application is unopposed. An oral hearing has not been requested and none was held. In the circumstances, we believe the public interest will be best served by our handling of the matter without issuance of an examiner's report.

The two agreements for which approval is sought are set forth in article XVIII, sections 4 and 5, of the bylaws of the association which are made a part of the application. Section 4 includes a copy of the agreement signed by applicants and which is to be executed by other common carriers, and, as stated therein, "including Alaska intrastate contract carriers," participating in the association's tariffs. Section 5 specifies the agreement to be executed by water common carriers subject to part III of the act whose participation is restricted to matters relating to transportation under joint rates and over through routes. Except for this limitation, both agreements are similar.

Under the agreements the signatory carriers covenant and agree with other signatory carriers and with the association to

initiate, change, publish or cause to be published and file tariffs of rates, (joint rates over through routes in the case of water carriers) exceptions to classifications, ratings, rules, regulations or practices, governing the transportation of property, by it in interstate commerce or Alaska intrastate commerce, to, from or within the State of Alaska, in accordance with the provisions of the bylaws of said association and the rules of procedure established thereunder, as the same may be from time to time hereafter revised, amended or supplemented.

In consideration thereof, the association agrees to publish tariffs for the account of the signatory members in accordance with such bylaws and rules of procedure. The agreements provide also that the carriers, parties to the agreement, shall have the free and untestrained right to take independent action with respect to tariff changes as provided in the bylaws.

The association is a nonprofit organization incorporated under the laws of Alaska with its principal office at Anchorage. Annual conventions of the members of the association are held during the month of April or May of each year at a time and place established by the board of directors. Notices of such conventions are given in writing to all members at least 15 days before the date of the convention. The purpose of the association, as set forth in the bylaws, is, among other things, to operate a tariff bureau and to prepare, publish, and file with regulatory bodies, tariffs required by law; and to appear for its members in matters before such regulatory bodies. Many of the association members are relatively small carriers, and are not in a position to employ trained personnel to meet statutory requirements and regulations pursuant thereto for the establish

ment of freight rates, rules, regulations, and practices. The association is designed to enable the member carriers to meet the requirements of the law efficiently and economically, and in furtherance of the national transportation policy.

The bylaws provide that the membership of the association be comprised of persons, firms, copartnerships, and corporations connected with or engaged in the transportation of persons or property by motor vehicle in the State of Alaska or Provinces of Canada, as well as other persons engaged in allied or related industries; also connecting carriers using different modes of transportation. As to carrier membership, it is stipulated that any eligible common carrier of persons or property may become a member in the association upon executing an agreement to abide by the bylaws, the payment of dues and assessments, and executing a rate and tariff agreement. Also, any common carrier operating in interstate or foreign commerce or in Alaska intrastate commerce, other than a carrier member, may become a participating carrier in any association tariff upon execution of the appropriate rate and tariff agreement and of a power of attorney in favor of the association, and the payment of such fees as may be fixed by the board. Common carriers by water may be listed in tariffs published by the association, to the limited extent previously noted, upon execution of the rate and tariff agreement and of a power of attorney in favor of the association, and the payment of such fees as may be fixed by the board. There also are provisions for raising funds necessary for the support, maintenance, and functions of the association from initial membership fees, dues, assessments, and charges for tariffs.

While the bylaws provide for the inclusion of motor carriers of passengers, no such provision appears in the Articles of Incorporation. The language employed throughout the application and the related exhibits in general clearly indicates an intention to confine the membership and activities of the parties to the agreement to carriers of property and the application will be so considered herein.

As noted, qualified applicants found eligible may become members of the association in the manner prescribed and any common carrier may become a party to the agreements. Although it appears that all present parties to the agreements are common carriers by motor vehicle, the agreement set forth in article XVIII, section 4, does not limit participation to such

carriers. Further, article III, section 4, of the bylaws stipulates that applications for membership must be made in the form established by the board of directors, be accompanied by initiation fees and dues as prescribed by the bylaws or regulations, and shall become effective when approved by the board of directors or membership committee. In these respects the bylaws and agreements set forth therein are not compatible with standards established by and under section 5a of the act, in that carriers of more than one class might be permitted to consider jointly rate matters other than permitted under paragraph 4 thereof, and in that a restraint is placed on participation in the agreement through the restriction of membership in the association. Therefore, the bylaws should be amended so as to provide clearly that any motor common carrier of property operating in interstate or foreign commerce under authority of this Commission and engaged in transportation within the territory here involved, may become a party to the agreement on the same terms and conditions as are applicable to existing members.

Carriers which are parties to the agreement are engaged in both intrastate and interstate commerce, primarily within the physical boundaries of the State of Alaska. It is to be observed that rates applicable exclusively to intrastate commerce do not come within the purview of section 5a of the act, and that inasmuch as this Commission has no jurisdiction under that section over such rates, antitrust relief with respect thereto could not be granted under section 5a. Therefore, our consideration of these agreements will be limited to those matters concerning interstate or foreign commerce subject to the act. Ohio Motor Freight Tariff Committee, Inc.-Agreement, 311 I.C.C. 127. Article III, section 5, provides that any member may withdraw from the association by giving 60 days' notice in writing and paying its obligations due the association to the effective date of withdrawal. This section also provides that any member may be suspended or expelled for the following causes:

(a) Failure to comply with the terms and conditions as set forth in the membership application of this association.

(b) For conduct or activities determined to be detrimental to the interests of this association or of the trucking industry; or

(c) For failure to comply with the terms and conditions of any agreement either written or verbal, made by this association for its members.

(d) For failure to promptly pay any and all amounts due the association as

to its share of the costs of compiling, publishing, printing, mailing and filing of association's tariffs, and any revisions thereto or reissues thereof, in which it has instructed the association and/or its managing director to cause its participation to be shown.

In considering agreements for which approval under section 5a of the act has been sought, the Commission, division 2, has said that the cause for expulsion of a carrier from a tariff publishing bureau, conference, or association should be limited to failure to pay financial obligations incurred under the agreement. See Texas Motor Exp. and Film Carriers Assn.-Agreement, 313 I.C.C. 765. Accordingly, we find that provisions in section 5 of article III of the bylaws which might unduly restrain the freedom of action of individual members to take independent action by subjecting them to possible expulsion from the association for violating any of the provisions thereof, other than one involving payment of money owed to the association, should be stricken.

Section 6 of article III provides for the designation in writing by all members of a representative and alternate, if desired, to act on its behalf in the affairs of the association and such representative or alternate is eligible for election to the board of directors in the manner prescribed in the bylaws. Article V provides for establishment within the membership of four geographical units within specified areas of Alaska and eight conference groups for as many types of trucking operations and interests.

The affairs of the association concerning interstate or foreign rates, charges, classifications, allowances, rules, regulations, and practices are vested in a general rate committee, which will be discussed later herein. Other affairs of the association are managed by a board of directors consisting of one representative from each of the geographical units and conference groups, and the immediate past president of the association. In addition, four directors at large are elected from four groups of carriers classed according to the number of pieces of equipment registered. All directors are elected at the annual meeting of the membership for a term of 1 year or until a successor is chosen. The first meeting of the newly elected board shall take place at the annual convention without notice, and other meetings shall be held upon the call of the president. Notice of such latter meetings is given in writing to each member at least 3 days before the date thereof. A majority of the members present constitutes a quorum.