the Middle District of North Carolina for corporate reorganization under the provisions of Chapter X of the Bankruptcy Act. It is operating at the present time under the granted petition. It had operating ratios of 101.4 in 1969, 107.9 in 1970, and 101.7 in 1971. It indicates it is sorely in need of additional revenue and that it is in no position to be able to absorb the July 1972 increased labor costs. Motor Freight Express, Inc., of York, Pa., is a regular-route motor common carrier engaged in the transportation of general commodities throughout official territory. Like the other Eastern Central carriers, it has tried to search out new methods, techniques, and equipment which would help it reduce its costs. Some of the steps it has taken to reduce its costs have involved purchasing the latest handling equipment for use on its larger docks, relocation of a break-bulk operation, and addition of a terminal building to handle the more concentrated break-bulk operation, and adopting a program of self-insurance which will reduce its insurance costs by 15 to 20 percent. In addition to the increased labor costs in July 1972, Motor Freight Express has experienced increased expenses in other areas, such as in meeting Federal and State safety regulations and standards, increased costs for unemployment compensation insurance and workmen's compensation insurance, and an increase in communication costs. Approximately 31 percent of the gross revenue of Motor Freight Express is derived from tariffs published by Eastern Central. In this connection, it points out that of the approximately $7 million in LTL revenues it derives from Eastern Central tariffs, about $3.25 million comes from shipments weighing less than 5,000 pounds that are transported for distances less than 500 miles. Also, about 60 percent of its transactions involve shipments weighing less than 500 pounds. It stresses that the increases sought in these two areas are vital to its financial well-being and are urgently needed if it is to continue to provide the service which the shipping public requires. Consolidated Freightways Corporation of Delaware is a motor common carrier which conducts operations over routes extending generally from San Diego, Calif., and Fairbanks, Alaska, on the west to Boston, Mass., and Macon, Ga., on the east. In 1970, 24.6 percent of its total revenue was derived from rates and charges published by Eastern Central. Consolidated has continually tried to hold down its costs. It found that smaller terminals are more efficient than the larger terminals and in 1971 it spent $6,833,000 in building new terminals. Also, it changed from the use of two man sleeper teams to the more efficient single man relay operation systemwide. Its equipment is continually being upgraded and in 1971 it spent $8,762,000 on new and replacement equipment. Its operating ratio was 94.0 in 1970, 91.2 in 1971, 94.0 in the first quarter of 1972. The average weight LTL shipment handled by it is approximately 540 pounds. It maintains that the increase herein will fall far short of making the shipments under 500 pounds compensatory, and that therefore, it will certainly have to slow down its investment in new and improved equipment and facilities for handling shipments weighing under 500 pounds. Spector Freight System, Inc., is a common carrier of general commodities authorized to operate generally throughout the eastern half of the United States over both regular and irregular routes. It maintains terminals at 58 points throughout its system. In 1971 its operating revenues amounted to $114,633,793. Of this, $72,214,358 was derived from Eastern Central traffic. Mainly because of a strike in 1970 it had a pre-tax loss that year exceeding $6 million. Spector's operating ratio for 1971 was 99.3 and for the first 8 weeks of 1972 it was 102.3. Like the other motor common carriers which submitted evidence, it has been actively engaged in continuing programs designed to control and reduce its costs. Its nonlabor increases since July 1, 1971, amount to approximately $1,665,000 annually, which represents about 1.5 percent of its 1971 revenue. It is estimated that the labor increases which became effective July 1, 1972, will increase its costs about $2 million annually, which is about 2 percent of its 1971 revenue. Approximately 68 percent of its shipments weigh less than 500 pounds. It states that it is very necessary that the involved increases be permitted on all segments of its traffic and in particular for shipments weighing less than 500 pounds. Jones Motor (Jones) is a common carrier of general commodities operating over regular and irregular routes in an area extending from Boston, Mass., on the north to Charlotte, N.C., on the south and thence to St. Louis, Mo., on the west. Its total revenues in 1971 were $63,687,000 of which $22,500,000 was generated under tariffs published by Eastern Central. Jones now has in effect a number of programs specifically designed to better control its costs and provide a more complete and efficient transportation service to the shipping public for all segments of traffic. Included therein is an incentive program which is based on established targets of productivity, revenue, profit, and service whereby terminal managers and terminal personnel are given bonuses based on the efficiency of their operations. Also, recently it introduced a daily scheduled service between its major terminals on a direct basis thereby bypassing break-bulk centers. Its operating ratio for 1970 was 103.4 and for 1971, 99.6. For the first two quarters of 1972 it was 101.55 and 97.53, respectively. The labor increase which became effective July 1, 1972, will increase its total expenses about 2.9 percent. This carrier is vitally interested in the short-haul adjustment involved herein as approximately 15 percent of its Eastern Central revenue is generated at mileages of less than 500 miles. Jones' average haul systemwide for 1971 was 418 miles. It states that while the Eastern Central carriers have increased their rates and charges from time to time to combat steadily rising costs that the financial condition of these carriers as a whole has deteriorated. This situation forced the carriers to review their rate structures and to develop restructured rates which would yield adequate revenue for performing the involved services. It was determined that the method of applying percentage increases as had been their practice in the past did not give adequate consideration to the effect which labor increases had on the short-haul traffic. It points out that the element of terminal service is a greater proportion of the total service in a short-haul operation than is true of a longer haul operation and the element of labor is particularly large in the cost of providing terminal service. For this reason it believes that a percentage increase to the entire rate scale will not recover for the short-haul operation adequate revenues to cover the additional costs. It states that other rate associations, such as the Central States Motor Freight Bureau and the Middle Atlantic Conference, have made short-haul adjustments in connection with their rate structures and as a result their carriers have been successful in providing a reliable and efficient short-haul service. Accordingly, it supports the increases in the manner sought herein. Eastern Express, Inc., is a regular-route motor common carrier of general commodities, with the usual exceptions. Its operations within eastern central territory are between points in Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Ohio, and West Virginia, on the one hand, and, on the other, points in Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island. For the year 1971 Eastern's gross revenue was $61,615,008. Of this, 88.4 percent was derived from traffic moving within eastern central territory. Eastern ranks number five in gross revenue and number two in percentage of revenue among the carriers participating in Eastern Central tariffs. Since early 1969 it has been engaged in a major cost control program and it is convinced that substantial cost reductions in the future are not possible. During 1970, Eastern experienced a severe economic set back because of a costly labor strike by the Teamster's Union. Its operating ratio for the year 1970 was 92.7. For the year 1971, its operating ratio was 93.7 and for the first quarter of 1972 it rose to 94.2. It points out that the past increases were filed just to meet increased costs in labor and that no consideration was given to costs other than labor. Since July 1, 1971, Eastern has experienced nonlabor increases of approximately $747,000 annually which it will have to absorb. Eastern stresses a need for additional revenue on minimum charge shipments and on shipments weighing less than 500 pounds. In the first quarter of 1972 it handled a total of 210,025 shipments which produced a gross revenue of $12,981,589 in eastern central territory. Of this amount, 130,634 shipments were less than 500 pounds and they constituted 62.2 percent of all shipments handled, yet they produced revenue of only $1,860,641. Eastern indicates that shipments in this category are the most costly to handle. Of 31 terminals owned and operated by Eastern throughout its system, about onehalf of them handle LTL shipments involved in this short-haul adjustment. During the first quarter of 1972, for example, it handled 41,976 LTL shipments at rate basis number 480 or lower and this represented 21.1 percent of all the LTL shipments it handled within eastern central territory. The freight charges on these shipments amounted to $1,276,715 which constitutes 16.7 percent of its Eastern Central revenue. Eastern indicates that the labor increases effective July 1, 1972, are greater percentagewise on short-haul traffic than on longer haul traffic, and that it is necessary to obtain the instant short-haul adjustment if this segment of traffic is to contribute its share of revenue in comparison with the cost of handling it. Cook Motor Lines, Inc., is a motor common carrier of general commodities, with the usual exceptions, operating generally between points in northeastern Ohio, on the one hand, and, on the other, points in West Virginia on and north of U.S. Highway 60, except Brooke and Hancock Counties. Its total operating revenue was $4,711,106 in 1971 of which approximately 39 percent or $1,837,332 was derived from operations within the scope of Eastern Central tariffs. About half of that or 19 percent from a revenue standpoint falls within the so-called short-haul adjustment herein. Cook has been constantly striving to reduce its costs in the face of increased service demands. It considers itself to be a short-haul carrier and in 1971 its average length of haul was 201 miles. It operates nine terminals, two of which are in Ohio and seven are in West Virginia. Its load factor is about 11 tons between terminals. This is about the highest load factor it had been able to achieve in this area. Approximately 30 peddle runs are dispatched daily to points as far away as 125 miles from its terminals in West Virginia. Additionally, there is very little freight available for pickup on these runs and thus the equipment normally returns to its terminals 95 percent empty. Cook indicates that across-the-board percentage increases do not deal with the problems in connection with short-haul movements, the most important of which is the fact that terminal costs do not vary to any appreciable degree with the length of the haul. It states that for it to be able to give good service in the area it serves, it must have sufficient money to properly pay its employees, maintain its equipment and terminals, and have sufficient funds to modernize its facilities so as to be able to meet the expanding need for its services in the future. Branch Motor Express Company was granted temporary authority to control Middle APPENDIX F Comparison of the class 100 rates, in cents per 100 pounds, maintained by Eastern |